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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
TCI SATELLITE ENTERTAINMENT, INC.
(Name of Issuer)
Series A Common Stock, $1.00 par value
Series B Common Stock, $1.00 par value
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(Title of Classes of Securities)
Series A Common Stock: 872298104
Series B Common Stock: 872298203
---------------------------------
(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)
MAY 28, 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).
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Exhibit Index is on Page 6
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Cusip No. - Series A Common Stock 872298104
Cusip No. - Series B Common Stock 872298203
<TABLE>
<S> <C>
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(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons
Dr. John C. Malone
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(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
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(3) SEC Use Only
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(4) Source of Funds
PF, AF
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
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(6) Citizenship or Place of Organization
U.S.
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Number of (7) Sole Voting Power 1,667,297 Shares of Series A*
2,528,708 Shares of Series B**
Shares Bene-
-------------------------------------------------------------------------------------
ficially (8) Shared Voting Power 0 Shares
Owned by
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Each Report- (9) Sole Dispositive Power 1,667,297 Shares of Series A*
2,528,708 Shares of Series B**
ing Person
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With (10) Shared Dispositive Power 0 Shares
- ---------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,667,297 Shares of Series A*
2,528,708 Shares of Series B**
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] **
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(13) Percent of Class Represented by Amount in Row (11)
Series A Common Stock 2.9%
Series B Common Stock 29.9%
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(14) Type of Reporting Person
IN
</TABLE>
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*Including the 1,467,203 shares beneficially owned by Dr. Malone, together with
the additional 200,000 shares Dr. Malone would acquire upon the exercise of
stock options granted in tandem with stock appreciation rights, but does not
include shares of Series A Common Stock issuable upon conversion of shares of
Series B Common Stock. (See Items 3 and 5)
**Includes 117,300 shares of Series
B Common Stock beneficially owned by Dr. Malone's spouse, to which Dr. Malone
disclaims any beneficial ownership thereof. (See Item 5)
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<PAGE> 3
Cusip No. - Series A Common Stock 872298104
Cusip No. - Series B Common Stock 872298203
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Statement of
DR. JOHN C. MALONE
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
TCI SATELLITE ENTERTAINMENT, INC.
(Commission File No. 0-21317)
ITEM 1. Security and Issuer
Dr. John C. Malone hereby amends and supplements his Statement
on Schedule 13D (the "Statement"), with respect to the Series A Common Stock,
par value $1.00 per share (the "Series A Stock"), and the Series B Common
Stock, par value $1.00 per share (the "Series B Stock" and together with the
Series A Stock, the "Issuer Common Stock"), of TCI Satellite Entertainment,
Inc., a Delaware corporation (the "Issuer"). The principal executive offices
of the Issuer are located at 8085 South Chester, Suite 300, Englewood, Colorado
80112. Unless otherwise indicated, capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Statement.
Dr. Malone is filing this Amendment No. 2 to the Statement to
report (a) a correction in the number of shares of the Issuer beneficially
owned by Dr. Malone, and (b) the final terms of the loan used by Dr. Malone to
acquire additional shares of the Issuer in March 1997.
ITEM 3. Source and Amount of Funds or Other Consideration
Item 3 of the Statement is hereby amended and supplemented by
adding the following information thereto:
On March 4, 1997, Dr. Malone purchased through a broker
625,000 shares of Series A Stock at a purchase price of $8 per share for a
total purchase price of $5,000,000. In addition, on March 4, 1997, Dr. Malone
purchased through a broker 100,000 shares of Series A Stock at a purchase price
of $7.875 per share for a total purchase price of $787,500. On March 5, 1997,
Dr. Malone purchased through a broker 625,000 shares of Series A Stock at a
purchase price of $8 per share for a total purchase price of $5,000,000, and
100,000 shares of Series A Stock at a purchase price of $7.875 per share for a
total purchase price of $787,500.
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Cusip No. - Series A Common Stock 872298104
Cusip No. - Series B Common Stock 872298203
The source of the consideration used to purchase the Series A Stock
was an advance from TCI Technology Ventures, Inc., a Delaware corporation and a
wholly owned subsidiary of Tele-Communications, Inc., a Delaware corporation.
That advance has been reflected as a loan as evidenced by that certain
Promissory Note dated as of March 4 & 5, 1997 (the "Note"), executed on May 28,
1997, by Dr. Malone as maker for TCI Technology Ventures, Inc. as holder. The
Note is attached to this Amendment No. 2 to the Statement as Exhibit 7(A) and
is incorporated herein by this reference.
The aggregate principal amount of the loan is $11,601,259.70. The
loan bears interest at the rate of one month LIBOR, plus 1%, per annum
compounded annually. Interest is due and payable on March 1 of each year,
commencing March 1, 1998. The outstanding principal amount and any unpaid
interest on the Note is due and payable on March 31, 1999.
Dr. Malone has pledged as security for the Note 193,400 shares of
Class B 6% Cumulative Redeemable Exchangeable Junior Preferred Stock of
Tele-Communications, Inc. (the "Class B Preferred Stock"). The terms of the
pledge of the Class B Preferred Stock are set forth in a Stock Pledge dated as
of March 4, 1997, executed by Dr. Malone and TCI Technology Ventures, Inc. on
May 28, 1997 and May 27, 1997, respectively. The description of the loan
contained herein is qualified in its entirety by reference to the text of the
Note, and the description of the pledge contained herein is qualified in its
entirety by reference to the text of the Stock Pledge.
ITEM 5. Interest in Securities of the Issuer
No change to Item 5 of the Statement, except for the following change
in Item 5(a):
Recently, The Bank of New York, as Stock Transfer Agent and Registrar
of the Issuer, has informed Dr. Malone that it erroneously issued to Dr. Malone
4,500 shares of Series B Stock. After being notified of the erroneous
issuance, Dr. Malone returned such shares for cancellation. After correcting
for such error, Dr. Malone beneficially owns 2,528,708 shares of the Series B
Stock. Of the 2,528,708 shares beneficially owned, 2,411,408 shares are owned
of record and the remaining 117,300 shares are owned of record by Dr. Malone's
spouse, to which Dr. Malone disclaims beneficial ownership. All other
information in Item 5(a) remains correct, except Dr. Malone beneficially owns
1,667,297 shares of Series A Stock, because in March 1997 he received 94
additional shares thereof pursuant to the Issuer's Employee Stock Purchase
Plan.
ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer
Item 6 is hereby amended by adding the following statement therein:
See Item 3.
ITEM 7. Material to be Filed as Exhibits
A. Promissory Note dated as of March 4 & 5, 1997, by Dr. Malone
as maker for TCI Technology Ventures, Inc. as holder
(executed on May 28, 1997).
B. Stock Pledge dated as of March 4, 1997, between Dr. Malone and
TCI Technology Ventures, Inc. (executed on May 28, 1997 and
May 27, 1997, respectively).
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Cusip No. - Series A Common Stock 872298104
Cusip No. - Series B Common Stock 872298203
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Statement is true,
complete and correct.
May 28, 1997 /s/ Dr. John C. Malone
--------------------------------
Dr. John C. Malone
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Cusip No. - Series A Common Stock 872298104
Cusip No. - Series B Common Stock 872298203
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT PAGE
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<S> <C> <C>
99.7.a Promissory Note dated as of March 4 & 5, 1997, by Dr. John C. Malone as 7
maker for TCI Technology Ventures, Inc. as holder (executed on May 28,
1997).
99.7.b Stock Pledge dated as of March 4, 1997, between Dr. John C. Malone and TCI 8
Technology Ventures, Inc. (executed on May 28, 1997 and May 27, 1997,
respectively).
</TABLE>
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EXHIBIT 99.7.a
PROMISSORY NOTE
$11,601,259.70 Englewood, Colorado
March 4 and 5, 1997
FOR VALUE RECEIVED, the undersigned (Maker) promises to pay TCI
Technology Ventures, Inc., or order (Note Holder), the principal sums of Five
Million Seven Hundred Eighty-Seven Thousand Five Hundred Four and 85/100s
Dollars ($5,787,504.85), with interest on such unpaid principal balance form
March 4, 1997 until paid, and Five Million Eight Hundred Thirteen Thousand
Seven Hundred Fifty-Four and 85/100s Dollars ($5,813,754.85), with interest on
such unpaid principal balance from March 5, 1997 until paid. Interest shall be
due and payable on March 1 of each year commencing March 1, 1998 at the 1 month
LIBOR rate plus 100 basis points per annum compounded annually. All outstanding
principal and unpaid interest shall be due and payable in full on March 31,
1999, at 5619 DTC Parkway, Englewood, Colorado, or such other place as the Note
Holder may designate.
Payments received for application to this Note shall be applied first
to the payment of accrued interest specified above, and the balance applied in
reduction of the principal amount hereof.
If payment required by this Note is not paid when due, the entire
principal amount outstanding and accrued interest thereon may be accelerated at
the option of Note Holder. The Note Holder shall be entitled to collect all
reasonable costs and expenses of collection and/or suit, including, but not
limited to reasonable attorneys' fees.
Maker may prepay the principal amount outstanding under this Note, in
whole or in part, at the end of each month without penalty.
Any notice to Maker provided for in this Note shall be in writing and
shall be given and be effective upon (1) delivery to Maker or (2) mailing
such notice by certified mail, return receipt requested, addressed to Maker at
the Maker's address stated below, or to such other address as Maker may
designate by notice to the Note Holder. Any notice to the Note Holder shall be
in writing and shall be given and be effective upon (1) delivery to the Note
Holder or (2) mailing such notice by certified mail, return receipt requested,
to the Note Holder at the address stated in the first paragraph of this Note,
or to such other address as the Note Holder may designate by notice to Maker.
The indebtedness evidenced by this Note is secured by a Stock Pledge of
even date herewith, and until released such Stock Pledge contains additional
rights of the Note Holder. Such rights may cause acceleration of the
indebtedness evidenced by this Note. Reference is made to the Stock Pledge for
such additional terms.
Maker's Address: 5619 DTC Parkway
Englewood, Colorado
/s/ JOHN C. MALONE
----------------------------------
John C. Malone
Executed on this 28th of May, 1997
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EXHIBIT 99.7.b
STOCK PLEDGE
This Stock Pledge ("Agreement") is made as of March 4, 1997, between
John C. Malone ("Pledgor"), whose mailing address is 5619 DTC Parkway,
Englewood, Colorado, and TCI Technology Ventures, Inc. ("Secured Party"),
whose mailing address is 5619 DTC Parkway, Englewood, Colorado.
1. Collateral. Pledgor, for consideration, hereby grants to
Secured Party a security interest in the following property, delivered to
Secured Party, and any and all additions and substitutions thereto or therefor
from time to time delivered or agreed to be delivered by Pledgor to Secured
Party, and the proceeds of and to any of the foregoing, accompanied by stock
powers duly executed in blank in proper form for transfer (hereinafter the
"Collateral"): 193,400 shares of Class B 6% Cumulative Redeemable Exchangeable
Junior Preferred Stock of Tele-Communications, Inc., a Delaware corporation,
issued in the name of Pledgor (hereinafter the "Pledged Stock").
2. Obligations Secured. This Agreement shall secure the following
obligations ("Obligations"):
2.1 The payment of all principal and interest of loans in the
aggregate amount of $11,601,259.70 ("Loan"), made by Secured Party to Pledgor
pursuant to that certain promissory note ("Note") of even date herewith
executed and delivered by Pledgor to Secured Party, and
2.2 Performance by Pledgor of the terms herein set forth.
3. Warranties and Covenants of Pledgor.
3.1 Except for the security interest granted hereby,
Pledgor is the owner of the Collateral, free from any liens and any security
interests and Pledgor will defend the Collateral against all claims and demands
of all persons at any time claiming the same or any interest therein.
3.2 Unless and until Secured Party expressly agrees to
another course of action, Secured Party shall also have a security interest in
all securities and other property, rights or interests of any description at
any time issued as dividends or as the result of any reclassification, split-up
or other corporate reorganization with respect to the Collateral. Pledgor shall
hold in trust for and deliver promptly to Secured Party in the exact form
received, all such securities or other property which comes into the possession,
custody or control of Pledgor.
3.4 Pledgor will pay all taxes and assessments of every
nature which may be levied or assessed against the Collateral.
3.5 Pledgor will pay the principal of the Loan and all
accrued interest thereon in accordance with the terms of the Note.
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4. Voting Rights and Dividends. During the term of this Agreement, and
so long as Pledgor is not in default under this Agreement, Pledgor shall have
the right to vote the Pledged Stock on all corporate questions with respect to
which the Pledged Stock has voting rights. If Pledgor defaults in the
performance of his obligation under this Agreement, then Secured Party shall
have the right to demand that all dividends with respect to the Pledged Stock
declared and issued by TCI shall be paid directly to Secured Party and Secured
Party shall have the right to exercise all voting rights with respect to the
Pledged Stock.
5. Secured Party's Rights. Secured Party shall be under no duty to
exercise or to withhold the exercise of any of the rights, powers, privileges
and options expressly or implicitly granted to Secured Party in this Agreement,
and Secured Party shall not be responsible for any failure to exercise such
rights, nor for its delay in so doing. Secured Party shall be deemed to have
exercised reasonable care as custodian of the Collateral if it takes such
action to protect and preserve the Collateral as Pledgor shall request, but the
failure to honor any such request shall not be deemed to be a failure by
Secured Party to exercise reasonable care.
6. Events of Default. Pledgor will be in default under this Agreement
upon any default in the payment or material default in the performance of the
Obligations.
7. Rights Upon Default. Upon default and at any time thereafter,
Secured Party may declare, without notice of default or acceleration, all
Obligations secured hereby immediately due and payable, and Secured Party shall
have all the rights and remedies of a secured party under Article 9 of the
Colorado Uniform Commercial Code ("UCC") or other applicable law and all the
rights provided herein and in the Note, all of which rights and remedies shall,
to the full extent permitted by law, be cumulative. Expenses of retaking,
holding, preparing for a foreclosure sale, selling or the like shall include
Secured Party's reasonable attorney fees and legal expenses, and the same,
together with all advances made by Secured Party on behalf of Pledgor, shall be
part of the Obligations secured hereby.
8. Power of Attorney. Pledgor hereby irrevocably appoints Secured
Party as debtor's attorney-in-fact to execute or endorse, in the event of a
default, any instrument, certificate, proxy, receipt or other document to
effectuate a transfer of the Pledged Stock, to vote the Pledged Stock at any
shareholder meeting or to obtain dividends declared or issued on the Pledged
Stock. This power of attorney shall be deemed coupled with an interest.
9. Restricted Stock. Pledgor acknowledges that the Securities Act of
1933, as amended, and other state and federal laws prohibit or restrict the
customary manner of sale or distribution of the Collateral. Therefore, upon
default, Secured Party may sell such Collateral privately or in any other
manner deemed advisable by Secured Party at such price or prices as Secured
Party determines in its sole discretion. Pledgor recognizes that such
prohibition or restriction may cause the Collateral to have less value than it
otherwise would have and that, consequently, such sale or disposition by
Secured Party
9
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may result in a lower sales price than if the sale were otherwise
held. Secured Party shall have no obligation to register the
Pledged Stock for sale and it may be sold subject to restrictions on
transfer arising under federal and state securities laws, rules and
regulations.
10. No Waiver. No waiver by Secured Party of any default shall
operate as a waiver of any other default or of the same default on a
future occasion. The taking of the security provided in this
Agreement shall not waive or impair any other security that Secured
Party may have or hereafter acquire for the payment of the
Obligations, nor shall the taking of any such additional security
waive or impair this Agreement; but Secured Party may resort to any
security it may have in the order it may deem proper.
11. Other Liens. At its option, but without obligation to
Pledgor, Secured Party may discharge taxes, liens or security
interest or other encumbrances at any time levied or placed on the
Collateral. Pledgor agrees to reimburse Secured Party on demand for
payment made or any expense incurred by Secured Party pursuant to the
foregoing authorization.
12. Successors. All rights of Secured Party hereunder shall
inure to the benefit of its legal representatives, successors and
assigns; and all promises and duties of Pledgor shall bind his legal
representatives, heirs, successors and assigns.
13. Release. Except as otherwise provided by the UC, Pledgor
releases Secured Party from all claims for loss or damage caused by
any act or omission on the part of Secured Party, except gross
negligence or willful misconduct.
14. Severance. Should any provision of this Agreement be deemed
unlawful or unenforceable, such provision shall be deemed several and
apart from all other provisions of this Agreement and all remaining
provisions of this Agreement shall be fully enforceable.
15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado.
DATED as of the 4th day of March, 1997.
PLEDGOR: SECURED PARTY:
TCI TECHNOLOGY VENTURES, INC.
By: /s/ JOHN C. MALONE By: /s/ LARRY ROMRELL
--------------------------- ---------------------------
John C. Malone Larry Romrell
Executed on this 28th Executed on this 27th
of May, 1997 of May, 1997
10
