<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(A)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(A)
(Amendment No. 9)*
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 A TCI Ventures Group Common Stock, par
value $1.00 per share.
(4) Tele-Communications, Inc. Series B TCI Group Common Stock, par value $1.00
per share.
(5) Tele-Communications, Inc. Series B Liberty Media 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)
(1) Series A TCI Group Common Stock: 87924V101
(2) Series A Liberty Group Common Stock: 87924V507
(3) Series A Ventures Group Common Stock: 87924V887
(4) Series B TCI Group Common Stock: 87924V200
(5) Series B Liberty Group Common Stock: 87924V606
(6) Series B Ventures Group Common Stock: 87924V879
(7) Class B Preferred Stock: 87924V309
- --------------------------------------------------------------------------------
(CUSIP Numbers)
Dr. John C. Malone
c/o Tele-Communications, Inc.
5619 DTC Parkway, Englewood, CO 80111
(303-267-5500)
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 24, 1998
-------------
(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(e), 13d-1(f) or 13d-1(g), check the following
box**: [_]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 19 Pages)
_________________________________________
* 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 10
<PAGE>
Cusip No. for Series A TCI Group Common Stock 87924V101
Cusip No. for Series A Liberty Group Common Stock 87924V507
Cusip No. for Series A Ventures Group Common Stock 87924V887
Cusip No. for Series B TCI Group Common Stock 87924V200
Cusip No. for Series B Liberty Group Common Stock 87924V606
Cusip No. for Series B Ventures Group Common Stock 87924V879
Cusip No. for Class B Preferred Stock 87924V309
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (Entities Only)
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
BK
- --------------------------------------------------------------------------------
(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.
- --------------------------------------------------------------------------------
Number of Shares Beneficially Owned by Each Reporting Person With
(7) Sole Voting Power
0 Shares
(8) Shared Voting Power
1,400,146 Shares of Series A TCI Group/1/
54,449,228 Shares of Series B TCI Group/2/,/3/
1,137,807 Shares of Series A Liberty Group/2/,/4/
27,233,811 Shares of Series B Liberty Group/2/,/5/
1,200,000 Shares of Series A Ventures Group/6/
45,039,888 Shares of Series B Ventures Group/2/,/7/
273,600 Shares of Class B Preferred/2/
(9) Sole Dispositive Power
0 Shares
(10) Shared Dispositive Power/8/
1,400,146 Shares of Series A TCI Group/1/
36,244,572 Shares of Series B TCI Group/2/,/3/
1,137,807 Shares of Series A Liberty Group/2/,/4/
12,941,092 Shares of Series B Liberty Group/2/,/5/
1,200,000 Shares of Series A Ventures Group/6/
24,634,494 Shares of Series B Ventures Group/2/,/7/
273,600 Shares of Class B Preferred/2/
Page 2 of 19 Pages
<PAGE>
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,400,146 Shares of Series A TCI Group/1/
54,449,228 Shares of Series B TCI Group/2,/3/
1,137,807 Shares of Series A Liberty Group/2,/4/
27,233,811 Shares of Series B Liberty Group/2,/5/
1,200,000 Shares of Series A Ventures Group/6/
45,039,888 Shares of Series B Ventures Group/2/,/7/
273,600 Shares of Class B Preferred/2/
- --------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)/9/
Series A TCI Group less than 1%
Series B TCI Group 84.2%
Series A Liberty Group less than 1%
Series B Liberty Group 85.8%
Series A Ventures Group less than 1%
Series B Ventures Group 93.5%
Class B Preferred 17.6%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person
IN
____________________
1. Includes 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 980,000 shares are currently exercisable, 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.
2. Includes, as applicable, 784,892 shares of Series B TCI Group Stock, 12,726
shares of Series A Liberty Group Stock, 439,875 shares of Series B Liberty
Group Stock, 793,240 shares of Series B Ventures Group Stock, and 6,900
shares of Class B Preferred Stock beneficially owned by Dr. Malone's
spouse, as to which Dr. Malone disclaims any beneficial ownership thereof.
3. Includes 14,511,570 shares of Series B TCI Group Stock that Dr. Malone has
the right to acquire at any time prior to June 30, 1999, without giving
effect to certain proportionate rights thereto by the Magness Group. Dr.
Malone has delivered notice to the Issuer of his intent to exercise such
right subject to the Magness Group's right to a proportionate share of
12,406,238 of such shares and subject to any regulatory approvals (See Item
4). Also includes 2,795,000 shares of Series B TCI Group Stock pledged as
security for a loan. Also includes 1,684,775 shares of Series B TCI Group
Stock on which Dr. Malone has been granted the voting rights and 16,519,881
shares of Series B TCI Group Stock on which Dr. Malone may exercise voting
rights if the holders of such shares and Dr. Malone disagree on how the
shares should be voted; however, Dr. Malone has no right to dispose of such
shares (which are excluded in (10) above).
4. Includes 1,125,000 shares Dr. Malone would acquire upon the exercise of
stock options granted in tandem with stock appreciation rights of which
options for 787,500 shares are currently exercisable. 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.
5. Includes 750,000 shares of Series B Liberty Group Stock pledged as security
for a loan and 14,292,719 shares of Series B Liberty Group Stock on which
Dr. Malone may exercise voting rights if the holders of such shares and Dr.
Malone disagree on how the shares should be voted; however, Dr. Malone has
no right to dispose of such shares (which are excluded in (10) above).
6. Includes 1,200,000 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 exercisable, 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.
Page 3 of 19 Pages
<PAGE>
7. Includes 1,721,360 shares of Series B Ventures Group Stock on which Dr.
Malone has been granted voting rights and 18,684,034 shares of Series B
Ventures Group Stock on which Dr. Malone may exercise voting rights if the
holders of such shares and Dr. Malone disagree on how the shares should be
voted; however, Dr. Malone has no right to dispose of such shares (which
are excluded in (10) above). Also, includes 2,800,000 shares Dr. Malone
would acquire upon the exercise of stock options granted in tandem with
stock appreciation rights of which none are currently exercisable.
8. Subject to the Call Agreement. (See Item 6 hereof)
9. 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 classes of
stock are aggregated, the Reporting Person may be deemed to beneficially
own voting equity securities representing approximately 48% of the voting
power with respect to a general election of directors of the Issuer.
Page 4 of 19 Pages
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 9)
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 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. 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.
ITEM 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
Item 3 of the Statement is hereby amended and supplemented by adding the
following:
Page 5 of 19 Pages
<PAGE>
Acquisition of Shares Pursuant to June Option
---------------------------------------------
Dr. Malone expects that the source of the funds for the acquisition of the
shares of Series B TCI Group Stock pursuant to the June Option will be a
personal loan obtained from a commercial bank. Dr. Malone has not yet finalized
the terms of any such arrangement but anticipates that the loan will be secured
by the pledge of various securities of the Issuer.
Release of Pledged Shares
-------------------------
On July 23, 1997, Dr. Malone entered into a revolving credit facility for
the acquisition of certain common stock of the Issuer and entered into a Pledge
Agreement, dated as of July 23, 1997, whereby Dr. Malone pledged 11,500,000
shares of Series B TCI Group Stock and 4,626,537 shares (as adjusted for
dividends) of Series B Liberty Group Stock. Dr. Malone has retired such loan and
the shares pledged have been released.
ITEM 4. Purpose of Transaction
----------------------
Item 4 of the Statement is hereby amended and supplemented by adding the
following:
AT&T Voting Agreement
---------------------
On June 23, 1998, Dr. Malone and Leslie Malone, his spouse (collectively,
the "Malone Parties"), entered into a voting agreement, dated as of June 23,
1998 (the "Voting Agreement"), with AT&T Corp., a New York corporation ("AT&T").
The Voting Agreement was entered into in connection with the execution and
delivery of the Agreement and Plan of Restructuring and Merger, dated as of June
23, 1998, among the Issuer, AT&T and Italy Merger Corp. (the "Merger
Agreement").
Pursuant to the Voting Agreement, each of the Malone Parties has agreed to
vote all Covered Shares (as defined in the Voting Agreement) in favor of the
Merger (the "Merger") of Italy Merger Corp. with and into the Issuer and the
other transactions contemplated by the Merger Agreement, and against any other
Takeover Proposal (as defined in the Voting Agreement). The Voting Agreement
also contains restrictions on the ability of the Malone Parties to dispose of
their Covered Shares; such restrictions (i) are subject to certain exceptions
and (ii) extend, under certain circumstances, beyond the date of termination of
the Merger Agreement. The description of the Voting Agreement is qualified in
its entirety by reference to the Voting Agreement attached as Exhibit 7(o) to
this Amendment No. 9 and incorporated herein by reference.
Exercise of June Option
-----------------------
In addition, on June 24, 1998, Dr. Malone delivered notice to the Issuer
exercising his right to purchase up to 14,511,570 shares of Series B TCI Group
Stock pursuant to the June Option. In accordance with the Stockholders'
Agreement, Dr. Malone has notified the Magness Group of his exercise under the
June Option and of their right to participate in such exercise. The
representative of the Magness Group has advised Dr. Malone that the Magness
Group will participate in such purchase up to the Magness Group's proportionate
share. Subject to final verification and agreement of each group's
proportionate share, upon the closing of the exercise of the June Option, the
Malone Group would acquire 8,718,770 shares of the 14,511,570 shares of Series B
TCI Group Stock and the Magness Group would acquire 5,792,800 shares of the
14,511,570 shares of Series B TCI Group Stock. The exercise price per share of
the June Option is $35.5875 based on the average of the closing sales prices of
the Series B TCI Group Stock on Nasdaq for the five trading days preceding the
date of exercise. Such exercises are subject to any required regulatory
approvals, including any approvals required under the HSR Act.
Gifts of Shares
---------------
In February 1998, Dr. Malone converted 100,000 shares of his Series B TCI
Group Stock into Series A TCI Group Stock and simultaneously gifted the 100,000
shares of Series A TCI Group Stock to a university. Dr. Malone also converted
200,000 shares of Series B Ventures Group Stock into Series A Ventures Group
Stock and
Page 6 of 19 Pages
<PAGE>
simultaneously gifted the 200,000 shares of Series A Ventures Group Stock to the
university. Finally, in May 1998, Dr. Malone converted 138,889 shares of his
Series B TCI Group Stock into Series A TCI Group Stock and simultaneously gifted
the 138,889 shares of Series A TCI Group Stock to a charity.
ITEM 5. Interest in Securities of the Issuer
------------------------------------
Item 5 (a) of the Statement is hereby amended and supplemented by adding
the following :
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) 1,400,146 shares of Series A TCI Group
Stock, which includes options for 1,400,000 shares of which options for 980,000
shares are currently exercisable and represents less than 1% of the outstanding
shares of Series A TCI Group Stock; (b) 54,449,228 shares of Series B TCI Group
Stock, which includes Dr. Malone's right to acquire from the Issuer 14,511,570
shares (the "June Option"), without giving effect to the Magness Group's right
to acquire their proportionate share of 12,406,238 shares thereof (see Item 6
below), and includes his right to direct the voting of 1,684,775 shares owned by
the Trusts and 16,519,881 shares owned by the Magness Group (see Item 6 below),
and represents 84.2% of the outstanding shares of Series B TCI Group Stock; (c)
1,137,807 shares of Series A Liberty Group Stock, which includes options for
1,125,000 shares of which options for 787,500 shares are currently exercisable
and represents less than 1% of the outstanding shares of Series A Liberty Group
Stock; (d) 27,233,811 shares of Series B Liberty Group Stock, which includes his
right to direct the voting of 14,292,719 shares owned by the Magness Group and
represents 85.8% of the outstanding shares of Series B Liberty Group Stock; (e)
1,200,000 shares of Series A Ventures Group Stock, which consists solely of
options for such shares of which options for 840,000 shares are currently
exercisable and represents less than 1% of the outstanding shares of Series A
Ventures Group Stock; and (f) 45,039,888 shares of Series B Ventures Group
Stock, which includes his right to direct the voting of 1,721,360 shares owned
by the Trusts and 18,684,034 shares owned by the Magness Group (see Item 6
below), and options for 2,800,000 shares of which none are currently exercisable
and represents 93.5% of the outstanding shares of Series B Ventures Group Stock.
In addition, Dr. Malone beneficially owns 273,600 shares of Class B Preferred
Stock, which represents 17.6% 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 April 30,1998 (adjusted for the
transactions disclosed in Item 4 above and Item 5(c) below), and Dr. Malone's
options as if exercised in full), as follows: 472,207,363 shares of Series A TCI
Group Stock; 50,126,345 shares of Series B TCI Group Stock; 326,076,668 shares
of Series A Liberty Group Stock; 31,745,757 shares of Series B Liberty Group
Stock; 377,114,654 shares of Series A Ventures Group Stock; 45,367,134 shares of
Series B Ventures Group Stock; and 1,552,490 shares of Class B Preferred Stock.
When all series and classes of stock beneficially owned by Dr. Malone are
aggregated, Dr. Malone may be deemed to beneficially own voting equity
securities representing approximately 48% of the voting power with respect to a
general election of directors of the Issuer.
Item 5 (b) of the Statement is hereby amended and supplemented by adding
the following:
Pursuant to the Voting Agreement, AT&T may be deemed to share beneficial
ownership of the Covered Shares because AT&T has the right to (i) require the
Malone Parties to vote in favor of the Merger and against certain other
transactions and (ii) restrict their disposition of Covered Shares. As a
result, AT&T may be deemed to have shared voting and dispositive power over the
Covered Shares with each of the Malone Parties. Such shared voting power
extends to those shares owned by the Magness Group that Dr. Malone has the power
to vote in the event that he and the members of the Magness Group are unable to
agree upon how such shares are to be voted. The restrictions on disposition of
shares pursuant to the Voting Agreement do not extend to those shares owned by
members of the Magness Group.
Item 5 (c) of the Statement is hereby amended and supplemented by adding
the following:
Page 7 of 19 Pages
<PAGE>
As previously described, Dr. Malone has delivered a notice of exercise to
the Issuer pursuant to the June Option as to up to 14,511,570 shares of Series B
TCI Group Stock. Such exercise is subject to the receipt of any required
regulatory approvals and the expiration or termination of the waiting period
under the HSR Act, if any.
In addition, Dr. Malone made the gifts described above in Item 4.
ITEM 6. Contract, Arrangements, Understandings or Relationships With Respect to
-----------------------------------------------------------------------
Securities of the Issuer
-------------------------
The information set forth in Items 3, 4 and 5 is hereby incorporated by
reference herein.
ITEM 7. Material to be filed as Exhibits
--------------------------------
7(o) Voting Agreement, dated as of June 23, 1998, among the AT&T Corp.,
John C. Malone and Leslie Malone.
Page 8 of 19 Pages
<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. 9 to the Statement
is true, complete and correct.
/s/ John C. Malone
July 2, 1998 -------------------------
Dr. John C. Malone
Page 9 of 19 Pages
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT PAGE
- -------------- ------- ----
7(o) Voting Agreement, dated as of June 23, 1998, 11
among the AT&T Corp., John C. Malone and
Leslie Malone.
Page 10 of 19 Pages
<PAGE>
Exhibit - 7.0
AGREEMENT
---------
AGREEMENT, dated as of June 23, 1998, by and among AT&T Corp., a New
York corporation ("Parent"), on the one hand, and Dr. John C. Malone, a resident
of Colorado, individually and in any Representative Capacity (as defined in
Schedule I to this Agreement) ("JM"), and Leslie Malone, a resident of Colorado,
individually and in any Representative Capacity ("LM," and together with JM, the
"Stockholders"), on the other hand.
WHEREAS, concurrently herewith, Parent, Italy Merger Corp., a Delaware
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and Tele-
Communications, Inc., a Delaware corporation (the "Company"), are entering into
an Agreement and Plan of Restructuring and Merger (as amended or supplemented
from time to time, the "Merger Agreement"; capitalized terms used without
definition herein having the meanings ascribed thereto in the Merger Agreement);
WHEREAS, as of February 9, 1998, the Stockholders own and/or have the
power to vote, as applicable, the number and type of Shares (as defined below)
set forth in Schedule I hereto;
WHEREAS, the Board of Directors of the Company has, prior to the
execution of this Agreement, duly and validly approved and adopted the Merger
Agreement and approved this Agreement, and such approval and adoption have not
been withdrawn;
WHEREAS, approval of the Merger Agreement by the Company's
stockholders is a condition to the consummation of the Merger; and
WHEREAS, as a condition to its entering into the Merger Agreement,
Parent has required that each Stockholder agree, and each Stockholder has
agreed, to enter into this Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
Section 1. Agreement to Vote. (a) Provided that Parent has not
-----------------
breached or violated Section 4(b) hereof, each Stockholder hereby agrees to
attend the Stockholders Meeting of the Company (or any other meeting of
stockholders of the Company at which the matters contemplated by the Merger
Agreement or this Agreement are to be presented to a vote of stockholders of the
Company), in person or by proxy, and to vote (or cause to be voted) all Shares
and any other voting securities of the Company (including any such securities
acquired hereafter but excluding any Shares or other securities the Stockholder
has the right to acquire but has not acquired) that such Stockholder directly or
indirectly owns or has the right to vote or direct the voting (collectively, the
"Covered Shares"), for approval and adoption of the Merger Agreement, the Merger
and any related action reasonably required in furtherance thereof, such
<PAGE>
agreement to vote to apply also to any adjournment or adjournments or
postponement or postponements of the Stockholders Meeting of the Company (or any
such other meeting). Each Stockholder hereby further agrees that until the
Termination Date (as defined below), he or she shall, from time to time, in
connection with any consent solicitation relating to the Merger Agreement,
timely execute and deliver (or cause to be timely executed and delivered) a
written consent with respect to any Covered Shares in favor of the approval and
adoption of the Merger Agreement, the Merger and any action required in
furtherance thereof.
(b) From and after the date hereof until the Termination Date, each
Stockholder hereby agrees to vote (or cause to be voted) any Covered Shares
against any Takeover Proposal and any related action reasonably required in
furtherance thereof, at any meeting of stockholders of the Company (including
any adjournments or postponements thereof) called to consider and vote on any
Takeover Proposal. Each Stockholder further agrees that, until the Termination
Date, in connection with any consent solicitation relating to a Takeover
Proposal, such Stockholder will timely execute and deliver (or cause to be
timely executed and delivered) a written consent with respect to any Covered
Shares against any Takeover Proposal as contemplated by the immediately
preceding sentence. For purposes hereof, the term "Termination Date" shall mean
the first to occur of (a) the 9 month anniversary of the date of termination of
the Merger Agreement, (b) the date of consummation of the Merger and (c) the
date of any breach or violation of Section 4(b) by Parent; provided, however,
-------- -------
that in the event that the Merger Agreement is terminated after the Parent
Charter Amendment and the issuance of Parent Shares in the Merger has been
submitted to the vote of the stockholders of Parent at the Parent Stockholders
Meeting and not approved and adopted by the requisite holders of Parent Common
Shares at such meeting, or if the Merger Agreement is terminated as a result of
the failure of the Merger to be consummated because of the failure of the
condition in Section 8.1 (b) or Section 8.2(e) to be satisfied, the Termination
Date shall be the date of termination of the Merger Agreement.
(c) To the extent inconsistent with the foregoing provisions of this
Section 1, each Stockholder hereby revokes any and all previous proxies with
respect to such Stockholder's Covered Shares; provided, however, that the
-------- -------
foregoing shall not be deemed to affect the rights of the Magness Group (as
defined in the Stockholders Agreement (as defined below)) under that certain
Stockholders Agreement, dated as of February 9, 1998, by and among the Company,
the Stockholders and the members of the Magness Group parties thereto (the
"Stockholders Agreement"), it being agreed that JM shall assert his right under
such agreement to vote Covered Shares held by the Magness Group in accordance
with this Agreement.
(d) Subject to Section 5(b), each Stockholder agrees to, and to cause
its affiliates to, cooperate reasonably with Parent and the Company in
connection with the Merger Agreement and the consummation of the transactions
contemplated thereby.
(e) Nothing herein contained shall (i) restrict, limit or prohibit JM
from exercising (in his capacity as a director or officer) his fiduciary duties
to the stockholders of the Company under
2
<PAGE>
applicable Law, or (ii) require JM, in his capacity as an officer of the
Company, to take any action in contravention of, or omit to take any action
pursuant to, or otherwise take or refrain from taking any actions which are
inconsistent with, instructions or directions of the Board of Directors of the
Company undertaken in the exercise of its fiduciary duties, provided that
--------
nothing in this Section 1(e) shall relieve or be deemed to relieve JM from his
obligations under Sections 1 or 2 of this Agreement.
Section 2. Disposition of Shares. From and after the date hereof until
---------------------
the Termination Date, each Stockholder hereby agrees that such Stockholder will
not directly or indirectly sell, pledge, encumber, grant any proxy or enter into
any voting or similar agreement with respect to, transfer or otherwise dispose
of (collectively, "Transfer"), or agree or contract to Transfer, any Covered
Shares (or any interest therein) with respect to which a Stockholder directly or
indirectly controls the right to Transfer, other than in the case of JM, (i)
from the date hereof until the date of termination of the Merger Agreement, up
to an aggregate of 2,000,000 Shares, and (ii) from the date of termination of
the Merger Agreement to the Termination Date, up to an aggregate of an
additional 3,000,000 Shares.
Section 3. Securities Act Covenants and Representations. Each
--------------------------------------------
Stockholder hereby agrees and represents to Parent as follows:
(a) Such Stockholder has been advised that the offering, sale and
delivery of Parent Common Shares and Parent VP Tracking Shares pursuant to the
Merger will be registered under the Securities Act on a Registration Statement
on Form S-4. Such Stockholder has also been advised, however, that to the extent
such Stockholder is considered an "affiliate" of the Company at the time the
Merger Agreement is submitted for a vote of the stockholders of the Company, any
public offering or sale by such Stockholder of any Parent Common Shares or
Parent VP Tracking Shares received by such Stockholder in the Merger will, under
current law, require either (i) the further registration under the Securities
Act of any Parent Common Shares or Parent VP Tracking Shares to be sold by such
Stockholder, (ii) compliance with Rule 145 promulgated by the SEC under the
Securities Act or (iii) the availability of another exemption from such
registration under the Securities Act. Such Stockholder agrees to execute and
deliver an Affiliate Letter as contemplated by the Merger Agreement.
(b) Such Stockholder has read this Agreement and the Merger Agreement
and has discussed their requirements and other applicable limitations upon such
Stockholder's ability to sell, transfer or otherwise dispose of Parent Common
Shares or Parent VP Tracking Shares, to the extent such Stockholder believed
necessary, with such Stockholder's counsel or counsel for the Company.
(c) Such Stockholder also understands that stop transfer instructions
will be given to Parent's transfer agents with respect to Parent Common Shares
and Parent VP Tracking Shares and that a legend will be placed on the
certificates for the Parent Common Shares and Parent VP Tracking Shares issued
to such Stockholder, or any substitutions therefor, to the extent such
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Stockholder is considered an "affiliate" of the Company at the time the Merger
Agreement is submitted for a vote of the stockholders of the Company.
Section 4. Other Covenants and Agreements.
------------------------------
(a) Further Assurances. Each party shall execute and deliver such
------------------
additional instruments and other documents and shall take such further actions
as may be reasonably necessary or appropriate to effectuate, carry out and
comply with all of their obligations under this Agreement. Without limiting the
generality of the foregoing, none of the parties hereto shall enter into any
agreement or arrangement (or alter, amend or terminate any existing agreement or
arrangement) or take any other action (or fail to take any other action) if such
action (or failure) would materially impair the ability of any party to
effectuate, carry out or comply with all the terms of this Agreement. Parent
agrees to cooperate with each Stockholder in connection with any filings
required to be made by such Stockholder in connection with the Merger and the
transactions contemplated thereby.
(b) Parent shall not require, nor shall any provision of this
Agreement be deemed to require, any Stockholder to agree in his or her capacity
as a stockholder, and shall not agree on behalf of any Stockholder in such
Stockholder's capacity as a stockholder, to the inclusion in any Authorization
required in connection with the Merger or the other transactions contemplated by
the Merger Agreement of any restriction on any Stockholder's exercise and
enjoyment in his and her capacity as a stockholder of full rights of ownership
of Parent Shares to be acquired in the Merger (including, without limitation,
the voting rights related thereto); provided, however that the foregoing shall
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not limit or reduce any of the obligations of the Company pursuant to the Merger
Agreement or otherwise alter the rights and obligations of the parties pursuant
to the Merger Agreement or apply to any matters set forth in the Merger
Agreement relating to the Company or any of its Subsidiaries or their respective
assets, businesses or properties.
Section 5. Representations and Warranties of Parent. Parent
----------------------------------------
represents and warrants, severally and not jointly, to each Stockholder as
follows: Each of this Agreement and the Merger Agreement has been approved by
the Board of Directors of Parent, and the Merger Agreement has been approved by
the Board of Directors of Merger Sub and by Parent as the sole stockholder of
Merger Sub, in each case representing all necessary corporate action on the part
of Parent and Merger Sub, except for the approval of Parent's stockholders
contemplated by the Merger Agreement. Each of this Agreement and the Merger
Agreement has been duly executed and delivered by a duly authorized officer of
Parent and, in the case of the Merger Agreement, Merger Sub. Each of this
Agreement and the Merger Agreement constitutes a valid and binding agreement of
Parent and, in the case of the Merger Agreement, Merger Sub, enforceable against
Parent and, in the case of the Merger Agreement, Merger Sub.
Section 6. Representations and Warranties of the Stockholders.
--------------------------------------------------
(a) Each Stockholder represents and warrants to Parent as follows: Such
Stockholder has the power and authority to execute and deliver this Agreement.
This Agreement has been duly executed and
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delivered by such Stockholder. This Agreement constitutes the valid and binding
agreement of such Stockholder. Except as provided in Exhibit A, such Stockholder
has the full power and authority to vote, or execute a consent, with respect to,
all Covered Shares as contemplated hereby. The securities of the Company listed
next to the name of such Stockholder on Part A of Schedule I hereto are the only
securities of the Company owned by such Stockholder and over which such
Stockholder has the power to vote (or direct the voting), the securities of the
Company listed next to the name of such Stockholder on Part B of Schedule I
hereto are the only securities of the Company owned by such Stockholder over
which such Stockholder does not have the power to vote (or direct the voting),
and the securities of the Company listed next to the name of such Stockholder on
Part C of Schedule I hereto are the only securities of the Company not owned by
Stockholder but over which such Stockholder has the power to vote (collectively,
the "Shares").
(b) Except as provided in Exhibit A, each Stockholder is the lawful
owner of the Shares listed on Parts A and B of Schedule I as owned by it, free
and clear of all liens, charges, encumbrances and commitments of every kind,
other than this Agreement, and each Stockholder has the power to vote (including
by an irrevocable power to vote or execute a consent) the Shares listed on Parts
A and C of Schedule I. The execution and delivery by such Stockholder of this
Agreement does not violate or breach any law, contract, instrument, agreement or
arrangement to which such Stockholder is a party or by which such Stockholder is
bound. Since February 9, 1998 through the date hereof, the Stockholders' have
not sold more than 500,000 Shares in the aggregate.
Section 7. Effectiveness. It is a condition precedent to the
-------------
effectiveness of this Agreement that the Merger Agreement shall have been duly
adopted and approved and executed and delivered by the parties thereto, but the
termination of the Merger Agreement shall not impair the effectiveness of this
Agreement except to the extent expressly set forth herein. No action by the
Company pursuant to Section 7.2 of the Merger Agreement (or any other provision
of the Merger Agreement) other than actions that give rise to a Termination Date
shall relieve or be deemed to relieve the Stockholders from their obligations
under this Agreement.
Section 8. Miscellaneous.
-------------
(a) Notices, Etc. All notices, requests, demands or other
------------
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered by
telecopy and confirmed by return telecopy, or one day after being mailed by
courier service that guarantees overnight delivery, in each case to the
applicable addresses set forth below:
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If to Parent:
AT&T Corp.
295 North Maple Avenue
Basking Ridge, New Jersey 07920
Attn: Vice President-Law
and Corporate Secretary
Telecopy: (908) 221-6618
with a copy to:
Richard D. Katcher, Esq.
Steven A. Rosenblum, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
If to the Stockholders:
John C. Malone
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
with a copy to:
Baker & Botts
599 Lexington Avenue
New York, NY 10022
Attn: Frederick H. McGrath
Telecopy: (212) 705-5125
or to such other address as such party shall have designated by notice so given
to each other party.
(b) Amendments, Waivers, Etc. This Agreement may not be amended,
------------------------
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by Parent and each Stockholder.
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(c) Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of and be enforceable by the parties and their
respective successors and assigns, including without limitation in the case of
Parent any corporate successor by merger or otherwise, and in the case of a
Stockholder any trustee, executor, heir, legatee or personal representative
succeeding to the ownership of (or power to vote) such Stockholder's Covered
Shares or other securities subject to this Agreement (including as a result of
the death, disability or incapacity of a Stockholder).
(d) Entire Agreement. This Agreement (together with the Merger
----------------
Agreement) embodies the entire agreement and understanding among the parties
relating to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter. There are no representations,
warranties or covenants by the parties hereto relating to such subject matter
other than those expressly set forth in this Agreement and the Merger Agreement.
(e) Severability. If any term of this Agreement or the application
------------
thereof to any party or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such term to
the other parties or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that in
--------
such event the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
parties' intentions hereunder.
(f) Specific Performance. The parties acknowledge that money damages
--------------------
are not an adequate remedy for violations of this Agreement and that any party
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
(g) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
(h) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of his or her right to exercise any such or other right, power or remedy or to
demand such compliance.
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(i) No Third Party Beneficiaries; Severability. This Agreement is not
------------------------------------------
intended to be for the benefit of and shall not be enforceable by any person or
entity who or which is not a party hereto. The obligations of each Stockholder
hereunder are several and not joint and neither Stockholder shall be liable for
the actions of the other Stockholder.
(j) Jurisdiction. Each party hereby irrevocably submits to the
------------
exclusive jurisdiction of the Court of Chancery in the State of Delaware or the
United States District Court for the Southern District of New York or any court
of the State of New York located in the City of New York in any action, suit or
proceeding arising in connection with this Agreement, and agrees that any such
action, suit or proceeding shall be brought only in such court (and waives any
objection based on forum non conveniens or any other objection to venue
----- --- ----------
therein); provided, however , that such consent to jurisdiction is solely for
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the purpose referred to in this paragraph (j) and shall not be deemed to be a
general submission to the jurisdiction of said Courts or in the States of
Delaware or New York other than for such purposes. Each party hereto hereby
waives any right to a trial by jury in connection with any such action, suit or
proceeding.
(k) Governing Law. This Agreement and all disputes hereunder shall be
-------------
governed by and construed and enforced in accordance with the General
Corporation Law of the State of Delaware to the fullest extent possible.
(l) Name, Captions, Gender. The name assigned this Agreement and the
----------------------
section captions used herein are for convenience of reference only and shall not
affect the interpretation or construction hereof. Whenever the context may
require, any pronoun used herein shall include the corresponding masculine,
feminine or neuter forms.
(m) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
(n) Expenses. Parent and each Stockholder shall bear its, his or her
--------
own expenses incurred in connection with this Agreement and the transactions
contemplated hereby.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
AT&T CORP.
By:_____________________________
Name:
Title:
________________________________
John C. Malone
________________________________
Leslie Malone
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