<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
TELE-COMMUNICATIONS, INC.
(Name of Issuer)
(1) Tele-Communications, Inc. Series A TCI Group Common Stock, par value $1.00
per share.
(2) Tele-Communications, Inc. Series A Liberty Media Group Common Stock, par
value $1.00 per share.
(3) Tele-Communications, Inc. Series B TCI Group Common Stock, par value $1.00
per share.
(4) Tele-Communications, Inc. Series B Liberty Media Group Common Stock, par
value $1.00 per share.
(5) Tele-Communications, Inc. Series A TCI Ventures Group Common Stock, par
value $1.00 per share.
(6) Tele-Communications, Inc. Series B TCI Ventures Group Common Stock, par
value $1.00, per share.
(7) Class B 6% Cumulative Redeemable Exchangeable Junior Preferred Stock, par
value $.01 per share.
- ------------------------------------------------------------------------------
(Title of Classes of Securities)
<TABLE>
<CAPTION>
<C> <S> <C>
(1) Series A TCI Group Common Stock: 87924V101
(2) Series A Liberty Group Common Stock: 87924V507
(3) Series B TCI Group Common Stock: 87924V200
(4) Series B Liberty Group Common Stock: 87924V606
(5) Series A Ventures Group Common Stock 87924V887
(6) Series B Ventures Group Common Stock 87924V879
(7) Class B Preferred Stock: 87924V309
- ------------------------------------------------------------------------------
</TABLE> (CUSIP Numbers)
Dr. John C. Malone
c/o Tele-Communications, Inc.
Terrace Tower II, 5619 DTC Parkway, Englewood, CO 80111, (303-267-5500)
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
SEPTEMBER 30, 1997
------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check the following box: [ ].**
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
_______________
** See discussion in Item 1 relating to prior Schedule 13G filing.
Exhibit Index is on Page 9
<PAGE>
Cusip No. - Series A TCI Group Common Stock 87924V101
Cusip No. - Series A Liberty Group Common Stock 87924V507
Cusip No. - Series B TCI Group Common Stock 87924V200
Cusip No. - Series B Liberty Group Common Stock 87924V606
Cusip No. - Series A Ventures Group Common Stock 87924V887
Cusip No. - Series B Ventures Group Common Stock 87924V879
Cusip No. - Class B Preferred Stock 87924V309
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
Dr. John C. Malone
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
OO
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
U.S.
- --------------------------------------------------------------------------------
(7) Sole Voting Power 1,512,348 Shares of Series A TCI
Group/1/
53,796,799 Shares of Series B TCI
Group/2/,/4/
1,504,803 Shares of Series A Liberty
Group/3/
8,627,395 Shares of Series B Liberty
Group/2/,/5/
649,939 Shares of Series A Ventures
Group/6/
11,877,927 Shares of Series B Ventures
Group/2/,/7/
Number of 289,800 Shares of Class B Preferred/2/
Shares
Bene- -----------------------------------------------------------------
ficially (8) Shared Voting Power 0 Shares
Owned by
Each -----------------------------------------------------------------
Reporting (9) Sole Dispositive
Person Power 1,512,348 Shares of Series A TCI
With Group/1/
52,112,024 Shares of Series B TCI
Group/2/,/4/
1,504,803 Shares of Series A Liberty
Group/3/
8,627,395 Shares of Series B Liberty
Group/2/,/5/
649,939 Shares of Series A Ventures
Group/6/
11,017,247 Shares of Series B Ventures
Group/2/,/7/
289,800 Shares of Class B Preferred/2/
----------------------------------------------------------------------
(10) Shared Dispositive Power 0 Shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,512,348 Shares of Series A TCI Group/1/
53,796,799 Shares of Series B TCI Group/2/,/4/
1,504,803 Shares of Series A Liberty Group/3/
8,627,395 Shares of Series B Liberty Group/2/,/5/
649,939 Shares of Series A Ventures Group/6/
11,877,927 Shares of Series B Ventures Group/2/,/7/
289,800 Shares of Class B Preferred/2/
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
2
<PAGE>
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)/8/
Series A TCI Group Less than 1%
Series B TCI Group 80.7%
Series A Liberty Group Less than 1%
Series B Liberty Group 40.7%
Series A Ventures Group Less than 1%
Series B Ventures Group 73.0%
Class B Preferred 17.8%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person
IN
_____________________________
/1/ Including the 112,348 shares of Series A TCI Group Stock beneficially owned
by Dr. Malone, together with the additional 1,400,000 shares Dr. Malone would
acquire upon the exercise of stock options granted in tandem with stock
appreciation rights of which options for 840,000 shares are currently
exerciseable, but does not include shares of Series A TCI Group Stock issuable
upon conversion of shares of Series B TCI Group Stock owned by Dr. Malone or his
spouse. (See Items 3 and 5)
/2/ Includes, as applicable, 776,380 shares of Series B TCI Group Stock, 293,250
shares of Series B Liberty Group Stock, 396,620 shares of Series B Ventures
Group Stock, and 6,900 shares of Class B Preferred Stock beneficially owned by
Dr. Malone's spouse, to which Dr. Malone disclaims any beneficial ownership
thereof. (See Item 5)
/3/ Including the 754,803 shares of Series A Liberty Group Stock beneficially
owned by Dr. Malone, together with the additional 750,000 shares Dr. Malone
would acquire upon the exercise of stock options granted in tandem with stock
appreciation rights of which options for 450,000 shares are currently
exerciseable. These shares do not include shares of Series A Liberty Group
Stock issuable upon conversion of shares of Series B Liberty Group Stock owned
by Dr. Malone or his spouse. (See Items 3 and 5 of the Statement)
/4/ Includes 30,545,864 shares of Series B TCI Group Stock that Dr. Malone has
the right to acquire at any time prior to June 30, 1999, and 11,500,000 shares
and 2,795,000 shares, respectively, of Series B TCI Group Stock pledged as
security for two loans. Also includes 1,684,775 shares of Series B TCI Group
Stock on which Dr. Malone has been granted the voting rights; however, Dr.
Malone has no right to dispose of such shares (which are excluded in (9) above).
(See Item 6)
/5/ Includes 3,084,358 shares and 500,000 shares, respectively, of Series B
Liberty Group Stock pledged as security for two loans. (See Item 6)
/6/ Including the 49,939 shares of Series A Ventures Group Stock beneficially
owned by Dr. Malone, together with the additional 600,000 shares Dr. Malone
would acquire upon the exercise of stock options granted in tandem with stock
appreciation rights of which options for 360,000 shares are currently
exerciseable, but does not include shares of Series A Ventures Group Stock
issuable upon conversion of shares of Series B Ventures Group Stock owned by Dr.
Malone or his spouse. (See Items 3 and 5)
/7/ Includes 860,680 shares of Series B Ventures Group Stock on which Dr. Malone
has been granted voting rights; however, Dr. Malone has no right to dispose of
such shares (which are excluded in (9) above). (See Item 6)
/8/ Each share of Series B TCI Group Stock, Series B Liberty Group Stock and
Series B Ventures Group Stock is entitled to 10 votes per share and each share
of Series A TCI Group Stock, Series A Liberty Group Stock and Series A Ventures
Group Stock is entitled to one vote per share. In addition, holders of Class B
Preferred Stock vote with the holders of the Series A TCI Group Stock, Series B
TCI Group Stock, Series A Liberty Group Stock, Series B Liberty Group Stock,
Series A Ventures Group Stock, Series B Ventures Group Stock, and certain
classes/series of Issuer preferred stock on the election of directors.
Accordingly, when these series and class of stock are aggregated, the Reporting
Person may be deemed to beneficially own voting equity securities of the Issuer
representing approximately 38.2% of the voting power of the Issuer.
3
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Amendment No. 5)
Statement of
DR. JOHN C. MALONE
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
TELE-COMMUNICATIONS, INC.
(Commission File No. 0-20421)
ITEM 1. Security and the Issuer
-----------------------
Dr. John C. Malone hereby amends and supplements his Statement on
Schedule 13D, as amended to the date hereof (the "Statement"), with respect to
the following shares of stock of Tele-Communications, Inc., a Delaware
corporation (the "Issuer"), beneficially owned by Dr. John C. Malone:
(1) Tele-Communications, Inc. Series A TCI Group Common Stock, par value
$1.00 per share (the "Series A TCI Group Stock");
(2) Tele-Communications, Inc. Series A Liberty Media Group Common Stock,
par value $1.00 per share (the "Series A Liberty Group Stock");
(3) Tele-Communications, Inc. Series A TCI Ventures Group Common Stock,
par value $1.00 per share (the "Series A Ventures Group Stock");
(4) Tele-Communications, Inc. Series B TCI Group Common Stock, par value
$1.00 per share (the "Series B TCI Group Stock");
(5) Tele-Communications, Inc. Series B Liberty Media Group Common Stock,
par value $1.00 per share (the "Series B Liberty Group Stock");
(6) Tele-Communications, Inc. Series B TCI Ventures Group Common Stock,
par value $1.00 per share (the "Series B Ventures Group Stock"); and
(7) Class B 6% Cumulative Redeemable Exchangeable Junior Preferred
Stock, par value $.01 per share (the "Class B Preferred Stock").
The Issuer's executive offices are located at 5619 DTC Parkway, Englewood,
Colorado 80111. Unless otherwise indicated, capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Statement.
4
<PAGE>
ITEM 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
Item 3 of the Statement is hereby amended and supplemented by adding
the following:
Exchange of Shares
- ------------------
Pursuant to the Issuer's offer to exchange shares of Series A Ventures
Group Stock for up to an aggregate of 188,661,300 shares of Series A TCI Group
Stock and shares of Series B Ventures Group Stock for up to an aggregate of
16,266,400 shares of Series B TCI Group Stock (collectively, the "Exchange
Offers"), Dr. Malone tendered for exchange 10,993,643 shares of his Series B TCI
Group Stock and his spouse tendered 410,550 shares of her Series B TCI Group
Stock to the Issuer's exchange agent. After the close of the Exchange Offers on
September 10, 1997, the Issuer announced on September 16, 1997, that the number
of shares of Series B TCI Group Stock tendered for Series B Ventures Group Stock
was 16,837,706, resulting in a proration factor of 96.60698%. Based on such
proration factor, the exchange agent, on behalf of the Issuer, issued on or
about September 30, 1997, 10,620,627 shares and 396,620 shares of Series B
Ventures Group Stock to Dr. Malone and his spouse, respectively. The remaining
373,016 and 13,930 shares of Series B TCI Group Stock tendered have been
returned to Dr. Malone and his spouse, respectively. Dr. Malone disclaims any
beneficial ownership of the shares of Series B Ventures Group Stock and the
Series B TCI Group Stock owned by his spouse. In connection with the Exchange
Offers, TCI replaced Dr. Malone's options for 2,000,000 shares of Series A TCI
Group Stock with options to purchase an aggregate of 1,400,000 shares of Series
A TCI Group Stock and options to purchase an aggregate of 600,000 shares of
Series A Ventures Group Stock.
Waiver of First Refusal Rights
- ------------------------------
Pursuant to the terms of a Letter Agreement dated September 10, 1997
(the "Waiver Agreement"), by and among the Issuer, Dr. Malone and Leo J.
Hindery, Jr., as trustee (the "Trustee") of IP Series B Trust I and of IP Series
B Trust II (collectively, the "Trusts"), Dr. Malone waived his rights of first
refusal with respect to the Series B TCI Group Stock owned by the Trusts (the
"Rights"). The Trustee requested such waiver in connection with the Trustee's
desire to have the Trusts participate in the Exchange Offers. Dr. Malone limited
such waiver to the Trusts participation in the Exchange Offers and granted the
waiver with the understanding that all shares issued to the Trusts pursuant to
the Exchange Offers would be also subject to the terms of a Stockholders'
Agreement with each of the Trusts. Dr. Malone acquired the Rights pursuant to
the terms of such Stockholders' Agreements. See Item 6 below. The foregoing
description of the waiver of the Rights is qualified in its entirety by
reference to the Waiver Agreement attached to this Amendment No. 5 to the
Statement as Exhibit 7(H) and incorporated herein by this reference.
ITEM 4. Purpose of Transaction
----------------------
Item 4 of the Statement is hereby amended and supplemented by adding
the following:
Dr. Malone participated in the Exchange Offers, all as described in
Item 3 above, based on his desire to own substantially the same percentage
equity and voting interests in the TCI Ventures Group as he would own in the TCI
Group after giving effect to the Exchange Offers.
ITEM 5. Interest in Securities of the Issuer
------------------------------------
Item 5(a) of the Statement is hereby amended and supplemented by adding
the following information thereto:
Dr. Malone beneficially owns (without giving effect to the conversion
of Series B TCI Group Stock for Series A TCI Group Stock, of Series B Liberty
Group Stock for Series A Liberty Group Stock, or of Series B Ventures Group
Stock for Series A Ventures Group Stock): (a) 1,512,348 shares of Series A TCI
Group Stock, which includes interests in shares held by the trustee of the
Issuer's Employee
5
<PAGE>
Stock Purchase Plan, and options for 1,400,000 shares of which options for
840,000 shares are currently exerciseable and represents less than 1% of the
outstanding shares of Series A TCI Group Stock; (b) 53,796,799 shares of Series
B TCI Group Stock, which includes Dr. Malone's right to acquire from the Issuer
30,545,864 shares and his right to direct the voting of 1,684,775 shares owned
by the Trusts (see Item 6 below) and represents 80.7% of the outstanding shares
of Series B TCI Group Stock; (c) 1,504,803 shares of Series A Liberty Group
Stock, which includes interests in shares held by the trustee of the Issuer's
Employee Stock Purchase Plan, and options for 750,000 shares of which options
for 450,000 shares are currently exerciseable and represents less than 1% of the
outstanding shares of Series A Liberty Group Stock; (d) 8,627,395 shares of
Series B Liberty Group Stock, which represents 40.7% of the outstanding shares
of Series B Liberty Group Stock; (e) 649,939 shares of Series A Ventures Group
Stock, which includes interests in shares held by the trustee of the Issuer's
Employee Stock Purchase Plan and options for 600,000 shares of which options for
360,000 shares are currently exerciseable and represents less than 1% of the
outstanding shares of Series A Ventures Group Stock; and (f) 11,877,927 shares
of Series B Ventures Group Stock, which includes his right to direct the voting
of 860,680 shares owned by the Trusts (see Item 6 below) and represents 73.0% of
the outstanding shares of Series B Ventures Group Stock. In addition, Dr. Malone
beneficially owns 289,800 shares of Class B Preferred Stock, which represents
17.8% of the outstanding shares of Class B Preferred Stock. The foregoing
percentage interests are based on the outstanding share numbers provided by the
Issuer as of July 31, 1997 (adjusted for the transactions disclosed in Item 3
above and Dr. Malone's options as if exercised in full), as follows: 473,650,687
shares of Series A TCI Group Stock; 69,090,544 shares of Series B TCI Group
Stock (assumes Dr. Malone exercised his right to acquire 30,545,864 shares
thereof); 223,833,080 shares of Series A Liberty Group Stock; 21,175,465 shares
of Series B Liberty Group Stock; 189,261,300 shares of Series A Ventures Group
Stock; 16,266,400 shares of Series B Ventures Group Stock; and 1,620,026 shares
of Class B Preferred Stock. When these series and class of stock are aggregated,
Dr. Malone may be deemed to beneficially own voting equity securities of the
Issuer representing approximately 38.2% of the voting power of the Issuer.
Item 5(b) of the Statement is hereby amended and supplemented by adding
the following information thereto:
Dr. Malone and to his knowledge, his spouse each have the sole power to
vote, or to direct the voting of, their respective shares of each Series of the
Issuer's Common Stock and the Class B Preferred Stock and the sole power to
dispose of, or to direct the disposition of, all such shares, except with
respect to (a) the pledge of 14,295,000 shares of Series B TCI Group Stock and
3,584,358 shares of Series B Liberty Group Stock, and (b) 112,202 shares of
Series A TCI Group Stock, 60,964 shares of Series A Liberty Group Stock, and
49,939 shares of Series A Ventures Group Stock held by the trustee of the
Issuer's Employee Stock Purchase Plan, which shares are voted at the discretion
of such trustee. The number of shares of Series A TCI Group Stock and the number
of shares of Series A Ventures Group Stock held by said trustee for the benefit
of Dr. Malone are estimates based on information the trustee provided Dr. Malone
following the completion of the Exchange Offers. In addition to the foregoing,
Dr. Malone has the power to direct the voting of 1,684,775 shares of Series B
TCI Group Stock and 860,680 shares of Series B Ventures Group Stock owned by the
Trusts as described in Item 6 below. Dr. Malone does not have the power to
dispose of such shares owned by the Trusts.
Item 5(c) is hereby amended and supplemented by adding the following
information thereto:
See Item 3 above on Dr. Malone's participation in the Exchange Offers.
6
<PAGE>
ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect
---------------------------------------------------------------------
to Securities of the Issuer
---------------------------
Item 6 of the Statement is hereby amended and supplemented by adding
the following information thereto:
The Issuer, Dr. Malone and the Trusts are parties to a certain
Stockholders' Agreement dated June 10, 1997, and a certain Stockholders'
Agreement dated August 5, 1997. Such Stockholders' Agreements, as modified by
the Waiver Agreement, grant, among other things, to Dr. Malone (i) the Rights,
and (ii) all voting and consent rights with respect to the shares of Series B
TCI Group Stock and shares of Series B Ventures Group Stock owned by the Trusts.
As a result of the Trusts participation in the Exchange Offers, Dr. Malone
directs the voting of 1,684,775 shares of Series B TCI Group Stock and 860,680
shares of Series B Ventures Group Stock owned by the Trusts. This description is
qualified in its entirety by reference to each of the Stockholders' Agreements
attached to this Amendment No. 5 to the Statement as Exhibits 7(I) and 7(J),
respectively, and incorporated herein by this reference.
ITEM 7. Material to be Filed as Exhibits
--------------------------------
(H) Letter Agreement, dated September 10, 1997, among the Issuer, Dr.
Malone and the Trusts.
(I) Stockholders' Agreement dated as of June 10, 1997, by and among
the Issuer, Dr. Malone, the IP Series B Trust I, Leo J. Hindery,
Jr., individually and as trustee of said Trust, and the persons
who are beneficiaries of said Trust.
(J) Stockholders' Agreement dated as of August 5, 1997, by and among
the Issuer, Dr. Malone, the IP Series B Trust II, Leo J. Hindery,
Jr., individually and as trustee of said Trust, and the persons
who are beneficiaries of said Trust.
7
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 5 to the Statement
is true, complete and correct.
September 30, 1997 /s/ Dr. John C. Malone
----------------------
Dr. John C. Malone
8
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT PAGE
- ------- ------- ----
NUMBER
- ------
<S> <C> <C>
7(H) Letter Agreement, dated September 10, 1997, among the Issuer, Dr. 10
Malone and the Trusts.
7(I) Stockholders' Agreement dated as of June 10, 1997, by and among 12
the Issuer, Dr. Malone, the IP Series B Trust I, Leo J. Hindery,
Jr., individually and as trustee of said Trust, and the persons
who are beneficiaries of said Trust.
7(J) Stockholders' Agreement dated as of August 5, 1997, by and among 23
the Issuer, Dr. Malone, the IP Series B Trust II, Leo J. Hindery,
Jr., individually and as trustee of said Trust, and the persons
who are beneficiaries of said Trust.
</TABLE>
9
<PAGE>
[LETTERHEAD OF TCI APPEARS HERE]
EXHIBIT 7(H)
September 10, 1987
Mr. Leo J. Hindery, Jr., Trustee
IP Series B Trust I
IP Series B Trust II
c/o InterMedia Partners
235 Montgomery Street, Suite 420
San Francisco, CA 94104
Dear Leo:
Reference is made to that certain Stockholders' Agreement dated as of June
10, 1997, by and among Tele-Communications, Inc. ("TCI"), John C. Malone
("Malone"), the IP Series B Trust I (the "Trust I"), Leo J. Hindery, Jr., both
individually and as trustee of the Trust I ("Hindery") and the persons who are
beneficiaries of the Trust I (the "Stockholders' Agreement I"), and that certain
Stockholders' Agreement dated as of August 5, 1997, by and among TCI, Malone,
the IP Series B Trust II (the "Trust II" and together with the Trust I, the
"Trusts"), Hindery, both individually and as trustee of the Trust II, and the
persons who are beneficiaries of the Trust II (the "Stockholders' Agreement II"
and together with the Stockholders' Agreement I, the "Stockholders'
Agreements"). Capitalized terms used in this letter agreement and not defined
herein shall have the meanings assigned to them in the Stockholders' Agreements.
Malone and TCI have been notified by Hindery of his desire, as trustee of
the Trusts, to participate in the exchange offer pursuant to which TCI is
offering to issue one share of Series B TCI Ventures Group Common Stock in
exchange for each share of Series B TCI Group Common stock ("TCOMB") tendered to
TCI on or prior to the expiration date of the exchange offer, September 10,
1997, with respect to approximately 35% of the 2,545,455 shares of TCOMB owned
by the Trusts (the "TCI Shares"), subject to adjustment if the exchange offer is
oversubscribed. The tendering of the TCI Shares to TCI to participate in the
exchange offer constitutes a Transfer under the terms of the Stockholders'
Agreements subject to the restrictions on Transfer contained in Article III of
the Stockholders' Agreements. Malone and TCI hereby waive their rights of first
refusal under Article III of the Stockholders' Agreements with respect to the
Transfer of the TCI Shares to TCI pursuant to the exchange offer with the
express understanding that the shares of Series B TCI Ventures Group Common
Stock to be issued in exchange for the shares of TCOMB tendered by the trusts
pursuant to the exchange offer and the shares of TCOMB retained by the Trusts
after the completion of the exchange offer all will
10
<PAGE>
Leo J. Hindery, Jr., Trustee
September 10, 1997
Page 2
be subject to all of the terms of the Stockholders' Agreements as provided in
the Stockholders' Agreements.
Sincerely,
TELE-COMMUNICATIONS, INC.
By:
-------------------------------
Stephen M. Brett
Executive Vice President
and General Counsel
-----------------------------------
John C. Malone, individually
11
<PAGE>
EXHIBIT 7(I)
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (this "Agreement") is made as of June 10,
1997, by and among Tele-Communications, Inc., a Delaware corporation, John C.
Malone ("Malone"), the IP Series B Trust I (the "Trust"), Leo J. Hindery, Jr.,
both individually and as trustee of the Trust ("Hindery"), and the persons who
are the beneficiaries of the Trust as of the date of this Agreement.
In consideration of the mutual promises and covenants contained in this
Agreement, and intending to be legally bound, the parties agree as follows:
ARTICLE I: DEFINITIONS
1.1 DEFINITIONS. The following terms, when used in this Agreement, will have
-----------
the meanings set forth below.
Affiliate: of a Person is any other Person that Controls, is
Controlled by or is under common Control with such
Person.
Affiliate Offer: a bona fide written offer from an Affiliate of any
member of the Shareholder Group to purchase or
otherwise acquire all or part of the TCI Shares owned
by one or more members of the Shareholder Group.
Business Day: any day that is not a Saturday, a Sunday or a day on
which banking institutions in Denver, Colorado or San
Francisco, California are required or authorized to be
closed.
Control: the power to elect a majority of the directors (or
similar officials) of a Person or to direct or cause
the direction of the management and policies of a
Person, whether by the ownership of voting interests,
by contract or otherwise.
Election Notice: either a Malone Election Notice or a TCI Election
Notice, as the context requires.
Fair Market Value: the cash price at which a willing seller would sell and
a willing buyer would buy specified property, both
having full knowledge of the relevant facts and being
under no
12
<PAGE>
compulsion to buy or sell, in an arm's-length
transaction without unusual time constraints.
HSR Act: the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
Material Consent: the consent, waiver or authorization of, or filing
with, any Person the lack of which reasonably could be
expected to result in (a) material liability to the
Offeror or the Purchaser if a purchase of TCI Shares by
Malone or TCI pursuant to Article III is consummated or
(b) either the Offeror or the Purchaser being deprived
of all or a material part of the benefits incident to
the purchase and sale of TCI Shares pursuant to Article
III.
Purchase Agreement: the Partnership Interest Purchase Agreement dated as of
June 10, 1997 between TCI ICM III, Inc. and the Trust.
Series A Shares: shares of Tele-Communications, Inc. Series A TCI Group
Common Stock.
Shareholder Group: Hindery, the Trust, any Person that is a trustee or
beneficiary of the Trust from time to time and each
Transferee.
TCI: Tele-Communications, Inc., a Delaware corporation.
TCI Change in Control: the acquisition by any Person, or by a group of
Persons that are under common Control (other than one
or a combination of the Persons that constitute the TCI
Control Group), within any period of 12 consecutive
months, of beneficial ownership (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934,
as amended) of Voting Stock of TCI representing in the
aggregate more than 50% of the total voting power of
all Voting Stock of TCI, calculated on a fully diluted
basis immediately prior to the date of such acquisition
(or, if such Voting Stock is acquired in more than one
transaction during such 12-month period, the date of
the last of such transactions).
TCI Control Group: John C. Malone, the estate, beneficiaries of the estate
and the legal heirs of John C. Malone after the death
of John C. Malone, the estate, beneficiaries of the
estate and the legal heirs of Bob Magness, the
directors of TCI as of the date of this Agreement, any
trust or other investment vehicle for the primary
benefit of any of the foregoing persons or their heirs,
Kearns-Tribune Corporation or any successor thereto by
merger or
13
<PAGE>
consolidation, and the trustee under any employee stock
purchase plan or other employee benefit plan of TCI, it
being agreed that such trustee will be deemed to have
beneficial ownership of all the Voting Stock of TCI
held under the plan, whether or not allocated to or
vested in participants' accounts.
TCI Shares: the shares of Tele-Communications, Inc. Series B TCI
Group Common Stock acquired by the Trust pursuant to
the Purchase Agreement and the 4,986 shares of Tele-
Communications, Inc. Series B TCI Group Common Stock
acquired by Peter Kern and contributed to the Trust by
him on the date of this Agreement, and any other
securities issued in exchange for any of the foregoing
(except Series A Shares exchanged for TCI Shares as
provided in Article III), that are held by or for the
benefit of any member of the Shareholder Group from
time to time.
Third Party Offer: a bona fide written offer from a prospective purchaser
that is not an Affiliate of any member of the
Shareholder Group to purchase all or a portion of the
TCI Shares.
Trading Price: the average of the daily market prices of one TCI Share
for 30 consecutive Business Days commencing 25 Business
Days before the date on which TCI gives a TCI Election
Notice or Malone gives a Malone Election Notice, as
appropriate. The daily market price of a TCI Share on
any Business Day will be (a) the last sale price on
such day on the principal stock exchange on which TCI
Shares are then listed or admitted to trading or (b) if
no sale takes place on such date on that exchange, the
average of the reported closing bid and asked prices on
such day as officially noted on that exchange. The
Trading Price will be appropriately adjusted to reflect
the effects of any stock dividend, stock split,
reclassification or combination affecting TCI Shares as
a class, the record date or ex-dividend date of which
occurs during the period in which the Trading Price is
to be determined or thereafter prior to the closing of
the purchase of TCI Shares for which the calculation of
the Trading Price is required to be made.
Transfer: with respect to any property, a sale, exchange,
transfer, assignment, pledge, grant of a security
interest in or other disposition of all or any
interest, of record or beneficially, in such property
(whether voluntary, involuntary or by operation of
law).
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Transferee: a Person to whom a Transfer of TCI Shares is made in
compliance with this Agreement.
Voting Stock: the issued and outstanding capital stock of a
corporation having general voting power under ordinary
circumstances to elect directors of the corporation,
but not including any capital stock that has or would
have such voting power solely by reason of the
happening of any contingency.
ARTICLE II: VOTING ARRANGEMENTS
Hindery and each other member of the Shareholder Group agree that Hindery,
as the trustee of the Trust, will have the exclusive right to exercise all of
the voting and consent rights associated with the TCI Shares on all matters as
to which such voting or consent rights are required or permitted to be
exercised, and that Hindery will exercise such rights as Malone directs.
Hindery and, if required or deemed desirable by Malone, each other member of the
Shareholder Group, will execute and deliver to Malone such proxies and other
instruments and documents as Malone may request from time to time to give effect
to or to evidence the rights granted in this Article II.
ARTICLE III: TRANSFER RESTRICTIONS
3.1 TCI SHARE TRANSFERS. No member of the Shareholder Group will Transfer any
-------------------
of the TCI Shares, or any interest therein, held by it or of which it is a
beneficial owner except to the extent specifically permitted by this Article
III. Any Transfer of TCI Shares or an interest therein other than as
specifically permitted by this Article III will be void and of no effect. The
restrictions on, and obligations with respect to, Transfers of TCI Shares set
forth in this Agreement will be in addition to, and not in lieu of, any other
restrictions or obligations imposed by applicable law or set forth in any
instrument or agreement by which the TCI Shares or any member of the Shareholder
Group is bound.
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3.2 RIGHT OF FIRST REFUSAL.
----------------------
(a) A member of the Shareholder Group may Transfer all or any portion of
the TCI Shares held or beneficially owned by it to an Affiliate or to a Person
that is not an Affiliate only after complying with the provisions of this
Section 3.2. No member of the Shareholder Group may Transfer any record or
beneficial interest in any TCI Share separately from all of the legal and
beneficial interests in such TCI Share, except to the extent necessary for the
TCI Shares to be held of record by the Trust or for TCI Shares to be distributed
to beneficiaries of the Trust to the extent permitted by Section 3.4. If the
Trust or any other member of the Shareholder Group wishes to sell on the NASDAQ
National Market System or on any national securities exchange (an "Open Market
Sale"), or receives and wishes to accept a Third Party Offer or an Affiliate
Offer for, all or any portion of the TCI Shares held or beneficially owned by it
(the "Offered Shares"), that Person (the "Offeror") must first offer to Malone
and TCI the opportunity to purchase the Offered Shares. The offer will be made
by notice (an "Offer Notice") given by the Offeror to Malone and TCI
accompanied, in the case of a Third Party Offer, by a copy of the Third Party
Offer that specifically identifies the Person making the Third Party Offer and,
to the extent known to the Offeror, each Person that directly or indirectly
Controls such Person, or, in the case of an Affiliate Offer, by a notice that
specifically identifies the Affiliate making the Affiliate Offer and each Person
that directly or indirectly Controls such Affiliate, and in any case stating the
Offeror's bona fide intention to Transfer the Offered Shares in an Open Market
Sale or pursuant to the Third Party Offer or Affiliate Offer. The Offeror will
provide such additional information as may reasonably be requested by Malone or
TCI to evaluate the terms of the prospective Transfer. Malone may elect to
purchase all or a portion of the Offered Shares by giving notice of such
election to the Shareholder Group and TCI (the "Malone Election Notice") within
20 days after his receipt of the Offer Notice (the "Malone Election Period").
If Malone does not give an Election Notice for all of the Offered Shares within
the Malone Election Period, TCI will have a period of 10 days after the end of
the Malone Election Period (the "TCI Election Period") within which it may
elect, by notice to Malone and the Offeror (a "TCI Election Notice"), to
purchase the Offered Shares that Malone has not elected to purchase.
(b) The consideration payable by Malone or TCI, as applicable (the
"Purchaser"), for each Offered Share that the Purchaser has elected to purchase,
at the Purchaser's election will be either (i) one Series A Share (or that
number of Series A Shares, or shares of any successor class or series of stock
issued in replacement of Series A Shares, into which one share of Tele-
Communications, Inc. Series B TCI Group Common Stock is convertible at the time
of determination) or (ii) if the Offered Shares are the subject of a Third Party
Offer, cash in an amount equal to the consideration payable for one TCI Share
pursuant to the Third Party Offer, and if the Offered Shares are to be sold in
an Open Market Sale or are the subject of an Affiliate Offer, cash in an amount
equal to the Trading Price. The Purchaser will indicate in its Election Notice
whether it elects to pay the purchase price in cash or Series A Shares. To the
extent the consideration proposed to be paid for TCI Shares in a Third Party
Offer consists of property other than cash, if the Purchaser elects to purchase
Offered Shares for cash it will pay an amount equal to the Fair Market Value of
such property. To the extent TCI is the Purchaser and elects to use Series A
Shares as consideration for Offered Shares, the Offeror will convert such
Offered Shares into Series A Shares.
(c) For purposes of this Article III, the Fair Market Value of the non-
cash consideration proposed to be paid for TCI Shares in a Third Party Offer
will be determined by
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agreement of the Offeror and the Purchaser. If they cannot agree on such Fair
Market Value within 10 Business Days after an Election Notice is given, such
Fair Market Value will be determined by an appraiser acceptable to the Offeror
and the Purchaser. If they are unable to agree on a single appraiser within 10
Business Days after an Election Notice is given (the "Selection Period"), the
Offeror and the Purchaser each will select an appraiser by giving notice to each
other of such appraiser's identity within 10 Business Days after the end of the
Selection Period. The Offeror and the Purchaser each will cause the appraiser
they have selected to determine the Fair Market Value of the non -cash
consideration in question and to submit a written report of its determination
within 30 Business Days after the appraiser is selected. If the higher of the
two appraisals is equal to or less than 120% of the lower appraisal, the average
of the two will be the Fair Market Value of the non-cash consideration. If the
higher of the two appraisals is more than 120% of the lower appraisal, the two
appraisers will appoint a third appraiser within 10 Business Days and cause the
third appraiser to submit a written report of its determination of the Fair
Market Value of the non-cash consideration within 30 Business Days after such
appraiser's selection. Such third appraiser will not be informed of the
determinations of the other two appraisers. If three appraisals are necessary,
then the average of the two appraisals in which the Fair Market Values are
closest together will be deemed the Fair Market Value of the non-cash
consideration or, if the highest and lowest appraisal differ from the middle
appraisal by equal amounts, then the middle appraisal will be deemed the Fair
Market Value. Any appraiser appointed pursuant to this Section 3.2(c) will be a
nationally-recognized investment banking firm. The Offeror and the Purchaser
will pay the fees and costs of the appraisers appointed by them. The Offeror and
the Purchaser will share equally the fees and costs of any third appraiser
appointed pursuant to this Section 3.2 (c).
(d) Unless the Offeror and the Purchaser otherwise agree, the closing of
any purchase of TCI Shares pursuant to this Section 3.2 will be held at the
principal corporate offices of TCI at 10:00 a.m. local time on the later of (i)
the day that is 20 days after the Election Notice is given and (ii) two Business
Days after the parties have obtained all Material Consents. If a purchase of
TCI Shares pursuant to this Section 3.2 requires any filing under the HSR Act,
the requirement for obtaining that consent for purposes of this Section 3.2 will
be deemed satisfied if the applicable waiting period under the HSR Act has
expired or has been terminated without the receipt of a notice of objection or
the commencement or threat of litigation by a government entity to restrain the
consummation of the purchase of the TCI Shares to be purchased. The Offeror and
the Purchaser will cooperate to prevent any inconsistency between any HSR Act
filings they are required to make and will furnish to each other such
information and reasonable assistance as the other may reasonably request in
connection with such filings and any request by a governmental agency for
additional information. Each party to this Agreement covenants to and with the
other parties that it will use its reasonable best efforts to obtain any
Material Consent required to consummate any purchase of TCI Shares by Malone or
TCI pursuant to this Article III as promptly as practicable.
(e) At the closing of any purchase and sale of the Offered Shares by the
Purchaser, (i) the Purchaser will pay the purchase price in the form in which
the Purchaser has elected to make such payment pursuant to Section 3.2(b) and
(ii) the Offeror will transfer to the Purchaser all of the record and beneficial
interests in the Offered Shares to be purchased, free and clear of all liens,
claims and encumbrances, and will deliver such bills of sale, assignments and
other agreements and instruments to the Purchaser, and will take all such other
reasonable actions at and after the closing as the Purchaser may request, to
effectively vest the Offered Shares to be purchased in the Purchaser.
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(f) If any Material Consent cannot be obtained within 12 months after the
date the Election Notice is given, the Election Notice will be deemed rescinded
and the Offeror may Transfer the Offered Shares (i) in an Open Market Sale on
such terms as are generally available on such markets if a proposed Open Market
Sale by the Offeror gave rise to the right of first refusal pursuant to this
Section 3.2, or (ii) to the Person that made the Third Party Offer or Affiliate
Offer for the consideration and upon the terms and conditions set forth in the
Third Party Offer or Affiliate Offer (or, if the Person that made the Third
Party Offer or Affiliate Offer no longer wishes to purchase the Offered Shares,
in an Open Market Sale on such terms as are generally available on such markets)
if a Third Party Offer or Affiliate Offer gave rise to the right of first
refusal pursuant to this Section 3.2, in any case for a period of 60 days
beginning on the day after the first anniversary of the date the Election Notice
was given, provided that the Offered Shares so Transferred are first converted
--------
into Series A Shares. Upon such conversion the Series A Shares will not again
be subject to the right of first refusal provisions of this Section 3.2 prior to
the Transfer of such Series A Shares within the 60-day period as permitted by
this paragraph (f). If the Offered Shares are not so sold during such 60-day
period, the Offeror's right to Transfer such Offered Shares will again be
subject to the provisions of this Section 3.2.
(g) If Malone and TCI do not elect to purchase all of the Offered Shares,
the Offeror will be free for a period of 60 days after the end of the TCI
Election Period to sell the Offered Shares that Malone and TCI have not elected
to purchase in an Open Market Sale on such terms as are generally available on
such markets or to the Person that made the Third Party Offer or Affiliate Offer
for the consideration and upon the terms and conditions set forth in the Third
Party Offer or Affiliate Offer, as applicable. If those Offered Shares are not
so sold during such 60-day period, the Offeror's right to Transfer such Offered
Shares will again be subject to the provisions of this Section 3.2.
(h) If any Offeror entitled to Transfer Offered Shares during a 60-day
period pursuant to paragraph (f) or (g) is precluded from Transferring all of
the Offered Shares such Offeror otherwise would be entitled to Transfer solely
because of restrictions imposed by Rule 144 under the Securities Act of 1933, as
amended, on the volume of securities that may be sold within a three-month
period, such Offeror may Transfer the Offered Shares the Offeror is precluded by
Rule 144 from Transferring during an additional period of 90 days, beginning on
the day after the end of the 60-day Transfer period permitted by paragraphs (f)
and (g).
(i) Except for the conversion of Offered Shares into Series A Shares
pursuant to paragraph (f), any member of the Shareholder Group who wishes to
convert any TCI Shares of which such Person is the holder or the beneficial
owner into Series A Shares will first offer to Malone and TCI the opportunity to
purchase such TCI Shares, which will be treated as Offered Shares that are
subject to the provisions of Section 3.2(a). If Malone gives a Malone Election
Notice or TCI gives a TCI Election Notice with respect to all or any portion of
such Offered Shares, the consideration payable upon the purchase of such Offered
Shares will be the Trading Price, payable in the form elected by the Purchaser
as described in Section 3.2(b).
3.3 CHANGE IN CONTROL OFFER. If any Third Party Offer is made that, if
-----------------------
consummated, would result in a TCI Change in Control, and the transaction
represented by the Third Party Offer has been approved by TCI's Board of
Directors, the purchase price payable by Malone for Offered Shares, to the
extent Malone exercises his right of first refusal set forth in this Article
III, must be paid in cash and not in Series A Shares. The preceding sentence
will not preclude
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TCI, if it exercises its right of first refusal to purchase all or part of the
Offered Shares that Malone does not elect to purchase, from paying the purchase
price therefor in cash or Series A Shares, as it may elect.
3.4 DISTRIBUTIONS TO BENEFICIARIES. Notwithstanding any other provision of
------------------------------
this Agreement, the Trust may distribute to any Person that is a beneficiary of
the Trust from time to time the number of TCI Shares that are beneficially owned
by such Person, provided that such Person complies with the provisions of
Section 3.6.
3.5 OTHER PERMITTED TRANSFERS. Notwithstanding any other provision of this
-------------------------
Agreement, subject to the provisions of Section 3.6 any member of the
Shareholder Group may (a) pledge all or part of the TCI Shares of which it is
the legal or beneficial owner to Colorado National Bank or any other lending
institution as security for a loan, (b) Transfer all or part of the TCI Shares
owned by such Person to Peter Kern or Lisa Perreault or (c) Transfer all or part
of the TCI Shares owned by such Person to any spouse, parent, child, grandchild
or sibling of such Person or to any trust or other investment vehicle
established primarily for the benefit of any of the foregoing persons or their
heirs, provided that prior to a Transfer permitted by clause (a), (b) or (c) the
member of the Shareholder Group making the Transfer causes the Transferee to
provide to TCI a written certificate establishing to TCI's satisfaction that the
Transfer qualifies as a private placement of the TCI Shares to be Transferred
under applicable securities laws and as to the Transferee's investment intent
with respect to such TCI Shares.
3.6 OTHER CONDITIONS TO TRANSFER. Any Person (other than Malone and TCI) to
----------------------------
whom TCI Shares are permitted by this Article III to be Transferred must, prior
to such Transfer, agree in writing to be bound by the terms of this Agreement as
a member of the Shareholder Group if such Person is not already a party hereto.
No member of the Shareholder Group will make any Transfer of TCI Shares that
would violate U.S. federal or state securities laws.
ARTICLE IV: MISCELLANEOUS
4.1 STOCK CERTIFICATE LEGEND. All certificates representing TCI Shares will
------------------------
bear a legend in substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or any state securities
laws, and may not be sold, pledged or otherwise transferred or
encumbered unless they are so registered or unless an exemption from
registration is available, and except in accordance with the
Stockholders' Agreement dated as of June 10, 1997 among the Company
and certain of its stockholders, a copy of which agreement is
available for inspection at the offices of the Company."
If an Offeror Transfers all or part of the Offered Shares to a Transferee as
permitted by Section 3.2(f) or 3.2(g), TCI will issue to the purchaser of such
Offered Shares a new certificate evidencing such Offered Shares without the
legend set forth above (other than, in the case of TCI Shares Transferred
pursuant to Section 3.5, the portion of such legend referring to the
restrictions imposed by this Agreement) upon the receipt by TCI of evidence
satisfactory to TCI and its legal
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counsel that the Offered Shares are registered or that such sale will comply
with Rule 144 under the Securities Act of 1933, as amended, and any applicable
state securities laws, and upon satisfaction of the transfer procedures normally
applicable to the TCI Shares.
4.2 TERMINATION. This Agreement will terminate upon the earliest to occur of
-----------
(a) the death of Malone, (b) a TCI Change in Control that results from a
transaction that is approved by the Board of Directors of TCI at a time when the
majority of the members of such Board consist of persons who are, or are
appointed by, the persons who are directors of TCI as of the date of this
Agreement, or (c) the tenth anniversary of the date of this Agreement. The
termination of this Agreement will not affect the rights and obligations of the
parties accrued prior to such termination.
4.3 NOTICES. All notices, requests, demands and other communications required
-------
or permitted to be made pursuant to this Agreement will be in writing and will
be deemed to have been given if delivered in person or by courier, sent by
telecopy or sent by United States certified or registered mail, prepaid,
addressed as follows:
To TCI at:
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Stephen M. Brett, Executive Vice President
and General Counsel
Telecopy: (303) 488-3245
with a copy to:
Sherman & Howard L.L.C.
633 Seventeenth Street, Suite 3000
Denver, Colorado 80202
Attention: Charles Y. Tanabe, Esq.
Telecopy: (303) 298-0940
To Malone at:
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Telecopy: (303) 488-3201
To the Shareholder Group at:
InterMedia Partners
235 Montgomery Street, Suite 420
San Francisco, California 94104
Attention: Leo J. Hindery, Jr.
Telecopy: (415) 397-3978
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with a copy to:
Pillsbury Madison & Sutro LLP
235 Montgomery Street
San Francisco, California 94104
Attention: Gregg F. Vignos, Esq.
Telecopy: (415) 983-1200
Any party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this Section. Any notice
delivered personally or by courier will be deemed to be received on the date of
delivery; any notice sent by telecopy will be deemed to be received upon
confirmation of transmission by person or machine; and any notice so mailed will
be deemed to be received on the date shown on the return receipt (evidence of
rejection of delivery or inability to deliver because of a changed address of
which no notice was given pursuant to the provisions of this Agreement will be
deemed to be a receipt).
4.4 MODIFICATION; WAIVER. This Agreement may be modified or terminated by
--------------------
mutual agreement only by a writing signed by all the parties, and no provision
or condition herein may be waived other than by a writing signed by the party
waiving such provision or condition.
4.5 HEADINGS. Article and Section headings in this Agreement are for the sole
--------
purpose of convenient reference and in no way define, limit or prescribe the
scope or intent of this Agreement or any part hereof, and such headings will not
be considered in interpreting or construing this Agreement.
4.6 ASSIGNMENT. Any rights exercisable by Malone under this Agreement may be
----------
exercised by any designee of Malone. Except as provided in the preceding
sentence, no party will assign any of its rights under this Agreement or
delegate its duties hereunder unless it obtains the prior written consent of the
other parties, which consent may be withheld at each such party's absolute
discretion.
4.7 SPECIFIC PERFORMANCE. The parties acknowledge that Malone would be
--------------------
irreparably damaged if any member of the Shareholder Group violates or breaches
its obligations under Article II, and that Malone and TCI would be irreparably
damaged if any member of the Shareholder Group violates or breaches its
obligations under Article III, and that in either case money damages would be an
inadequate remedy for such breach or violation. Accordingly, each member of the
Shareholder Group agrees that the provisions of Article II will be specifically
enforceable by Malone and the provisions of Article III will be specifically
enforceable by Malone and TCI, and that Malone and TCI will be entitled to
temporary and permanent injunctive relief and other equitable remedies, at their
sole election, to enforce such provisions. Such rights of enforcement will be
without prejudice to any other right or remedy available to Malone or TCI.
4.8 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which may be deemed to be an original, and all of which
taken together will constitute one instrument.
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4.9 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF
-------------
DELAWARE, WITHOUT REGARD TO ANY CONFLICTS OF LAWS RULES.
4.10 OTHER. This Agreement constitutes the entire agreement of the parties
-----
regarding the subject matter hereof, and all prior or contemporaneous
agreements, understandings, representations and statements, oral or written, are
hereby merged into this Agreement. This Agreement will be binding upon and
inure to the benefit of the parties and, subject to the limitations set forth in
Section 4.5, their respective successors and assigns. The provisions of this
Agreement are for the exclusive benefit of the parties and their permitted
successors and assigns, and no other Person is intended to be a third party
beneficiary or to have any rights by virtue of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
IP SERIES B TRUST I
By:
- ----------------------------------- ------------------------------
John C. Malone Leo J. Hindery, Jr., Trustee
TELE-COMMUNICATIONS, INC. TRUST BENEFICIARIES:
By:
-------------------------------- ---------------------------------
Title: Stephen M. Brett Leo J. Hindery, Jr.
Executive Vice president
---------------------------------
Peter Kern
ROBIN HINDERY TRUST
By:
------------------------------
Stephen I. Leonard, Trustee
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EXHIBIT 7(J)
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (this "Agreement") is made as of August 5,
1997, by and among Tele-Communications, Inc., a Delaware corporation, John C.
Malone ("Malone"), the IP Series B Trust II (the "Trust"), Leo J. Hindery, Jr.,
both individually and as trustee of the Trust ("Hindery"), and the persons who
are the beneficiaries of the Trust as of the date of this Agreement.
In consideration of the mutual promises and covenants contained in this
Agreement, and intending to be legally bound, the parties agree as follows:
ARTICLE I: DEFINITIONS
1.1 DEFINITIONS. The following terms, when used in this Agreement, will have
-----------
the meanings set forth below.
Affiliate: of a Person is any other Person that Controls, is
Controlled by or is under common Control with such
Person.
Affiliate Offer: a bona fide written offer from an Affiliate of any
member of the Shareholder Group to purchase or
otherwise acquire all or part of the TCI Shares owned
by one or more members of the Shareholder Group.
Business Day: any day that is not a Saturday, a Sunday or a day
on which banking institutions in Denver, Colorado or
San Francisco, California are required or authorized to
be closed.
Control: the power to elect a majority of the directors (or
similar officials) of a Person or to direct or cause
the direction of the management and policies of a
Person, whether by the ownership of voting interests,
by contract or otherwise.
Election Notice: either a Malone Election Notice or a TCI Election
Notice, as the context requires.
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Fair Market Value: the cash price at which a willing seller would sell and
a willing buyer would buy specified property, both
having full knowledge of the relevant facts and being
under no compulsion to buy or sell, in an arm's-length
transaction without unusual time constraints.
HSR Act: the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
Material Consent: the consent, waiver or authorization of, or filing
with, any Person the lack of which reasonably could be
expected to result in (a) material liability to the
Offeror or the Purchaser if a purchase of TCI Shares by
Malone or TCI pursuant to Article III is consummated or
(b) either the Offeror or the Purchaser being deprived
of all or a material part of the benefits incident to
the purchase and sale of TCI Shares pursuant to Article
III.
Purchase Agreement: the Partnership Interest Purchase Agreement dated
as of August 5, 1997 between TCI ICM IV, Inc. and the
Trust.
Series A Shares: shares of Tele-Communications, Inc. Series A TCI Group
Common Stock.
Shareholder Group: Hindery, the Trust, any Person that is a trustee or
beneficiary of the Trust from time to time and each
Transferee.
TCI: Tele-Communications, Inc., a Delaware corporation.
TCI Change in Control: the acquisition by any Person, or by a group of Persons
that are under common Control (other than one or a
combination of the Persons that constitute the TCI
Control Group), within any period of 12 consecutive
months, of beneficial ownership (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934,
as amended) of Voting Stock of TCI representing in the
aggregate more than 50% of the total voting power of
all Voting Stock of TCI, calculated on a fully diluted
basis immediately prior to the date of such acquisition
(or, if such Voting Stock is acquired in more than
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one transaction during such 12-month period, the date
of the last of such transactions).
TCI Control Group: John C. Malone, the estate, beneficiaries of the estate
and the legal heirs of John C. Malone after the death
of John C. Malone, the estate, beneficiaries of the
estate and the legal heirs of Bob Magness, the
directors of TCI as of the date of this Agreement, any
trust or other investment vehicle for the primary
benefit of any of the foregoing persons or their heirs,
Kearns-Tribune Corporation or any successor thereto by
merger or consolidation, and the trustee under any
employee stock purchase plan or other employee benefit
plan of TCI, it being agreed that such trustee will be
deemed to have beneficial ownership of all the Voting
Stock of TCI held under the plan, whether or not
allocated to or vested in participants' accounts.
TCI Shares: the shares of Tele-Communications, Inc. Series B TCI
Group Common Stock acquired by the Trust pursuant to
the Purchase Agreement, and any other securities issued
in exchange for any of the foregoing (except Series A
Shares exchanged for TCI Shares as provided in Article
III), that are held by or for the benefit of any member
of the Shareholder Group from time to time.
Third Party Offer: a bona fide written offer from a prospective purchaser
that is not an Affiliate of any member of the
Shareholder Group to purchase all or a portion of the
TCI Shares.
Trading Price: the average of the daily market prices of one TCI
Share for 30 consecutive Business Days commencing 25
Business Days before the date on which TCI gives a TCI
Election Notice or Malone gives a Malone Election
Notice, as appropriate. The daily market price of a
TCI Share on any Business Day will be (a) the last sale
price on such day on the principal stock exchange on
which TCI Shares are then listed or admitted to trading
or (b) if no sale takes place on such date on that
exchange, the average of the reported closing bid and
asked prices on such day as officially noted on that
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exchange. The Trading Price will be appropriately
adjusted to reflect the effects of any stock dividend,
stock split, reclassification or combination affecting
TCI Shares as a class, the record date or ex-dividend
date of which occurs during the period in which the
Trading Price is to be determined or thereafter prior
to the closing of the purchase of TCI Shares for which
the calculation of the Trading Price is required to be
made.
Transfer: with respect to any property, a sale, exchange,
transfer, assignment, pledge, grant of a security
interest in or other disposition of all or any
interest, of record or beneficially, in such property
(whether voluntary, involuntary or by operation of
law).
Transferee: a Person to whom a Transfer of TCI Shares is made in
compliance with this Agreement.
Voting Stock: the issued and outstanding capital stock of a
corporation having general voting power under ordinary
circumstances to elect directors of the corporation,
but not including any capital stock that has or would
have such voting power solely by reason of the
happening of any contingency.
ARTICLE II: VOTING ARRANGEMENTS
Hindery and each other member of the Shareholder Group agree that Hindery,
as the trustee of the Trust, will have the exclusive right to exercise all of
the voting and consent rights associated with the TCI Shares on all matters as
to which such voting or consent rights are required or permitted to be
exercised, and that Hindery will exercise such rights as Malone directs.
Hindery and, if required or deemed desirable by Malone, each other member of the
Shareholder Group, will execute and deliver to Malone such proxies and other
instruments and documents as Malone may request from time to time to give effect
to or to evidence the rights granted in this Article II.
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<PAGE>
ARTICLE III: TRANSFER RESTRICTIONS
3.1 TCI SHARE TRANSFERS. No member of the Shareholder Group will Transfer any
-------------------
of the TCI Shares, or any interest therein, held by it or of which it is a
beneficial owner except to the extent specifically permitted by this Article
III. Any Transfer of TCI Shares or an interest therein other than as
specifically permitted by this Article III will be void and of no effect. The
restrictions on, and obligations with respect to, Transfers of TCI Shares set
forth in this Agreement will be in addition to, and not in lieu of, any other
restrictions or obligations imposed by applicable law or set forth in any
instrument or agreement by which the TCI Shares or any member of the Shareholder
Group is bound.
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<PAGE>
3.2 RIGHT OF FIRST REFUSAL.
----------------------
(a) A member of the Shareholder Group may Transfer all or any portion of
the TCI Shares held or beneficially owned by it to an Affiliate or to a Person
that is not an Affiliate only after complying with the provisions of this
Section 3.2. No member of the Shareholder Group may Transfer any record or
beneficial interest in any TCI Share separately from all of the legal and
beneficial interests in such TCI Share, except to the extent necessary for the
TCI Shares to be held of record by the Trust or for TCI Shares to be distributed
to beneficiaries of the Trust to the extent permitted by Section 3.4. If the
Trust or any other member of the Shareholder Group wishes to sell on the NASDAQ
National Market System or on any national securities exchange (an "Open Market
Sale"), or receives and wishes to accept a Third Party Offer or an Affiliate
Offer for, or, in the case of Hindery, wishes to contribute to an entity
qualified under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended (a "Charitable Contribution"), all or any portion of the TCI Shares held
or beneficially owned by it (the "Offered Shares"), that Person (the "Offeror")
must first offer to Malone and TCI the opportunity to purchase the Offered
Shares. The offer will be made by notice (an "Offer Notice") given by the
Offeror to Malone and TCI (a) accompanied (i) in the case of a Third Party
Offer, by a copy of the Third Party Offer that specifically identifies the
Person making the Third Party Offer and, to the extent known to the Offeror,
each Person that directly or indirectly Controls such Person, (ii) in the case
of an Affiliate Offer, by a notice that specifically identifies the Affiliate
making the Affiliate Offer and each Person that directly or indirectly Controls
such Affiliate, or (iii) in the case of a Charitable Contribution, by a notice
identifying the charitable organization to which Hindery desires to transfer
Offered Shares, and (b) in any case stating the Offeror's bona fide intention to
Transfer the Offered Shares in an Open Market Sale or pursuant to the Third
Party Offer, Affiliate Offer, or Charitable Contribution. The Offeror will
provide such additional information as may reasonably be requested by Malone or
TCI to evaluate the terms of the prospective Transfer. Malone may elect to
purchase all or a portion of the Offered Shares by giving notice of such
election to the Shareholder Group and TCI (the "Malone Election Notice") within
20 days after his receipt of the Offer Notice (the "Malone Election Period").
If Malone does not give an Election Notice for all of the Offered Shares within
the Malone Election Period, TCI will have a period of 10 days after the end of
the Malone Election Period (the "TCI Election Period") within which it may
elect, by notice to Malone and the Offeror (a "TCI Election Notice"), to
purchase the Offered Shares that Malone has not elected to purchase.
(b) The consideration payable by Malone or TCI, as applicable (the
"Purchaser"), for each Offered Share that the Purchaser has elected to purchase,
at the Purchaser's election will be either (i) one Series A Share (or that
number of Series A Shares, or shares of any successor class or series of stock
issued in replacement of Series A Shares, into which one share of Tele-
Communications, Inc. Series B TCI Group Common Stock is convertible at the time
of determination) or (ii) if the Offered Shares are the subject of a Third Party
Offer, cash in an amount equal to the consideration payable for one TCI Share
pursuant to the Third Party Offer, and if the Offered Shares are
28
<PAGE>
to be sold in an Open Market Sale or are the subject of an Affiliate Offer, cash
in an amount equal to the Trading Price; provided, however, that if the Offered
Shares are to be Transferred as a Charitable Contribution, the consideration
payable by the Purchaser for the Offered Shares will be determined under
paragraph (b)(i) and the Purchaser will not have the right to elect to pay the
consideration determined under paragraph (b)(ii) for such Offered Shares. The
Purchaser will indicate in its Election Notice whether it elects to pay the
purchase price in cash or Series A Shares. To the extent the consideration
proposed to be paid for TCI Shares in a Third Party Offer consists of property
other than cash, if the Purchaser elects to purchase Offered Shares for cash it
will pay an amount equal to the Fair Market Value of such property. To the
extent TCI is the Purchaser and elects to use Series A Shares as consideration
for Offered Shares, the Offeror will convert such Offered Shares into Series A
Shares. Any Series A Shares delivered by Malone as consideration for Offered
Shares pursuant to this paragraph (b) will have the registration rights set
forth in Annex A.
(c) For purposes of this Article III, the Fair Market Value of the non-cash
consideration proposed to be paid for TCI Shares in a Third Party Offer will be
determined by agreement of the Offeror and the Purchaser. If they cannot agree
on such Fair Market Value within 10 Business Days after an Election Notice is
given, such Fair Market Value will be determined by an appraiser acceptable to
the Offeror and the Purchaser. If they are unable to agree on a single
appraiser within 10 Business Days after an Election Notice is given (the
"Selection Period"), the Offeror and the Purchaser each will select an appraiser
by giving notice to each other of such appraiser's identity within 10 Business
Days after the end of the Selection Period. The Offeror and the Purchaser each
will cause the appraiser they have selected to determine the Fair Market Value
of the non-cash consideration in question and to submit a written report of its
determination within 30 Business Days after the appraiser is selected. If the
higher of the two appraisals is equal to or less than 120% of the lower
appraisal, the average of the two will be the Fair Market Value of the non-cash
consideration. If the higher of the two appraisals is more than 120% of the
lower appraisal, the two appraisers will appoint a third appraiser within 10
Business Days and cause the third appraiser to submit a written report of its
determination of the Fair Market Value of the non-cash consideration within 30
Business Days after such appraiser's selection. Such third appraiser will not
be informed of the determinations of the other two appraisers. If three
appraisals are necessary, then the average of the two appraisals in which the
Fair Market Values are closest together will be deemed the Fair Market Value of
the non-cash consideration or, if the highest and lowest appraisal differ from
the middle appraisal by equal amounts, then the middle appraisal will be deemed
the Fair Market Value. Any appraiser appointed pursuant to this Section 3.2(c)
will be a nationally-recognized investment banking firm. The Offeror and the
Purchaser will pay the fees and costs of the appraisers appointed by them. The
Offeror and the Purchaser will share equally the fees and costs of any third
appraiser appointed pursuant to this Section 3.2(c).
(d) Unless the Offeror and the Purchaser otherwise agree, the closing of
any purchase of TCI Shares pursuant to this Section 3.2 will be held at the
principal
29
<PAGE>
corporate offices of TCI at 10:00 a.m. local time on the later of (i) the day
that is 20 days after the Election Notice is given and (ii) two Business Days
after the parties have obtained all Material Consents. If a purchase of TCI
Shares pursuant to this Section 3.2 requires any filing under the HSR Act, the
requirement for obtaining that consent for purposes of this Section 3.2 will be
deemed satisfied if the applicable waiting period under the HSR Act has expired
or has been terminated without the receipt of a notice of objection or the
commencement or threat of litigation by a government entity to restrain the
consummation of the purchase of the TCI Shares to be purchased. The Offeror and
the Purchaser will cooperate to prevent any inconsistency between any HSR Act
filings they are required to make and will furnish to each other such
information and reasonable assistance as the other may reasonably request in
connection with such filings and any request by a governmental agency for
additional information. Each party to this Agreement covenants to and with the
other parties that it will use its reasonable best efforts to obtain any
Material Consent required to consummate any purchase of TCI Shares by Malone or
TCI pursuant to this Article III as promptly as practicable.
(e) At the closing of any purchase and sale of the Offered Shares by the
Purchaser, (i) the Purchaser will pay the purchase price in the form in which
the Purchaser has elected to make such payment pursuant to Section 3.2(b) and
(ii) the Offeror will transfer to the Purchaser all of the record and beneficial
interests in the Offered Shares to be purchased, free and clear of all liens,
claims and encumbrances, and will deliver such bills of sale, assignments and
other agreements and instruments to the Purchaser, and will take all such other
reasonable actions at and after the closing as the Purchaser may request, to
effectively vest the Offered Shares to be purchased in the Purchaser.
(f) If any Material Consent cannot be obtained within 12 months after the
date the Election Notice is given, the Election Notice will be deemed rescinded
and the Offeror may Transfer the Offered Shares (i) in an Open Market Sale on
such terms as are generally available on such markets if a proposed Open Market
Sale by the Offeror gave rise to the right of first refusal pursuant to this
Section 3.2, (ii) pursuant to a Charitable Contribution, or (iii) to the Person
that made the Third Party Offer or Affiliate Offer for the consideration and
upon the terms and conditions set forth in the Third Party Offer or Affiliate
Offer (or, if the Person that made the Third Party Offer or Affiliate Offer no
longer wishes to purchase the Offered Shares, in an Open Market Sale on such
terms as are generally available on such markets) if a Third Party Offer or
Affiliate Offer gave rise to the right of first refusal pursuant to this Section
3.2, in any case for a period of 60 days beginning on the day after the first
anniversary of the date the Election Notice was given, provided that the Offered
--------
Shares so Transferred are first converted into Series A Shares. Upon such
conversion the Series A Shares will not again be subject to the right of first
refusal provisions of this Section 3.2 prior to the Transfer of such Series A
Shares within the 60-day period as permitted by this paragraph (f). If the
Offered Shares are not so Transferred during such 60-day period, the Offeror's
right to Transfer such Offered Shares will again be subject to the provisions of
this Section 3.2.
30
<PAGE>
(g) If Malone and TCI do not elect to purchase all of the Offered Shares,
the Offeror will be free for a period of 60 days after the end of the TCI
Election Period to Transfer the Offered Shares that Malone and TCI have not
elected to purchase in an Open Market Sale on such terms as are generally
available on such markets, pursuant to a Charitable Contribution, or to the
Person that made the Third Party Offer or Affiliate Offer for the consideration
and upon the terms and conditions set forth in the Third Party Offer or
Affiliate Offer, as applicable. If those Offered Shares are not so Transferred
during such 60-day period, the Offeror's right to Transfer such Offered Shares
will again be subject to the provisions of this Section 3.2.
(h) If any Offeror entitled to Transfer Offered Shares during a 60-day
period pursuant to paragraph (f) or (g) is precluded from Transferring all of
the Offered Shares such Offeror otherwise would be entitled to Transfer solely
because of restrictions imposed by Rule 144 under the Securities Act of 1933, as
amended, on the volume of securities that may be sold within a three-month
period, such Offeror may Transfer the Offered Shares the Offeror is precluded by
Rule 144 from Transferring during an additional period of 90 days, beginning on
the day after the end of the 60-day Transfer period permitted by paragraphs (f)
and (g).
(i) Except for the conversion of Offered Shares into Series A Shares
pursuant to paragraph (f), any member of the Shareholder Group who wishes to
convert any TCI Shares of which such Person is the holder or the beneficial
owner into Series A Shares will first offer to Malone and TCI the opportunity to
purchase such TCI Shares, which will be treated as Offered Shares that are
subject to the provisions of Section 3.2(a). If Malone gives a Malone Election
Notice or TCI gives a TCI Election Notice with respect to all or any portion of
such Offered Shares, the consideration payable upon the purchase of such Offered
Shares will be the Trading Price, payable in the form elected by the Purchaser
as described in Section 3.2(b).
3.3 CHANGE IN CONTROL OFFER. If any Third Party Offer is made that, if
-----------------------
consummated, would result in a TCI Change in Control, and the transaction
represented by the Third Party Offer has been approved by TCI's Board of
Directors, the purchase price payable by Malone for Offered Shares, to the
extent Malone exercises his right of first refusal set forth in this Article
III, must be paid in cash and not in Series A Shares. The preceding sentence
will not preclude TCI, if it exercises its right of first refusal to purchase
all or part of the Offered Shares that Malone does not elect to purchase, from
paying the purchase price therefor in cash or Series A Shares, as it may elect.
3.4 DISTRIBUTIONS TO BENEFICIARIES. Notwithstanding any other provision of
------------------------------
this Agreement, the Trust may distribute to any Person that is a beneficiary of
the Trust from time to time the number of TCI Shares that are beneficially owned
by such Person, provided that such Person complies with the provisions of
Section 3.6.
3.5 OTHER PERMITTED TRANSFERS. Notwithstanding any other provision of this
-------------------------
Agreement, subject to the provisions of Section 3.6 any member of the
Shareholder
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<PAGE>
Group may (a) pledge all or part of the TCI Shares of which it is the legal or
beneficial owner to Colorado National Bank or any other lending institution as
security for a loan, (b) Transfer all or part of the TCI Shares owned by such
Person to Lamar Alexander, Donne F. Fisher, Peter Kern or Lisa Perreault or (c)
Transfer all or part of the TCI Shares owned by such Person to any spouse,
parent, child, grandchild or sibling of such Person or to any trust or other
investment vehicle established primarily for the benefit of any of the foregoing
persons or their heirs, provided that prior to a Transfer permitted by clause
(a), (b) or (c) the member of the Shareholder Group making the Transfer causes
the Transferee to provide to TCI a written certificate establishing to TCI's
satisfaction that the Transfer qualifies as a private placement of the TCI
Shares to be Transferred under applicable securities laws and as to the
Transferee's investment intent with respect to such TCI Shares.
3.6 OTHER CONDITIONS TO TRANSFER. Any Person (other than Malone and TCI) to
----------------------------
whom TCI Shares are permitted by this Article III to be Transferred must (except
in the case of a Transfer of Shares pursuant to Section 3.2(g)), prior to such
Transfer, agree in writing to be bound by the terms of this Agreement as a
member of the Shareholder Group if such Person is not already a party hereto.
No member of the Shareholder Group will make any Transfer of TCI Shares that
would violate U.S. federal or state securities laws.
ARTICLE IV: MISCELLANEOUS
4.1 STOCK CERTIFICATE LEGEND. All certificates representing TCI Shares will
------------------------
bear a legend in substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or any state securities
laws, and may not be sold, pledged or otherwise transferred or
encumbered unless they are so registered or unless an exemption from
registration is available, and except in accordance with the
Stockholders' Agreement dated as of August ___, 1997 among the Company
and certain of its stockholders, a copy of which agreement is
available for inspection at the offices of the Company."
If an Offeror Transfers all or part of the Offered Shares to a Transferee as
permitted by Section 3.2(f) or 3.2(g), TCI will issue to the purchaser of such
Offered Shares a new certificate evidencing such Offered Shares without the
legend set forth above (other than, in the case of TCI Shares Transferred
pursuant to Section 3.5, the portion of such legend referring to the
restrictions imposed by this Agreement) upon the receipt by TCI of evidence
satisfactory to TCI and its legal counsel that the Offered Shares are registered
or that such sale will comply with Rule 144 under the Securities Act of 1933, as
amended,
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<PAGE>
and any applicable state securities laws, and upon satisfaction of the transfer
procedures normally applicable to the TCI Shares.
4.2 TERMINATION. This Agreement will terminate upon the earliest to occur of
-----------
(a) the death of Malone, (b) a TCI Change in Control that results from a
transaction that is approved by the Board of Directors of TCI at a time when the
majority of the members of such Board consist of persons who are, or are
appointed by, the persons who are directors of TCI as of the date of this
Agreement, or (c) the tenth anniversary of the date of this Agreement. The
termination of this Agreement will not affect the rights and obligations of the
parties accrued prior to such termination.
4.3 NOTICES. All notices, requests, demands and other communications required
-------
or permitted to be made pursuant to this Agreement will be in writing and will
be deemed to have been given if delivered in person or by courier, sent by
telecopy or sent by United States certified or registered mail, prepaid,
addressed as follows:
To TCI at:
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Stephen M. Brett, Executive Vice President
and General Counsel
Telecopy: (303) 488-3245
with a copy to:
Sherman & Howard L.L.C.
633 Seventeenth Street, Suite 3000
Denver, Colorado 80202
Attention: Charles Y. Tanabe, Esq.
Telecopy: (303) 298-0940
To Malone at:
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Telecopy: (303) 488-3201
To the Shareholder Group at:
InterMedia Partners
235 Montgomery Street, Suite 420
San Francisco, California 94104
33
<PAGE>
Attention: Leo J. Hindery, Jr.
Telecopy: (415) 397-3978
with a copy to:
Pillsbury Madison & Sutro LLP
235 Montgomery Street
San Francisco, California 94104
Attention: Gregg F. Vignos, Esq.
Telecopy: (415) 983-1200
Any party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this Section. Any notice
delivered personally or by courier will be deemed to be received on the date of
delivery; any notice sent by telecopy will be deemed to be received upon
confirmation of transmission by person or machine; and any notice so mailed will
be deemed to be received on the date shown on the return receipt (evidence of
rejection of delivery or inability to deliver because of a changed address of
which no notice was given pursuant to the provisions of this Agreement will be
deemed to be a receipt).
4.4 MODIFICATION; WAIVER. This Agreement may be modified or terminated by
--------------------
mutual agreement only by a writing signed by all the parties, and no provision
or condition herein may be waived other than by a writing signed by the party
waiving such provision or condition.
4.5 HEADINGS. Article and Section headings in this Agreement are for the sole
--------
purpose of convenient reference and in no way define, limit or prescribe the
scope or intent of this Agreement or any part hereof, and such headings will not
be considered in interpreting or construing this Agreement.
4.6 ASSIGNMENT. Any rights exercisable by Malone under this Agreement may be
----------
exercised by any designee of Malone. Except as provided in the preceding
sentence, no party will assign any of its rights under this Agreement or
delegate its duties hereunder unless it obtains the prior written consent of the
other parties, which consent may be withheld at each such party's absolute
discretion.
4.7 SPECIFIC PERFORMANCE. The parties acknowledge that Malone would be
--------------------
irreparably damaged if any member of the Shareholder Group violates or breaches
its obligations under Article II, and that Malone and TCI would be irreparably
damaged if any member of the Shareholder Group violates or breaches its
obligations under Article III, and that in either case money damages would be an
inadequate remedy for such breach or violation. Accordingly, each member of the
Shareholder Group agrees that the provisions of Article II will be specifically
enforceable by Malone and the provisions of Article III will be specifically
enforceable by Malone and TCI, and that Malone and TCI will be entitled to
temporary and permanent injunctive relief and other equitable
34
<PAGE>
remedies, at their sole election, to enforce such provisions. Such rights of
enforcement will be without prejudice to any other right or remedy available to
Malone or TCI.
4.8 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which may be deemed to be an original, and all of which
taken together will constitute one instrument.
4.9 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF
-------------
DELAWARE, WITHOUT REGARD TO ANY CONFLICTS OF LAWS RULES.
4.10 OTHER. This Agreement constitutes the entire agreement of the parties
-----
regarding the subject matter hereof, and all prior or contemporaneous
agreements, understandings, representations and statements, oral or written, are
hereby merged into this Agreement. This Agreement will be binding upon and
inure to the benefit of the parties and, subject to the limitations set forth in
Section 4.5, their respective successors and assigns. The provisions of this
Agreement are for the exclusive benefit of the parties and their permitted
successors and assigns, and no other Person is intended to be a third party
beneficiary or to have any rights by virtue of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
IP SERIES B TRUST II
- ---------------------------- By:
John C. Malone ----------------------------------
Leo J. Hindery, Jr., Trustee
TELE-COMMUNICATIONS, INC. TRUST BENEFICIARIES:
By:
------------------------- ------------------------------------
Stephen M. Brett Lamar Alexander
Executive Vice President
and General Counsel
------------------------------------
Donne F. Fisher
------------------------------------
Leo J. Hindery, Jr.
------------------------------------
Peter Kern
------------------------------------
David L. Klott
------------------------------------
Robert J. Lewis
------------------------------------
Lisa A. Perreault
------------------------------------
Allison Leopold Tilley
------------------------------------
Gregg F. Vignos
36
<PAGE>
Fisher Capital Partners, Ltd., a Colorado
limited partnership
By Fisher Capital Corporation, a Colorado
corporation
Its General Partner
By:
------------------------------------
Donne F. Fisher
Its President
Robin Hindery Trust
By:
------------------------------------
Stephen I. Leonard, Trustee
M & ME Group, LLC, a Delaware limited
liability company
By M & ME Group, Inc., a Delaware
corporation
By:
------------------------------------
Mike V. Breber
Its President
37
