TELE COMMUNICATIONS INTERNATIONAL INC, DEF 14A, 1998-06-01

TELE COMMUNICATIONS INTERNATIONAL INC
DEF 14A, 1998-06-01
TELEVISION BROADCASTING STATIONS

Previous: AMERICAN AADVANTAGE MILEAGE FUNDS, 497, 1998-06-01

Next: CULLIGAN WATER TECHNOLOGIES INC, 10-K/A, 1998-06-01

<PAGE>

===============================================================================

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

TELE-COMMUNICATIONS INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

-------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

-------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

-------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

-------------------------------------------------------------------------

(5) Total fee paid:

-------------------------------------------------------------------------

[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

-------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement No.:

-------------------------------------------------------------------------

(3) Filing Party:

-------------------------------------------------------------------------

(4) Date Filed:

-------------------------------------------------------------------------

Notes:

<PAGE>

TELE-COMMUNICATIONS INTERNATIONAL, INC.
TERRACE TOWER II
5619 DTC PARKWAY
ENGLEWOOD, COLORADO 80111
(303) 267-5500

June 1, 1998

Dear Stockholder:

You are cordially invited to attend the annual meeting of stockholders of
Tele-Communications International, Inc. (the "Company"), which will be held at
the Company's corporate offices, located at 5619 DTC Parkway, Englewood,
Colorado, on July 1, 1998, starting at 10:00 a.m. local time. A notice of the
annual meeting, a proxy card and a proxy statement containing important
information about the matters to be acted upon at the annual meeting and the
Company's 1997 Annual Report to Stockholders are enclosed.

You will be asked at the annual meeting to consider and vote upon: (i) the
election of three directors of the Company to hold office until the annual
meeting of stockholders to be held in the year 2001 and until their successors
are elected and qualified; and (ii) such other business as may properly come
before the annual meeting. The Board of Directors recommends that the
stockholders vote in favor of the Election of Directors Proposal presented in
the enclosed proxy statement.

Whether or not you are personally able to attend the annual meeting, please
complete, sign and date the enclosed proxy card and return it in the enclosed
prepaid envelope as soon as possible. This action will not limit your right to
vote in person if you wish to attend the annual meeting and vote personally.

Sincerely yours,

/s/ John C. Malone

John C. Malone
Chairman of the Board
<PAGE>

TELE-COMMUNICATIONS INTERNATIONAL, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 1, 1998

NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (including
any adjournment or postponement thereof, the "Annual Meeting") of Tele-
Communications International, Inc., a Delaware corporation (the "Company"),
will be held at the Company's corporate offices located at 5619 DTC Parkway,
Englewood, Colorado, starting at 10:00 a.m. local time, on July 1, 1998, for
the following purposes:

1. To elect three directors of the Company to hold office until the 2001
annual meeting of stockholders and until their successors are elected and
qualified (the "Election of Directors Proposal").

2. To transact such other business as may properly come before the Annual
Meeting.

Holders of record of: (i) Tele-Communications International, Inc. Series A
Common Stock (the "Series A Common Stock"), and (ii) Tele-Communications
International, Inc. Series B Common Stock (the "Series B Common Stock") at the
close of business on May 14, 1998, the record date for the Annual Meeting,
will be entitled to notice of, and to vote at, the Annual Meeting. Holders of
record of the Series A Common Stock and Series B Common Stock at the close of
business on the record date will be entitled to vote together as a single
class on the Election of Directors Proposal. Each share of Series A Common
Stock is entitled to one vote per share and each share of Series B Common
Stock is entitled to 10 votes per share on each matter on which holders of
shares of each such series are entitled to vote at the Annual Meeting.

To ensure that your interests will be represented at the Annual Meeting,
regardless of whether you plan to attend in person, please complete, date and
sign the enclosed proxy card and return it promptly in the enclosed return
envelope, which requires no postage if mailed in the United States. This
action will not limit your right to vote in person if you wish to attend the
Annual Meeting and vote personally.

This Notice of Annual Meeting and the accompanying Proxy Statement and proxy
card are first being mailed to the stockholders of the Company on or about
June 1, 1998.

By Order of the Board of Directors,

/s/ Stephen M. Brett

Stephen M. Brett
Secretary

Englewood, Colorado
June 1, 1998

PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY, WHETHER OR NOT YOU
INTEND TO BE PRESENT AT THE ANNUAL MEETING.

<PAGE>

TELE-COMMUNICATIONS INTERNATIONAL, INC.
TERRACE TOWER II
5619 DTC PARKWAY
ENGLEWOOD, COLORADO 80111

PROXY STATEMENT

FOR ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of Tele-Communications International, Inc., a
Delaware corporation (the "Company"), of proxies for use at the annual meeting
of the stockholders of the Company, or at any adjournment or postponement
thereof (the "Annual Meeting"), for the purposes set forth in the accompanying
Notice of Annual Meeting. Proxies are being solicited from the holders of the
Tele-Communications International, Inc. Series A Common Stock (the "Series A
Stock") and the Tele-Communications International, Inc. Series B Common Stock
(the "Series B Stock"). The aforementioned securities are collectively
referred to in this Proxy Statement, from time to time, as the "Common Stock".

THE ANNUAL MEETING

TIME AND PLACE; PURPOSES

The Annual Meeting will be held at the Company's corporate offices located
at 5619 DTC Parkway, Englewood, Colorado, on July 1, 1998, starting at 10:00
a.m. local time. At the Annual Meeting, the stockholders of the Company will
be asked to consider and vote upon proposals: (i) to elect three directors of
the Company to hold office until the annual meeting of stockholders to be held
in the year 2001 and until their successors are elected and qualified (the
"Election of Directors Proposal"); and (ii) to transact such other business as
may properly come before the Annual Meeting.

This Proxy Statement and the accompanying Notice of Annual Meeting and proxy
card are first being mailed to the stockholders of the Company on or about
June 1, 1998.

VOTING RIGHTS; VOTES REQUIRED FOR APPROVAL

The Board of Directors has fixed the close of business on May 14, 1998 (the
"Record Date"), as the date for the determination of holders of the Common
Stock entitled to notice of and to vote at the Annual Meeting. Only holders of
record of shares of the Common Stock at the close of business on the Record
Date are entitled to notice of and to vote at the Annual Meeting.

Holders of record of the Common Stock at the close of business on the Record
Date will be entitled to vote together as a single class on the Election of
Directors Proposal. At the close of business on the Record Date, there were:
(i) 103,615,680 shares of Series A Stock outstanding and entitled to vote at
the Annual Meeting; and (ii) 11,700,000 shares of Series B Stock outstanding
and entitled to vote at the Annual Meeting. Each holder of record as of the
Record Date of: (i) Series A Stock is entitled to cast one vote per share; and
(ii) Series B Stock is entitled to cast 10 votes per share, on each matter on
which holders of shares of such series are entitled to vote at the Annual
Meeting.

The presence, in person or by proxy, of the holders of a majority of the
combined voting power of the outstanding shares of the Common Stock entitled
to vote is necessary to constitute a quorum at the Annual Meeting. To be
elected to the Board of Directors pursuant to the Election of Directors
Proposal, a nominee must be approved by a plurality of the votes cast with
respect to the shares of the Common Stock represented in person or by proxy
and entitled to vote at the Annual Meeting, voting as a single class.

1
<PAGE>

As of the Record Date, a wholly-owned subsidiary of Tele-Communications,
Inc., a Delaware corporation ("TCI"), beneficially owned and had sole voting
and investment power over 86,250,000 shares of Series A Stock and all of the
11,700,000 outstanding shares of Series B Stock. Such stock ownership by TCI
represents 85% of the outstanding shares of Common Stock and 92% of the
combined voting power of the Common Stock outstanding at that date. Because
TCI intends to vote all of its shares of Common Stock in favor of each of the
three nominees named in the Election of Directors Proposal below, the presence
of a quorum and the election of all three nominees as directors is assured.

PROXIES

All shares of the Common Stock represented by properly executed proxies
received prior to or at the Annual Meeting, and not revoked, will be voted in
accordance with the instructions indicated in such proxies. If no instructions
are indicated, such proxies will be voted FOR the election of each of the
nominees named in the Election of Directors Proposal. So far as the Company's
Board of Directors is aware, the Election of Directors Proposal is the only
matter to be acted upon at the Annual Meeting. As to any other matter which
may properly come before the Annual Meeting, the persons named in the
accompanying proxy card will vote thereon in accordance with their best
judgment. A properly executed proxy marked "ABSTAIN", although counted for
purposes of determining whether there is a quorum and for purposes of
determining the aggregate voting power and number of shares represented and
entitled to vote at the Annual Meeting, will not be voted and, therefore,
except in the case of the Election of Directors Proposal, will have the same
effect as a vote cast against the matter to which such instruction is
indicated. Shares represented by "broker non-votes" (i.e., shares held by
brokers or nominees which are represented at the Annual Meeting but with
respect to which the broker or nominee is not empowered to vote on a
particular proposal) will also be counted for purposes of determining whether
there is a quorum at the Annual Meeting but will be deemed shares not entitled
to vote and will not be included for purposes of determining the aggregate
voting power and number of shares represented and entitled to vote on a
particular matter.

A stockholder may revoke his or her proxy at any time prior to its use by
delivering to the Secretary of the Company a signed notice of revocation or a
later dated signed proxy or by attending the Annual Meeting and voting in
person. Attendance at the Annual Meeting will not in itself constitute the
revocation of a proxy.

The cost of solicitation of proxies will be paid by the Company. In addition
to solicitation by mail, officers and regular employees of the Company may
solicit proxies by telephone, telegram, in person or by other means. Such
persons will receive no additional compensation for such services. Brokerage
houses, nominees, fiduciaries and other custodians will be requested to
forward soliciting material to the beneficial owners of shares held of record
by them and will be reimbursed for their reasonable out-of-pocket expenses in
connection therewith.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

On December 31, 1997, TCI beneficially owned, through its wholly-owned
subsidiary TCI Ventures Group, LLC ("Ventures LLC"), and had sole voting and
investment power over 86,250,000 shares of Series A Stock and all of the
11,700,000 outstanding shares of Series B Stock, which represented 85% of the
outstanding shares of Common Stock, 83% of the outstanding shares of Series A
Stock, and 92% of the combined voting power of the Common Stock outstanding at
that date. TCI's executive offices are located at 5619 DTC Parkway, Englewood,
Colorado 80111. TCI is the only person known to the Company that beneficially
owns 5% or more of either series of Common Stock.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information with respect to the beneficial
ownership of shares of the Series A Stock. In addition, the table sets forth
information with respect to the beneficial ownership of shares of

2
<PAGE>

the following securities of TCI: (i) Tele-Communications, Inc. Series A TCI
Group Common Stock, par value $1.00 per share (the "Series A TCI Group
Stock"); (ii) Tele-Communications, Inc. Series B TCI Group Common Stock, par
value $1.00 per share (the "Series B TCI Group Stock" and together with the
Series A TCI Group Stock, the "TCI Group Common Stock"); (iii) Tele-
Communications, Inc. Series A Liberty Media Group Common Stock, par value
$1.00 per share (the "Series A Liberty Group Stock"); (iv) Tele-
Communications, Inc. Series B Liberty Media Group Common Stock, par value
$1.00 per share (the "Series B Liberty Group Stock" and together with the
Series A Liberty Group Stock, the "Liberty Media Group Common Stock"); (v)
Tele-Communications, Inc. Series A TCI Ventures Group Common Stock, par value
$1.00 per share (the "Series A Ventures Group Stock"); (vi) Tele-
Communications, Inc. Series B TCI Ventures Group Common Stock, par value $1.00
per share (the "Series B Ventures Group Stock" and together with the Series A
Ventures Group Stock, the "Ventures Group Common Stock"); (vii) Tele-
Communications, Inc. Class B 6% Cumulative Redeemable Exchangeable Junior
Preferred Stock (the "TCI Class B Preferred Stock"); (viii) Convertible
Preferred Stock, Series C-TCI Group (the "TCOMA Series C Preferred Stock");
(ix) Convertible Preferred Stock, Series C-Liberty Media Group (the "LBTYA
Series C Preferred Stock"); (x) Redeemable Convertible TCI Group Preferred
Stock, Series G (the "TCI Series G Preferred Stock"); and (xi) Redeemable
Convertible Liberty Media Group Preferred Stock, Series H (the "TCI Series H
Preferred Stock"). The table indicates securities beneficially owned by each
director of the Company, by each executive officer named in the "Summary
Compensation Table of the Company" set forth below under "CONCERNING
MANAGEMENT--EXECUTIVE COMPENSATION", and by the directors and all executive
officers of the Company as a group.

Shares issuable upon exercise of options or conversion of convertible
securities and upon vesting of restricted stock awards are deemed to be
outstanding for the purpose of computing the percentage ownership and overall
voting power of persons beneficially owning such securities, but have not been
deemed to be outstanding for the purpose of computing the percentage ownership
or overall voting power of any other person. Voting power in the table is
computed with respect to a general election of directors of TCI with the TCI
Group Common Stock, Liberty Media Group Common Stock, Ventures Group Common
Stock, TCI Class B Preferred Stock, TCOMA Series C Preferred Stock, LBTYA
Series C Preferred Stock, TCI Series G Preferred Stock, and TCI Series H
Preferred Stock voting together as one class. The number of shares of Series A
TCI Group Stock, Series A Liberty Group Stock, and Series A Ventures Group
Stock in the table includes interests of the directors and named executive
officers and of members of the group of directors and executive officers in
shares held for their respective accounts by the trustee of the predecessor
plan to the TCI 401(k) Stock Plan (the "TCI Stock Plan"). So far as is known
to the Company, the persons indicated below have sole voting and investment
power with respect to the shares indicated as owned by them, except as
otherwise stated in the notes to the table and except for the shares held for
the benefit of such persons by the trustee of the TCI Stock Plan, which shares
are voted at the discretion of the trustee. The information in the table and
the footnotes is as of December 31, 1997, but has been restated to reflect the
1998 Stock Dividends (as that phrase is defined under "CONCERNING MANAGEMENT--
EXECUTIVE COMPENSATION--Background of Stock Adjustments" below).

Paul A. Gould Series A Stock 95,000(3) * *
Series A TCI Group Stock 99,197(4) *
Series B TCI Group Stock 244,842 *
Series A Liberty Group
Stock 153,807(4) *
Series B Liberty Group
Stock 58,621 * *
Series A Ventures Group
Stock 56,266 *
Series B Ventures Group
Stock 57,964 *
TCI Class B Preferred
Stock 12,248 *
</TABLE>

3
<PAGE>

Gary S. Howard Series A Stock -- -- --
Series A TCI Group Stock 242,767(8) *
Series A Liberty Group Stock 104,624(8) * *
Series A Ventures Group Stock 219,318(8) *

Jerome H. Kern Series A Stock 50,000(3) * *
Series A TCI Group Stock 2,086,335(9) *
Series A Liberty Group Stock 1,546,292(9) * *
Series A Ventures Group Stock 1,624,876(9) *

Pierre Lescure Series A Stock 50,000(3) * *

John C. Malone Series A Stock 50,000(3) * *
Series A TCI Group Stock 1,512,864(10) *
Series B TCI Group Stock 54,128,186(7)(11)(12)(13) 84.47%
Series A Liberty Group Stock 1,229,469(10)(11) *
Series B Liberty Group Stock 27,233,811(11)(12)(13) 85.96% 48.68%
Series A Ventures Group Stock 1,299,932(10) *
Series B Ventures Group Stock 45,239,888(7)(10)(11)(12)(13) 93.16%
TCI Class B Preferred Stock 273,600(11) 17.62%

Fred A. Vierra Series A Stock 596,000(14) * *
Series A TCI Group Stock 242,528(15) *
Series A Liberty Group Stock 318,382(15) * *
Series A Ventures Group Stock 369,858(15) *
TCI Class B Preferred Stock 200 *

Stephen M. Brett Series A Stock 100,000(16) * *
Series A TCI Group Stock 636,424(17) *
Series A Liberty Group Stock 572,232(17) * *
Series A Ventures Group Stock 519,986(17) *

Miranda Curtis Series A Stock 310,500(18) * *
Series A TCI Group Stock 22,750(19) *
Series A Liberty Group Stock 18,280(19) * *
Series A Ventures Group Stock 19,500(19) *

Graham E. Hollis Series A Stock 150,600(20) * *
Series A TCI Group Stock 4,196(21) *
Series A Liberty Group Stock 2,871(21) * *
Series A Ventures Group Stock 3,524(21) *
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
TITLE OF BENEFICIAL PERCENT OF VOTING
BENEFICIAL OWNER CLASS OR SERIES OWNERSHIP CLASS(1) POWER(1)
---------------- ------------------------ ----------- ---------- --------
<C> <S> <C> <C> <C>
All directors Series A Stock 2,057,175(2)(5)(22)(23) 1.95% *
and executive Series A TCI Group Stock 6,784,022(24) 1.46%
officers as a group Series B TCI Group Stock 54,373,028(7)(11)(12)(13) 84.85%
(14 persons) Series A Liberty Group Stock 5,081,472(11)(24) 1.60%
Series B Liberty Group Stock 27,292,432(11)(12)(13) 86.15% 49.11%
Series A Ventures Group Stock 5,675,482(24) 1.54%
Series B Ventures Group Stock 45,297,852(7)(11)(12)(13)(25) 93.28%
TCI Class B Preferred Stock 286,048(11) 18.43%
</TABLE>

- --------
* Less than one percent

(1) The figures for the percent of class and voting power calculations for
the Company are based on 103,627,880 shares of Series A Stock (after
elimination of shares of the Company held in treasury and by its
subsidiaries) and 11,700,000 shares of Series B Stock outstanding on
December 31, 1997. In addition, the figures for the percent of class and
voting power calculations for TCI are based on 458,473,123 shares of
Series A TCI Group Stock, 48,230,923 shares of Series B TCI Group Stock,
313,225,982 shares of Series A Liberty Group Stock, 31,681,124 shares of
Series B Liberty Group Stock, 365,719,524 shares of Series A Ventures
Group Stock, 44,228,902 shares of Series B Ventures Group Stock,
1,552,490 shares of TCI Class B Preferred Stock, 70,575 shares of TCOMA
Series C Preferred Stock, 70,575 shares of LBTYA Series C Preferred
Stock, 6,567,344 shares of TCI Series G Preferred Stock, and 6,567,894
shares of TCI Series H Preferred Stock outstanding on December 31, 1997
(in each case after elimination of shares of TCI held in treasury and by
subsidiaries of TCI). The aforementioned share numbers for the TCI stock
have been adjusted for the 1998 Stock Dividends. Further, in connection
with the settlement of certain litigation brought against TCI and others,
portions of certain transactions entered into by TCI in June 1997 have
been unwound such that 10,201,040 shares of Series A TCI Group Stock and
11,666,508 shares of Series A Ventures Group Stock have been returned to
TCI as authorized but unissued shares, and TCI issued 10,017,145 shares
of Series B TCI Group Stock and 12,034,298 shares of Series B Ventures
Group Stock. The December 31, 1997 outstanding share numbers have been
adjusted accordingly to reflect the effect of such settlement.

(2) Assumes the exercise in full of options granted in tandem with stock
appreciation rights ("SARs") in September 1997, pursuant to the Tele-
Communications International, Inc. 1995 Stock Incentive Plan (the "1995
Plan"), to acquire 450,000 shares of Series A Stock. None of these
options were exercisable as December 31, 1997. See "CONCERNING
MANAGEMENT--EXECUTIVE COMPENSATION--Option and SAR Grants Table" below
for additional information concerning this grant.

(3) Assumes the exercise in full of options granted in April 1996, pursuant
to the 1996 Nonemployee Director Stock Option Plan, to acquire 50,000
shares of Series A Stock. Options to acquire 10,000 shares are currently
exercisable. See "CONCERNING MANAGEMENT--COMPENSATION OF DIRECTORS" below
for additional information concerning this grant.

(4) Assumes the exercise in full of options granted in December 1996,
pursuant to TCI's 1994 Nonemployee Director Stock Option Plan (the "TCI
Director Stock Option Plan"), to acquire 50,000 shares of Series A TCI
Group Stock and 28,125 shares of Series A Liberty Group Stock. Options to
acquire 10,000 and 5,625, respectively, of such shares are currently
exercisable.

5
<PAGE>

(5) Assumes the exercise in full of options granted in tandem with SARs in
February 1997, by TCI, to acquire 50,000 shares of Series A Stock owned
by TCI. None of such options were exercisable at December 31, 1997.

(6) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in February 1997 to acquire 700,000 shares of Series
A TCI Group Stock, 375,000 shares of Series A Liberty Group Stock, and
600,000 shares of Series A Ventures Group Stock, none of which options
were exercisable at December 31, 1997; and (b) stock options granted in
tandem with SARs in July 1997 to acquire 1,050,000 shares of Series A TCI
Group Stock, 750,000 shares of Series A Liberty Group Stock, and 900,000
shares of Series A Ventures Group Stock, none of which options were
exercisable at December 31, 1997. Also includes 174,534 restricted shares
of Series A TCI Group Stock and 50,932 restricted shares of Series A
Ventures Group Stock. Such shares vest as to 50% in July 2001 and as to
the remaining 50% in July 2002.

(7) Includes 1,684,775 shares of Series B TCI Group Stock and 1,721,360
shares of Series B Ventures Group Stock held by trusts to which Mr.
Hindery is the trustee and over which Dr. Malone has the power to vote
such shares. Dr. Malone also has a right of first refusal with respect to
any proposed transfer of such shares. Such right of first refusal may be
exercised by Dr. Malone either by the payment of cash or, subject to
certain exceptions, by the exchanging of shares of Series A TCI Group
Stock for such Series B TCI Group Stock or Series A Ventures Group Stock
for such Series B Ventures Group Stock. If not exercised by Dr. Malone,
the right of first refusal may be exercised by TCI.

(8) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in November 1992 to acquire 35,000 shares of Series A
TCI Group Stock, 28,125 shares of Series A Liberty Group Stock and 30,000
shares of Series A Ventures Group Stock, all of which options are
currently exercisable; (b) stock options granted in tandem with SARs in
October 1993 to acquire 35,000 shares of Series A TCI Group Stock, 28,125
shares of Series A Liberty Group Stock and 30,000 shares of Series A
Ventures Group Stock, all of which options are currently exercisable; (c)
stock options granted in tandem with SARs in November 1994 to acquire
35,000 shares of Series A TCI Group Stock, 28,125 shares of Series A
Liberty Group Stock and 30,000 shares of Series A Ventures Group Stock,
of which options to acquire 21,000, 16,875 and 18,000, respectively, of
such shares are currently exercisable; and (d) stock options granted in
tandem with SARs in December 1995 to acquire 105,000 shares of Series A
TCI Group Stock and 90,000 shares of Series A Ventures Group Stock, of
which options to acquire 42,000 and 36,000, respectively, of such shares
are currently exercisable. Also includes 9,543 restricted shares of
Series A TCI Group Stock and 10,914 restricted shares of Series A
Ventures Group Stock. Such shares vest as to 50% in December 1999 and as
to the remaining 50% in December 2000.

(9) Assumes the exercise in full of the following: (a) stock options granted
in November 1994, pursuant to the TCI Director Stock Option Plan, to
acquire 50,000 shares of Series A TCI Group Stock and 28,125 shares of
Series A Liberty Group Stock, of which options to acquire 30,000 and
16,875, respectively, of such shares are currently exercisable; (b) stock
options granted in tandem with SARs in December 1995 to acquire 350,000
shares of Series A TCI Group Stock, 281,250 shares of Series A Liberty
Group Stock and 300,000 shares of Series A Ventures Group Stock, of which
options to acquire 140,000, 112,500 and 120,000, respectively, of such
shares are currently exercisable; (c) stock options granted in tandem
with SARs in July 1997 to acquire 1,050,000 shares of Series A TCI Group
Stock, 843,750 shares of Series A Liberty Group Stock and 900,000 shares
of Series A Ventures Group Stock, none of which options were exercisable
at December 31, 1997; and (d) stock options granted in tandem with SARs
in December 1997 to acquire 350,000 shares of Series A TCI Group Stock,
250,000 shares of Series A Liberty Group Stock and 300,000 shares of
Series A Ventures Group Stock, none of which options were exercisable at
December 31, 1997. Also includes 163,620 restricted shares of Series A
TCI Group Stock and 72,760 restricted shares of Series A Ventures Group
Stock. Such shares vest as to 50% in July 2001 and as to the remaining
50% in July 2002.

(10) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in November 1992 to acquire 700,000 shares of Series
A TCI Group Stock, 562,500 shares of Series A Liberty Group Stock, and
600,000 shares of Series A Ventures Group Stock, all of which options are
currently

6
<PAGE>

exercisable; (b) stock options granted in tandem with SARs in December 1995
to acquire 700,000 shares of Series A TCI Group Stock, 562,500 shares of
Series A Liberty Group Stock, and 600,000 shares of Series A Ventures Group
Stock, of which options to acquire 280,000, 225,000, and 240,000,
respectively, of such shares are currently exercisable; and (c) stock
options granted in tandem with SARs in December 1997 to acquire 2,800,000
shares of Series B Ventures Group Stock, none of which options were
exercisable at December 31, 1997. Such grant is subject to TCI stockholder
approval of the TCI 1998 Incentive Plan.

(11) Includes 776,380 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 TCI Class B Preferred Stock held by Dr. Malone's wife, Mrs. Leslie
Malone, as to which Dr. Malone has disclaimed beneficial ownership.

(12) Pursuant to a letter agreement dated June 17, 1988, the late Mr. Bob
Magness (the founder and former Chairman of TCI) and Kearns-Tribune
Corporation, a newspaper publishing concern, each granted Dr. Malone
certain rights with respect to the then Class B Common Stock of TCI owned
by them. Dr. Malone agreed with TCI to forego the exercise of such rights
in connection with a June 16, 1997 transaction whereby the Estate of Bob
Magness sold 30,545,864 shares of Series B TCI Group Stock to TCI in
exchange for an equal number of shares of Series A TCI Group Stock. In
consideration thereof, TCI granted Dr. Malone the right (the "Malone
Right") to acquire, at any time and from time to time prior to June 30,
1999, up to 30,545,864 shares of Series B TCI Group Stock for either (or
any combination of): (i) shares of Series A TCI Group Stock on a one-for-
one basis; or (ii) cash based on the closing market price of the Series B
TCI Group Stock on the National Market tier of The Nasdaq Stock Market
("Nasdaq") for a specified period prior to the acquisition of such shares
by Dr. Malone (the "TCI-Estates Agreement"). Effective February 9, 1998,
however, the number of shares of Series B TCI Group Stock subject to the
Malone Right was reduced from 30,545,864 to 14,511,570 shares. Dr. Malone
and certain members of the Magness family, individually, and in certain
cases, on behalf of the Estate of Betsy Magness and the Estate of Bob
Magness (collectively, the "Magness Group") have the right to participate
with Dr. Malone in any acquisition of up to 12,406,238 of the 14,511,570
shares of Series B TCI Group Stock subject to the Malone Right on a basis
proportionate to the relative ownership by the Magness Group and Dr.
Malone and his spouse of capital stock of TCI having more than one vote
per share in the election of directors. At this time, Dr. Malone's
proportionate share of such 12,406,238 shares is 6,809,537. The remaining
2,105,332 shares continue to be subject to the Malone Right, free of any
right of the Magness Group to participate in such shares. The Malone
Right may be exercised at any time prior to June 30, 1999. If the Magness
Group or any member thereof declines to participate in the Malone Right,
Dr. Malone may acquire all such shares.

In connection with the foregoing changes to the TCI-Estates Agreement, on
February 9, 1998, Dr. Malone and his spouse (the "Malone Group") and the
Magness Group entered into a Stockholders' Agreement pursuant to which the
parties agreed to consult with each other on any matter coming to a vote of
TCI stockholders; provided, however, that in the event of a disagreement,
the shares of Series B TCI Group Stock, Series B Liberty Group Stock and
Series B Ventures Group Stock held by the Malone Group and the Magness
Group will be voted in the manner directed by Dr. Malone pursuant to an
irrevocable proxy given by the Magness Group.

As a result of the February 1998 transactions, Dr. Malone's beneficial
ownership of TCI common stock includes the following shares held by the
Magness Group: 16,365,681 shares of Series B TCI Group Stock, 14,292,719
shares of Series B Liberty Group Stock, and 18,684,034 shares of Series B
Ventures Group Stock. In addition, all of the shares subject to the Malone
Right have been included in Dr. Malone's beneficial stock ownership
information.

(13) Dr. and Mrs. Malone's shares of Series B TCI Group Stock, Series B
Liberty Group Stock and Series B Ventures Group Stock (collectively, the
"TCI Series B Stock") are subject to the terms of a Call Agreement dated
as of February 9, 1998, among Dr. and Mrs. Malone and TCI. Such Call
Agreement provides TCI the right to acquire all of the shares of TCI
Series B Stock owned by Dr. and Mrs. Malone

7
<PAGE>

upon Dr. Malone's death or a contemplated sale of such TCI Series B Stock
to third parties at prices determined in accordance with the Call
Agreement. Such Call Agreement also prohibits Dr. and Mrs. Malone from
disposing of their TCI Series B Stock, except for certain exempt transfers
(such as transfers to related parties or the Magness Group or public sales
of up to an aggregate of 5% of their TCI Series B Stock).

(14) Assumes the exercise in full of stock options granted in tandem with SARs
in December 1995 to acquire 400,000 shares of Series A Stock. Options to
acquire 160,000 of such shares of Series A Stock are currently
exercisable. Also assumes the vesting in full of 15,000 restricted shares
of Series A Stock granted in December 1995. Such shares vest as to 50% in
December 1999 and as to the remaining 50% in December 2000. In addition,
assumes the vesting in full of 150,000 restricted shares of Series A
Stock granted in July 1997. Such shares vest as to 50% in July 2001 and
as to the remaining 50% in July 2002. See notes 4 and 5 to the table in
"CONCERNING MANAGEMENT--EXECUTIVE COMPENSATION--Summary Compensation
Table of the Company" below for additional information.

(15) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in November 1992 to acquire 56,250 shares of Series A
Liberty Group Stock and 60,000 shares of Series A Ventures Group Stock,
all of which options are currently exercisable; (b) stock options granted
in tandem with SARs in October 1993 to acquire 70,000 shares of Series A
TCI Group Stock, 56,250 shares of Series A Liberty Group Stock and 60,000
shares of Series A Ventures Group Stock, all of which options are
currently exercisable; and (c) stock options granted in tandem with SARs
in November 1994 to acquire 140,000 shares of Series A TCI Group Stock,
112,500 shares of Series A Liberty Group Stock and 120,000 shares of
Series A Ventures Group Stock, of which options to acquire 84,000, 67,500
and 72,000, respectively, of such shares are currently exercisable.

(16) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in December 1995 to acquire 50,000 shares of Series A
Stock, of which options to acquire 20,000 of such shares are currently
exercisable; and (b) stock options granted in tandem with SARs in July
1997 to acquire 50,000 shares of Series A Stock, none of which options
were exercisable at December 31, 1997. See "CONCERNING MANAGEMENT--
EXECUTIVE COMPENSATION--Option and SAR Grants Table" below for additional
information concerning the latter grant.

(17) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in November 1992 to acquire 56,250 shares of Series A
Liberty Group Stock, all of which options are currently exercisable; (b)
stock options granted in tandem with SARs in October 1993 to acquire
56,250 shares of Series A Liberty Group Stock, all of which options are
currently exercisable; (c) stock options granted in tandem with SARs in
November 1994 to acquire 140,000 shares of Series A TCI Group Stock,
112,500 shares of Series A Liberty Group Stock and 120,000 shares of
Series A Ventures Group Stock; of which options to acquire 84,000, 67,500
and 72,000, respectively, of such shares are currently exercisable; (d)
stock options granted in tandem with SARs in December 1995 to acquire
210,000 shares of Series A TCI Group Stock, 168,750 shares of Series A
Liberty Group Stock and 180,000 shares of Series A Ventures Group Stock,
of which options to acquire 84,000, 67,500 and 72,000, respectively, of
such shares are currently exercisable; and (e) stock options granted in
tandem with SARs in July 1997 to acquire 241,500 shares of Series A TCI
Group Stock, 150,000 shares of Series A Liberty Group Stock and 207,000
shares of Series A Ventures Group Stock, none of which options were
exercisable at December 31, 1997. In addition, assumes the vesting in
full of 35,634 restricted shares of Series A TCI Group Stock, 22,500
restricted shares of Series A Liberty Group Stock and 8,732 restricted
shares of Series A Ventures Group Stock granted in December 1995. Such
shares vest as to 50% in December 1999 and as to the remaining 50% in
December 2000.

(18) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in December 1995 to acquire 200,000 shares of Series
A Stock, of which options to acquire 80,000 of such shares are currently
exercisable; and (b) stock options granted in tandem with SARs in July
1997 to acquire 100,000 shares of Series A Stock, none of which options
were exercisable at December 31, 1997. Also includes 10,000 restricted
shares of Series A Stock granted in December 1995. Such shares vest as to
50% in

8
<PAGE>

December 1999 and as to the remaining 50% in December 2000. See notes 5, 6
and 8 to the table in "CONCERNING MANAGEMENT--EXECUTIVE COMPENSATION--
Summary Compensation Table of the Company" below for additional
information.

(19) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in October 1993 to acquire 5,250 shares of Series A
TCI Group Stock, 4,218 shares of Series A Liberty Group Stock and 4,500
shares of Series A Ventures Group Stock, all of which options are
currently exercisable; and (b) stock options granted in tandem with SARs
in November 1994 to acquire 17,500 shares of Series A TCI Group Stock,
14,062 shares of Series A Liberty Group Stock and 15,000 shares of Series
A Ventures Group Stock, of which options to acquire 10,500, 8,437 and
9,000, respectively, of such shares are currently exercisable. See notes
5 and 6 to the table in "CONCERNING MANAGEMENT--EXECUTIVE COMPENSATION--
Summary Compensation Table of the Company" below for additional
information.

(20) Assumes the exercise in full of the following: (a) stock options granted
in tandem with SARs in December 1995 to acquire 50,000 shares of Series A
Stock, of which options to acquire 20,000 of such shares are currently
exercisable; and (b) stock options granted in tandem with SARs in July
1997 to acquire 100,000 shares of Series A Stock, none of which options
were exercisable at December 31, 1997. See notes 6 and 8 to the table in
"CONCERNING MANAGEMENT--EXECUTIVE COMPENSATION--Summary Compensation
Table of the Company" below for additional information.

(21) Assumes the exercise in full of stock options granted in tandem with SARs
in November 1994 to acquire 2,520 shares of Series A TCI Group Stock,
2,025 shares of Series A Liberty Group Stock and 2,160 shares of Series A
Ventures Group Stock. None of such options were exercisable at December
31, 1997.

(22) Certain executive officers and directors hold options, which were granted
in tandem with SARs in December 1995, to acquire 750,000 shares of Series
A Stock. Options to acquire 300,000 of such shares are currently
exercisable. Certain executive officers and directors hold options, which
were granted in tandem with SARs in July 1997, to acquire 325,000 shares
of Series A Stock. None of these options were exercisable at December 31,
1997. Additionally, Mr. Vierra and Ms. Curtis hold in the aggregate
175,000 restricted shares of Series A Stock. Of such shares 25,000 vest
as to 50% in December 1999 and as to the remaining 50% in December of
2000 and the other 150,000 vest as to 50% in July 2001 and as to the
remaining 50% in July 2002.

(23) Assumes the exercise in full of stock options granted in April 1996
pursuant to the 1996 Nonemployee Director Stock Option Plan to acquire
200,000 shares of Series A Stock. Options to acquire 40,000 of such
shares are currently exercisable. See "CONCERNING MANAGEMENT--
COMPENSATION OF DIRECTORS" below for additional information concerning
these grants.

(24) Certain executive officers and directors hold options, which were granted
in tandem with SARs in November 1992, to acquire 735,000 shares of Series
A TCI Group Stock, 703,125 shares of Series A Liberty Group Stock and
690,000 shares of Series A Ventures Group Stock. All such options are
currently exercisable.

Also, certain executive officers and directors hold options, which were
granted in tandem with SARs in October 1993, to acquire an aggregate of
110,250 shares of Series A TCI Group Stock, 144,843 shares of Series A
Liberty Group Stock and 94,500 shares of Series A Ventures Group Stock.
All such options are currently exercisable.

Additionally, certain executive officers and directors hold options, which
were granted in tandem with SARs in November 1994, to acquire 341,320
shares of Series A TCI Group Stock, 274,274 shares of Series A Liberty
Group Stock and 292,560 shares of Series A Ventures Group Stock. Options
to acquire 203,280, 163,349 and 174,240, respectively, of such shares are
currently exercisable.

In addition, Mr. Kern holds a stock option, which was granted in November
1994, pursuant to the TCI Director Stock Option Plan, to purchase 50,000
shares of Series A TCI Group Stock and 28,125 shares of Series A Liberty
Group Stock. Options to acquire 30,000 and 16,875, respectively, of such
shares are currently exercisable.

9
<PAGE>

Certain executive officers and directors hold options, which were granted
in tandem with SARs in December 1995, to acquire 1,365,000 shares of
Series A TCI Group Stock, 1,012,500 shares of Series A Liberty Group Stock
and 1,170,000 shares of Series A Ventures Group Stock. Options to acquire
546,000, 405,000 and 468,000, respectively, of such shares are currently
exercisable.

Additionally, certain executive officers and directors hold 45,177
restricted shares of Series A TCI Group Stock, 22,500 restricted shares of
Series A Liberty Group Stock and 19,646 restricted shares of Series A
Ventures Group Stock. Such shares vest as to 50% in December 1999 and as
to the remaining 50% in December 2000.

Mr. Hindery holds stock options granted in tandem with SARs in February
1997 to acquire 700,000 shares of Series A TCI Group Stock, 375,000 shares
of Series A Liberty Group Stock and 600,000 shares of Series A Ventures
Group Stock. None of these options in tandem with SARs were exercisable at
December 31, 1997.

In addition, Mr. Gould holds a stock option, which was granted in December
1996, pursuant to the TCI Director Stock Option Plan, to purchase 50,000
shares of Series A TCI Group Stock and 28,125 shares of Series A Liberty
Group Stock. Options to acquire 10,000 and 5,625, respectively, are
exercisable.

In addition, certain executive officers and directors hold stock options,
which were granted in tandem with SARs in July 1997, to acquire 2,341,500
shares of Series A TCI Group Stock, 1,743,750 shares of Series A Liberty
Group Stock and 2,007,000 shares of Series A Ventures Group Stock. None of
these options were exercisable at December 31, 1997.

Also, Messrs. Hindery and Kern were granted 338,154 restricted shares of
Series A TCI Group Stock and 123,692 shares of Series A Ventures Group
Stock. Such shares vest as to 50% in July 2001 and as to the remaining 50%
in July 2002. Additionally, Mr. Kern holds a stock option, which was
granted in tandem with SARs in December 1997, to acquire 350,000 shares of
Series A TCI Group Stock, 250,000 shares of Series A Liberty Group Stock
and 300,000 shares of Series A Ventures Group Stock. None of these options
were exercisable at December 31, 1997.

All of the aforementioned options with tandem SARs, options and restricted
stock are reflected in this table assuming the exercise or vesting in full
of such securities as to each individual.

(25) Dr. Malone holds a stock option, which was granted in tandem with SARs in
December 1997, to acquire 2,800,000 shares of Series B Ventures Group
Stock. Such grant is subject to TCI stockholder approval of the TCI 1998
Incentive Plan. None of these options were exercisable at December 31,
1997. Such options are reflected in this table assuming the exercise or
vesting in full of such securities.

No equity securities in any subsidiary of the Company, other than directors'
qualifying shares, are owned by any of the Company's executive officers or
directors.

CHANGE OF CONTROL

The Company knows of no arrangements, including any pledge by any person of
securities of the Company, the operation of which may at a subsequent date
result in a change in control of the Company.

10
<PAGE>

ELECTION OF DIRECTORS PROPOSAL

GENERAL

The persons named in the accompanying proxy card will vote for the election
of three directors, with the term of office of each to continue until the
annual meeting of stockholders to be held in the year 2001 and until his
successor shall have been duly elected and qualified, unless authority to vote
is withheld. David J. Evans, Paul A. Gould and John C. Malone are the three
nominees for election at the Annual Meeting as directors of the Company, and
the Company is informed that these nominees are willing to serve as directors.
If any such nominee should decline or should become unable to serve as a
director for any reason, however, votes will be cast for a substitute nominee,
if any, designated by the Board of Directors, or, if none is so designated
prior to the election, votes will be cast according to the judgment in such
matters of the person or persons voting the proxy. Messrs. Evans, Gould and
Malone are incumbent directors. Mr. Evans was appointed to the Board of
Directors in November 1997 to fill a vacancy.

The following lists the three nominees for election as directors of the
Company and the five directors of the Company whose term of office will
continue after the Annual Meeting, including the birth date of each person,
the positions with the Company or principal occupations of each person,
certain other directorships held and the year each person became a director of
the Company. The number of shares of Common Stock owned beneficially by each
such person as of December 31, 1997, is set forth in "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" above. The Company currently has one
vacancy on its Board of Directors.

NOMINEES FOR ELECTION AS DIRECTORS

DAVID J. EVANS: Born June 1, 1940; director of the Company since November
1997. Mr. Evans has served as the President of the Company since September
1997, and as the Chief Executive Officer of the Company since January 1998.
From September 1997 to January 1998, Mr. Evans served as Chief Operating
Officer of the Company. Previously, from July 1996 to August 1997, Mr. Evans
was an Executive Vice President of News Corporation, a multi-media company,
and the President and Chief Executive Officer of Sky Entertainment Services
Latin America, Inc., a subsidiary of News Corporation. In such positions, Mr.
Evans had oversight responsibility for Latin American operations. Mr. Evans
served also as the President and Chief Operating Officer of Fox Television, a
subsidiary of News Corporation, from August 1994 to July 1997, where he
oversaw all international programming and the creation of new channels. Prior
to his position with Fox Television, Mr. Evans served as the President of the
international division of British Sky Broadcasting. Mr. Evans is a director of
Flextech plc.

PAUL A. GOULD: Born September 27, 1945; director of the Company since July
1995. Mr. Gould has been a Managing Director and an Executive Vice President
of Allen & Company Incorporated, an investment banking services company, for
more than the last five years. Mr. Gould has served as a director of TCI since
December 1996. He is also a director of Ascent Entertainment Group, Inc. and
Sunburst Hospitality Corporation.

JOHN C. MALONE: Born March 7, 1941; director and Chairman of the Board of
the Company since May 1995. Dr. Malone has served as the Chief Executive
Officer of TCI since January 1994, and as the Chairman of the Board of TCI
since November 1996. Dr. Malone served as the President of TCI from January
1994 to March 1997, as the Chief Executive Officer of TCI Communications,
Inc., a subsidiary of TCI ("TCIC"), from March 1992 to October 1994, and as
the President of TCIC from 1973 to October 1994. Dr. Malone is a director of
TCI, TCIC, TCI Pacific Communications, Inc. ("TCI Pacific"), and At Home
Corporation, all of which entities are subsidiaries of TCI. Dr. Malone is also
a director of BET Holdings, Inc., Lenfest Communications, Inc., The Bank of
New York, Cable Systems Corporation, and TCI Satellite Entertainment, Inc.
("Satellite").

11
<PAGE>

DIRECTORS WHOSE TERMS EXPIRE IN 1999

GARY S. HOWARD: Born February 22, 1951; director of the Company since April
1998. Mr. Howard has served as an Executive Vice President of TCI and also as
President and Chief Executive Officer of Ventures LLC since December 1997. Mr.
Howard has served as Chief Executive Officer of Satellite, a distributor of
satellite-based television services, since December 1996, and as President of
Satellite from February 1995 to August 1997. Since June 1997, Mr. Howard has
also served as Chief Executive Officer of United Video Satellite Group, Inc.,
a subsidiary of TCI ("UVSG"), and is a director of UVSG. Mr. Howard served as
President of UVSG from June 1997 to September 1997, a Senior Vice President of
TCIC from October 1994 to December 1996, and as a Vice President of TCIC from
December 1991 to October 1994. Mr. Howard is a director of Satellite and
Teleport Communications Group, Inc.

JEROME H. KERN: Born June 1, 1937; director of the Company since May 1995.
Mr. Kern is a consultant and has been Special Counsel with the law firm Baker
& Botts, L.L.P. since July 1996, and was a senior partner with Baker & Botts,
L.L.P. from September 1992 to July 1996. Mr. Kern has served as a director of
TCI since June 1994. Mr. Kern is a director of TCI Pacific.

DIRECTORS WHOSE TERMS EXPIRE IN 2000

LEO J. HINDERY, JR.: Born October 31, 1947; director of the Company since
April 1998. Mr. Hindery has served as the President and Chief Operating
Officer of TCI since March 1997 and as a director of TCI since May 1997. Mr.
Hindery has served as the President and Chief Executive Officer of TCIC since
March 1997, and has served as President and Chief Executive Officer of TCI
Pacific since September 1997. Mr. Hindery is also the President, the Chief
Executive Officer and/or a director of many of TCI's subsidiaries. Mr. Hindery
was previously founder, Managing General Partner and Chief Executive Officer
of InterMedia Partners, a cable TV operator, and its affiliated entities from
1988 to March 1997. Mr. Hindery is a director of TCIC, TCI Pacific, TCI Music,
Inc., UVSG and At Home Corporation, all of which entities are subsidiaries of
TCI. Mr. Hindery is also a director of Cablevision Systems Corporation,
Lenfest Communications, Inc. and Satellite.

PIERRE LESCURE: Born February 7, 1945; director of the Company since July
1995. Mr. Lescure has served as the Chairman and Chief Executive Officer of
Canal + S.A. and the Chairman of Le Studio Canal + since 1986. Canal + S.A. is
a European pay television operator and Le Studio Canal + is a movie production
subsidiary of Canal + S.A.

FRED A. VIERRA: Born November 9, 1931; director of the Company since October
1994, and as the Vice Chairman of the Board of the Company since May 1995.
From October 1994 to January 1998, Mr. Vierra served as the Chief Executive
Officer of the Company and from October 1994 to May 1995, Mr. Vierra served as
the Chairman of the Board of the Company. Mr. Vierra has served as an
Executive Vice President of TCIC from December 1991 to October 1994, and as an
Executive Vice President of TCI from January 1994 to January 1998. Since
January 1998, Mr. Vierra has served as a consultant to TCI. Mr. Vierra is a
director of Flextech plc.

VOTE REQUIRED FOR APPROVAL

Each of the above named director nominees will be elected if approved by a
plurality of the votes cast with respect to the shares of the Series A Stock
and the Series B Stock, represented in person or by proxy and entitled to vote
at the Annual Meeting, voting as a single class.

12
<PAGE>

CONCERNING MANAGEMENT

EXECUTIVE OFFICERS

The following lists the executive officers of the Company, other than the
directors listed above, their birth dates, and a description of their business
experience and positions held within the Company as of April 22, 1998. All
officers are appointed for an indefinite term and serve at the pleasure of the
Board of Directors.

<TABLE>
<CAPTION>
NAME POSITIONS
---- ---------
<C> <S>
Gregory B. Armstrong Has served as a Senior Vice President of
Born September 27, 1946 the Company since September 1996, and the
Managing Director for Latin American
operations since January 1998. Mr.
Armstrong served as a Vice President of the
Company from May 1995 to September 1996,
having previously been an employee of the
Company since August 1994. Mr. Armstrong is
also an officer of several of the Company's
subsidiaries. Mr. Armstrong served as the
President of Cable Management Group, Inc.,
a company which specializes in cable
operations, from 1988 to 1994, where he had
oversight responsibility for all company
operations, including investor and banking
relations and new business development.

Stephen M. Brett Has served as a Vice President and the
Born September 20, 1940 Secretary of the Company since May 1995.
Mr. Brett is also an officer of several of
the Company's subsidiaries. Mr. Brett has
served as an Executive Vice President, the
General Counsel and the Secretary of TCI
since January 1994, as an Executive Vice
President of TCIC since October 1997, and
as the General Counsel and Secretary of
TCIC since December 1991. From December
1991 to October 1997, Mr. Brett served as a
Senior Vice President of TCIC.

Miranda Curtis Has served as an Executive Vice President
Born November 26, 1955 of the Company since September 1996. Ms.
Curtis is also an officer of several of the
Company's subsidiaries. Ms. Curtis served
as a Senior Vice President of the Company
from May 1995 to August 1996. From October
1994 to May 1995, Ms. Curtis served as a
Vice President of the Company. From May
1992 to October 1994, Ms. Curtis was the
Director of International Development in
the international division of TCI and was
principally responsible for that division's
activities in Asia and the United Kingdom.

Graham E. Hollis Has served as an Executive Vice President
Born January 9, 1952 of the Company since September 1996, and as
the Chief Financial Officer of the Company
since May 1995. Mr. Hollis is also an
officer of several of the Company's
subsidiaries. Mr. Hollis served as a Vice
President of the Company from May 1995 to
August 1996. From July 1994 to May 1995,
Mr. Hollis was the Director of Finance of
the Company. From January 1994 to July
1994, Mr. Hollis was the Vice President-
Finance of DTC Management, LLC, a
subsidiary of The Peninsula and Oriental
Steam Navigation Company, an English
company, which provides diversified
transportation, leisure and shipping
services, where he had oversight
responsibility for finance and accounting
matters. Prior to his position with DTC
Management, LLC, Mr. Hollis served as the
Director of Accounting for TCD North, Inc.,
a real estate investment company.
</TABLE>

13
<PAGE>

Brendan Clouston, a director of the Company since April 25, 1997, resigned
from such position in February 1998. Wayne Gowen served as a Senior Vice
President of the Company from February 1996, until his resignation from the
Company in February 1998. Effective April 21, 1998, Tomiichi Akiyama and Adam
Singer resigned as directors of the Company. Mr. Akiyama had been a director
since August 1995, and Mr. Singer had been a director since May 1995.
Following such resignations, the remaining members of the Board of Directors
of the Company appointed Leo J. Hindery, Jr. and Gary S. Howard to the Board
of Directors.

There are no family relations, of first cousin or closer, among the
Company's directors or executive officers, by blood, marriage or adoption.

During the past five years, none of the above persons have had any
involvement in such legal proceedings as would be material to an evaluation of
his or her ability or integrity.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater-than-ten-percent beneficial owners
are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.

Based solely on the Company's review of the copies of such Section 16(a)
forms and amendments thereto received, or written representations that no
reporting was required, the Company believes that, during the year ended
December 31, 1997, its officers, directors and greater-than-ten-percent
beneficial owners complied with all Section 16(a) filing requirements, except
for the following: (i) TCI failed to file on a timely basis a Form 4 reporting
the acquisition of 450,000 shares of Series A Stock; and (ii) Mr. Clouston, a
former director of the Company, failed to file on a timely basis his Form 3
reporting his appointment as a director of the Company.

EXECUTIVE COMPENSATION

Background of Stock Adjustments. On August 3, 1995, TCI amended its Restated
Certificate of Incorporation to, among other things, (i) redesignate its then
outstanding TCI Class A Common Stock as the Series A TCI Group Stock and
redesignate its then outstanding TCI Class B Common Stock as the Series B TCI
Group Stock and (ii) authorize the Series A Liberty Group Stock and the Series
B Liberty Group Stock as two additional series of TCI common stock.
Thereafter, TCI distributed to the holders of TCI common stock one-fourth of a
share of the corresponding series of Liberty Media Group Common Stock in
respect of each share of TCI Group Common Stock held of record as of August 4,
1995, the record date for such distribution (the "Liberty Stock
Distribution"). Certain of the stock options with tandem stock appreciation
rights relative to the Series A TCI Group Stock and the Series A Liberty Group
Stock indicated in the following table were granted prior to the foregoing
redesignation and Liberty Stock Distribution. Options to purchase TCI Class A
Common Stock outstanding at the time of the Liberty Stock Distribution were
adjusted by issuing to the holders of such options separate options to
purchase that number of shares of Series A Liberty Group Stock, which the
holder would have been entitled to receive had the holder exercised such
option to purchase TCI Class A Common Stock prior to the record date for the
Liberty Stock Distribution and reallocating a portion of the aggregate
exercise price of the previously outstanding options to the newly issued
options to purchase Series A Liberty Group Stock.

On December 4, 1996, TCI distributed (the "Distribution") to the holders of
shares of Series A TCI Group Stock and Series B TCI Group Stock all of the
issued and outstanding common stock of Satellite, then a wholly-owned
subsidiary of TCI. Prior to the Distribution, certain directors, officers and
employees of TCI and its subsidiaries had been granted options to purchase
shares of Series A TCI Group Stock ("TCI Options") and stock appreciation
rights with respect to shares of Series A TCI Group Stock ("TCI SARs"). The
TCI Options and TCI SARs had been granted pursuant to various stock plans of
TCI (the "TCI Plans"). The TCI Plans give the Board of Directors of TCI (the
"TCI Board") the authority to make equitable adjustments to outstanding TCI
Options and TCI SARs in the event of certain transactions, including
transactions such as the Distribution.

14
<PAGE>

The TCI Board determined that, immediately prior to the Distribution, each
TCI Option would be divided into two separately exercisable options: (i) an
option to purchase TCI Satellite Entertainment, Inc. Series A Common Stock (a
"SATCo Option"), exercisable for the number of shares of TCI Satellite
Entertainment, Inc. Series A Common Stock, par value $1.00 per share (the
"SATCo Series A Common Stock"), that would have been issued in the
Distribution with respect to the shares of Series A TCI Group Stock subject to
the applicable TCI Option, if such TCI Option had been exercised in full
immediately prior to the record date of the Distribution, and containing
substantially equivalent terms as the existing TCI Option; and (ii) an option
to purchase Series A TCI Group Stock (a "Series A TCI Group Option"),
exercisable for the same number of shares of Series A TCI Group Stock as the
corresponding TCI Option had been exercisable prior to the Distribution. The
aggregate exercise price of each TCI Option was allocated between the SATCo
Option and the Series A TCI Group Option into which it was divided, and all
other terms, including date of grant, of the SATCo Option and the Series A TCI
Group Option are in all material respects the same as the terms of such TCI
Option. The TCI Board made similar adjustments to the outstanding TCI SARs,
resulting in the holders thereof holding SARs with respect to Series A TCI
Group Stock and SATCo Series A Common Stock instead of TCI SARs, and to
outstanding restricted stock awards, resulting in the holders thereof holding
restricted shares of SATCo Series A Common Stock in addition to restricted
shares of Series A TCI Group Stock.

The TCI Board made the foregoing adjustments pursuant to the anti-dilution
provisions of the TCI Plans, pursuant to which the respective TCI Options and
TCI SARs had been granted.

Prior to the Distribution, TCI and Satellite entered into an agreement to
sell to each other from time to time at the then current market price shares
of Series A TCI Group Stock and SATCo Series A Common Stock, respectively, as
necessary to satisfy their respective obligations under any agreement or plan.

Effective January 14, 1997, TCI issued a stock dividend to holders of
Liberty Media Group Common Stock consisting of one share of Series A Liberty
Group Stock for every two shares of Series A Liberty Group Stock held and one
share of Series A Liberty Group Stock for every two shares of Series B Liberty
Group Stock held. As a result of such stock dividend, the number of shares
underlying options granted in tandem with SARs to purchase Series A Liberty
Group Stock and the exercise prices of such options in tandem with SARs have
been adjusted.

On September 10, 1997, TCI concluded an exchange offer with its stockholders
(the "Exchange Offer") whereby TCI created two new series of tracking stocks,
the Series A Ventures Group Stock and the Series B Ventures Group Stock. Upon
consummation of the Exchange Offer, TCI exchanged (i) shares of Series A
Ventures Group Stock for shares of Series A TCI Group Stock; and (ii) shares
of Series B Ventures Group Stock for shares of Series B TCI Group Stock. In
addition, in accordance with the TCI Plans, the TCI Board authorized an
equitable adjustment to the Series A TCI Group Options and the SARs with
respect to Series A TCI Group Stock outstanding immediately prior to the
consummation of the Exchange Offer to reflect the expected shift of attributed
value from the TCI Group Common Stock to the Ventures Group Common Stock. As a
result, the Series A TCI Group Options outstanding immediately prior to the
Exchange Offer have been canceled and reissued as two separately exercisable
options: (i) with 70% of the shares of Series A TCI Group Stock underlying the
Series A TCI Group Options allocated to an option to purchase Series A TCI
Group Stock; and (ii) with 30% of the shares of Series A TCI Group Stock
underlying the Series A TCI Group Options allocated to an option to purchase
Series A Ventures Group Stock. The terms of these adjusted options, including
the exercise price and the date of grant, are in all material respects the
same as the terms of the Series A TCI Group Options. The TCI Board made
corresponding adjustments to outstanding SARs with respect to Series A TCI
Group Stock.

Effective February 6, 1998, TCI issued a stock dividend to holders of
Liberty Media Group Common Stock consisting of one share of Series A Liberty
Group Stock for every two shares of Series A Liberty Group Stock held and one
share of Series B Liberty Group Stock for every two shares of Series B Liberty
Group Stock held (the "Liberty Stock Dividend"). In addition, TCI issued a
stock dividend to holders of Ventures Group Common Stock consisting of one
share of Series A Ventures Group Stock for each share of Series A Ventures
Group

15
<PAGE>

Stock held and one share of Series B Ventures Group Stock for each share of
Series B Ventures Group Stock held (the "Ventures Stock Dividend" and together
with the Liberty Stock Dividend, the "1998 Stock Dividends"). References to
share amounts and per share exercise and other prices have been adjusted
retroactively to give effect to the 1998 Stock Dividends. As a result, the
number of shares underlying the options granted in tandem with SARs to
purchase Series A Liberty Group Stock, Series A Ventures Group Stock, and
Series B Ventures Group Stock, respectively, and the respective exercise
prices of such options in tandem with SARs have been adjusted.

Summary Compensation Table of the Company. The following table shows for
each of the years in the three year period ended December 31, 1997, all forms
of compensation for the Chief Executive Officer and each of the four most
highly compensated executive officers of the Company, whose annual salary and
bonus exceeded $100,000 for the year ended December 31, 1997. Unless otherwise
noted, all share and per share amounts reflected in the table and the related
footnotes have been restated to reflect the above-described transactions under
"Background of Stock Adjustments". In addition, the information in this
section reflects compensation received by the named executive officers for all
services performed for the Company, TCI and their respective subsidiaries.

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------- ------------------------
SECURITIES
OTHER RESTRICTED UNDERLYING ALL
ANNUAL STOCK OPTIONS/ OTHER
NAME AND COMPENSATION AWARDS SARS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) ($) (#) ($)(1)
------------------ ---- ---------- --------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fred A. Vierra
(Chief Executive
Officer until 1-1-
98)................... 1997 $666,346(2) $ -- $ 2,812(3) $2,193,750(4) -- $15,000
1996 $650,000(2) $ -- $ 4,231(3) $ -- -- $15,000
1995 $650,000(2) $ -- $ 3,207(3) $ 380,625(5) 400,000(6) $15,000
David J. Evans
(President and
Chief Operating
Officer).............. 1997 $696,154(7) $ -- $ -- $ -- 450,000(8) $ --

Stephen M. Brett
(Vice President and
Secretary)............ 1997 $482,250 $ -- $ 2,796(3) $ -- 648,500(8) $15,000
1996 $450,000 $ -- $ 4,239(3) $ -- -- $15,000
1995 $364,000 $ -- $ 3,362(3) $1,087,500(9) 638,750(6)(10) $15,000
Miranda Curtis
(Executive Vice
President)............ 1997 $266,807(11) $ -- $33,564(12) $ -- 100,000(8) $ --
1996 $262,587(11) $25,488(11) $31,775(12) $ -- -- $ --
1995 $157,990(11) $35,548(11) $31,579(12) $ 253,750(5) 200,000(6) $ --
Graham E. Hollis
(Executive Vice
President and
Chief Financial
Officer).............. 1997 $200,000 $34,000 $ 3,089(3) $ -- 100,000(8) $ 9,500
1996 $135,000 $ -- $ -- $ -- -- $ 9,500
1995 $124,231 $61,500 $ -- $ -- 50,000(6) $ 6,133
</TABLE>
- --------
(1) Amounts represent contributions to the TCI Stock Plan. The TCI Stock Plan
provides benefits upon an employee's retirement, which is normally when
the employee reaches 65 years of age. TCI Stock Plan participants may
contribute up to 10% of their compensation and TCI (by annual resolution
of the Board of Directors) may contribute up to a matching 100% of the
participants' contributions. Participant contributions to the TCI Stock
Plan are fully vested upon contribution.

Generally, participants acquire a vested right in TCI contributions as
follows:

<TABLE>
<CAPTION>
YEARS OF VESTING
SERVICE PERCENTAGE
-------- ----------
<S> <C>
Less than 1....................................................... 0%
1-2............................................................... 33%
2-3............................................................... 66%
3 or more......................................................... 100%
</TABLE>

16
<PAGE>

With respect to contributions made in 1997, 1996 and 1995, Messrs. Vierra
and Brett are fully vested and, as of January 1, 1998, Mr. Hollis is also
fully vested. The TCI Stock Plan includes a salary deferral feature with
respect to employee contributions. Forfeitures (due to participants'
withdrawal prior to full vesting) are used to reduce TCI's otherwise
determined contributions.

Directors, who are not employees of TCI or the Company, are ineligible to
participate in the TCI Stock Plan. The TCI Stock Plan provides benefits
upon retirement. Under the terms of the TCI Stock Plan, employees are
eligible for participation after three months of service. Although TCI has
not expressed a present intent to terminate the TCI Stock Plan, it may do
so at any time. The TCI Stock Plan provides for full immediate vesting of
all participants' rights upon termination of the TCI Stock Plan. The
Company's employees are eligible to participate in the TCI Stock Plan for
so long as TCI beneficially owns shares of the common stock of the Company
representing at least 80% of the voting power of the outstanding shares of
capital stock of the Company entitled to vote generally in the election of
directors.

(2) Includes deferred compensation of $250,000 in each of the years indicated.

(3) Consists of amounts reimbursed during the year indicated for the payment
of taxes.

(4) Grants of stock options, stock appreciation rights, restricted shares,
stock units, or any combination thereof may be made by the Board of
Directors of the Company under the 1995 Plan. Pursuant to the 1995 Plan,
on July 23, 1997, the Company granted Mr. Vierra 150,000 restricted shares
of Series A Stock, which vest as to 50% of such shares in July 2001 and as
to the remaining 50% in July 2002. At the end of 1997, these restricted
shares had a value of $2,700,000, based upon the closing market price per
share of the Series A Stock on Nasdaq on December 31, 1997. The Company
has not paid cash dividends on its Series A Stock and does not anticipate
declaring and paying cash dividends on the Series A Stock at any time in
the foreseeable future. For additional information concerning the 1995
Plan, see "Option and SAR Grants Table" below.

(5) On December 13, 1995, pursuant to the 1995 Plan, the Company granted Mr.
Vierra and Ms. Curtis 15,000 and 10,000 restricted shares, respectively,
of Series A Stock, which vest as to 50% of such shares on December 13,
1999, and as to the remaining 50% on December 13, 2000. At the end of
1997, these restricted shares had a value of $270,000 and $180,000,
respectively, based upon the closing market price per share of the Series
A Stock on Nasdaq on December 31, 1997. The Company has not paid cash
dividends on its Series A Stock and does not anticipate declaring and
paying cash dividends on the Series A Stock at any time in the foreseeable
future.

(6) On December 13, 1995, pursuant to the 1995 Plan, the Company granted
certain executive officers, directors and other key employees of the
Company and TCI options in tandem with SARs to acquire an aggregate of
1,302,000 shares of Series A Stock at a purchase price of $16.00 per
share. Additionally, TCI granted to one of its executive officers options
in tandem with SARs to acquire 50,000 shares of Series A Stock owned by
TCI. Such options vest evenly over five years with such vesting period
beginning August 4, 1995, first become exercisable on August 4, 1996, and
expire on August 4, 2005. As a result of such grants, Messrs. Vierra,
Brett and Hollis and Ms. Curtis received options in tandem with SARs to
acquire 400,000, 50,000, 50,000 and 200,000 shares, respectively, of
Series A Stock. For additional information concerning the 1995 Plan, see
note 5 to the "Option and SAR Grants Table" below.

(7) Mr. Evans commenced employment with the Company on September 1, 1997, as
President and Chief Operating Officer. Accordingly, the 1997 compensation
information included in the table represents only four months of
employment during 1997. In addition, such compensation includes $500,000,
which is the value of 30,075 shares of Series A Stock granted Mr. Evans by
the Company on September 1, 1997, pursuant to his employment agreement
with the Company. Such value is based on a per share price of $16.63,
which is the average of the closing prices of the Series A Stock on Nasdaq
for the 10 trading days preceding the date of grant. For additional
information relating to this grant, see "EMPLOYMENT CONTRACTS, TERMINATION
OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS" below. As of January 1,
1998, Mr. Evans became the Chief Executive Officer of the Company.

17
<PAGE>

(8) For information concerning this award, see "Option and SAR Grants Table"
below.

(9) On December 13, 1995, pursuant to the TCI 1994 Stock Incentive Plan (the
"TCI 1994 Plan"), TCI granted Mr. Brett 35,634 restricted shares of
Series A TCI Group Stock, 22,500 shares of Series A Liberty Group Stock,
8,732 shares of Series A Ventures Group Stock, and 4,000 shares of SATCo
Series A Common Stock. Such restricted shares vest as to 50% of such
shares in December 1999 and as to the remaining 50% of such shares in
December 2000. At the end of 1997, these restricted shares had an
aggregate value of $1,690,387 based upon the respective closing prices
per share of such securities on Nasdaq on December 31, 1997. TCI has not
paid cash dividends on any such securities and does not anticipate
declaring and paying cash dividends on such securities at any time in the
foreseeable future.

(10) Pursuant to the TCI 1994 Plan, on December 13, 1995, TCI granted Mr.
Brett options in tandem with SARs to acquire 210,000 shares of Series A
TCI Group Stock, 168,750 shares of Series A Liberty Group Stock, 180,000
shares of Series A Ventures Group Stock and 30,000 shares of SATCo Series
A Common Stock at adjusted exercise prices of $14.62, $10.66, $7.31 and
$23.76, respectively, per share. Such options vest evenly over five years
with such vesting period beginning August 4, 1995, first become
exercisable on August 4, 1996, and expire on August 4, 2005.

Notwithstanding the vesting schedule as set forth in the option agreement,
the options and SARs shall immediately vest and become exercisable if
grantee's employment with TCI: (a) shall terminate by reason of: (i)
termination by TCI without cause, (ii) termination by the grantee for good
reason (as defined in the agreement), or (iii) disability; (b) shall
terminate pursuant to provisions of a written employment agreement, if any,
between the grantee and TCI which expressly permits the grantee to
terminate such employment upon occurrence of certain specified events; or
(c) shall terminate if grantee dies while employed by TCI. Further, the
options and SARs will immediately vest and become exercisable in the event
of an Approved Transaction, Board Change, or Control Purchase (each as
defined in the TCI 1994 Plan), unless, in the case of an Approved
Transaction, the Compensation Committee of the TCI Board, under the
circumstances specified in the TCI 1994 Plan, determines otherwise.

(11) The Company paid Ms. Curtis' salary and bonus in United Kingdom pounds
sterling. The 1997, 1996 and 1995 amounts in the table represent the U.S.
dollar equivalent using the average exchange rate in effect during the
years ended December 31, 1997, 1996 and 1995, respectively.

(12) All of the 1997, 1996 and 1995 amounts represent the U.S. dollar
equivalents, using the average exchange rate in effect during the years
ended December 31, 1997, 1996 and 1995, respectively, for the disturbance
allowances and other compensation paid to Ms. Curtis in pounds sterling.

18
<PAGE>

Option and SAR Grants Table. The following table shows all grants of stock
options and SARs to each of the named executive officers of the Company during
the year ended December 31, 1997. All share and per share amounts reflected in
the table and the related footnotes have been restated to reflect the
transactions described under "Background of Stock Adjustments" above.

<TABLE>
<CAPTION>
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS
OPTIONS/ GRANTED TO EXERCISE
SARS EMPLOYEES OR BASE MARKET PRICE GRANT DATE
NAME AND GRANTED IN FISCAL PRICE ON GRANT EXPIRATION PRESENT VALUE
SECURITY GRANTED (#) YEAR ($/SH) DATE ($/SH) DATE ($)
---------------- ---------- ---------- -------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
David J. Evans
Series A Stock......... 450,000(1) 39.8%(2) $14.63 $15.94(3) 9/01/07 $4,608,000(4)

Stephen M. Brett
Series A Stock......... 50,000(5) 4.4%(2) $14.63 $14.63(6) 7/23/07 $ 449,500(4)
Series A TCI Group
Stock.................. 241,500(7) 3.3%(8) $15.68 $15.81(9) 7/23/07 $2,357,040(4)
Series A Liberty Group
Stock.................. 150,000(7) 6.2%(10) $16.75 $17.25(11) 7/23/07 $1,612,000(4)
Series A Ventures Group
Stock.................. 207,000(7) 3.1%(12) $ 7.84 $ -- (13) 7/23/07 $ -- (13)

Miranda Curtis
Series A Stock......... 100,000(5) 8.8%(2) $14.63 $14.63(6) 7/23/07 $ 899,000(4)

Graham E. Hollis
Series A Stock......... 100,000(5) 8.8%(2) $14.63 $14.63(6) 7/23/07 $ 899,000(4)
</TABLE>
- --------
(1) On September 1, 1997, pursuant to the 1995 Plan, the Company granted Mr.
Evans options in tandem with SARs to acquire 450,000 shares of Series A
Stock. Such options in tandem with SARs vest evenly over five years with
such vesting period beginning September 1, 1997, first become exercisable
September 1, 1998, and expire on September 1, 2007.

Notwithstanding the vesting schedule as set forth in the option agreement,
the options and SARs shall immediately vest and become exercisable if
grantee's employment with the Company: (a) shall terminate by reason of:
(i) termination by the Company without cause, (ii) termination by grantee
for good reason (as defined in the agreement), or (iii) disability; (b)
shall terminate pursuant to provisions of a written employment agreement,
if any, between the grantee and the Company which expressly permits the
grantee to terminate such employment upon occurrence of certain specified
events; or (c) shall terminate if grantee dies while employed by the
Company. Further, the options and SARs will immediately vest and become
exercisable in the event of an Approved Transaction, Board Change, or
Control Purchase (each as defined in the 1995 Plan), unless, in the case of
an Approved Transaction, the Compensation Committee of the Company's Board
of Directors, under the circumstances specified in the 1995 Plan,
determines otherwise.

(2) Based on all options to purchase Series A Stock granted to employees of
the Company and TCI during the year ended December 31, 1997.

(3) Represents the closing market price per share of the Series A Stock on
Nasdaq on September 2, 1997, the first trading day following the date of
grant.

(4) The values shown are based on the Black-Scholes model and are stated in
current annualized dollars on a present value basis. The key assumptions
used in the model for purposes of this calculation include the following:
(a) a 6.15% discount rate on the date of grant; (b) a 35% volatility
factor; (c) the 10-year option term; (d) the closing market price of the
respective securities on the date of grant; and (e) an expected dividend
rate of zero. The actual value an executive may realize will depend upon
the extent to which the stock price exceeds the exercise price on the
date the option or SAR is exercised. Accordingly, the value, if any,
realized by an executive will not necessarily be the value determined by
the model.

19
<PAGE>

(5) On July 23, 1997, pursuant to the 1995 Plan, the Company granted certain
executive officers, directors and other key employees of the Company and
TCI options in tandem with SARs to acquire an aggregate of 630,000 shares
of Series A Stock. Such options in tandem with SARs vest evenly over five
years with such vesting period beginning July 23, 1997, first become
exercisable on July 23, 1998, and expire on July 23, 2007. Messrs. Brett
and Hollis and Ms. Curtis received options in tandem with SARs to acquire
50,000, 100,000 and 100,000 shares, respectively, of Series A Stock.

(6) Represents the closing market price per share of the Series A Stock on
Nasdaq on July 23, 1997.

(7) On July 23, 1997, pursuant to the TCI 1996 Incentive Plan, TCI granted to
Mr. Brett options in tandem with SARs to acquire 241,500 shares of Series
A TCI Group Stock, 150,000 shares of Series A Liberty Group Stock and
207,000 shares of Series A Ventures Group Stock. Such options in tandem
with SARs vest evenly over five years with such vesting period beginning
July 23, 1997, first become exercisable on July 23, 1998, and expire on
July 23, 2007.

Notwithstanding the vesting schedule as set forth in the option agreement,
the options and SARs shall immediately vest and become exercisable if
grantee's employment with TCI: (a) shall terminate by reason of: (i)
termination by TCI without cause, (ii) termination by grantee for good
reason (as defined in the agreement), or (iii) disability; (b) shall
terminate pursuant to provisions of a written employment agreement, if any,
between the grantee and TCI which expressly permits the grantee to
terminate such employment upon occurrence of certain specified events; or
(c) shall terminate if grantee dies while employed by TCI. Further, the
options and SARs will immediately vest and become exercisable in the event
of an Approved Transaction, Board Change, or Control Purchase (each as
defined in the 1996 Plan), unless, in the case of an Approved Transaction,
the Compensation Committee of the TCI Board, under the circumstances
specified in the TCI 1996 Incentive Plan, determines otherwise.

(8) Based on all options to purchase Series A TCI Group Stock granted to TCI
employees during the year ended December 31, 1997.

(9) Represents the closing market price per share of the Series A TCI Group
Stock on Nasdaq on July 23, 1997.

(10) Based on all options to purchase Series A Liberty Group Stock granted to
TCI employees during the year ended December 31, 1997.

(11) Represents the closing market price per share of the Series A Liberty
Group Stock on Nasdaq on July 23, 1997.

(12) Based on all options to purchase Series A Ventures Group Stock granted to
TCI employees during the year ended December 31, 1997.

(13) Mr. Brett received his options in tandem with SARs to purchase Series A
Ventures Group Stock as a result of the Exchange Offer. For additional
information concerning the adjustments made by the TCI Board to
outstanding options and SARs see "Background to Stock Adjustments" above.
Because the Series A Ventures Group Stock did not begin regular way
trading on Nasdaq until September 17, 1997, no market price per share on
grant date or grant date present value information is available.
Assuming, however, the closing market price of Series A Ventures Group
Stock on the relevant date would have been the same as the closing market
price of Series A TCI Group Stock on the date of grant and then adjusting
such closing

20
<PAGE>

market price for the Ventures Stock Dividend, Mr. Brett's grant of options in
tandem with SARs to acquire 207,000 shares of Series A Ventures Group Stock
would have had a market price per share of $7.91 and a grant date present value
of $1,010,160. (See note 4 above for information about the assumptions used in
the Black-Scholes model to determine the grant date present value.)

Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table.
The following table provides each exercise of stock options and SARs during
the year ended December 31, 1997, by each of the named executive officers of
the Company and the December 31, 1997 year-end number and value of unexercised
options and SARs on an aggregated basis. The number of securities underlying
the options have been adjusted to reflect the 1998 Stock Dividends.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT 12/31/97(#) AT 12/31/97($)
NAME AND SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
SERIES OF COMMON STOCK ON EXERCISE (#)(1) VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE
---------------------- ------------------ ----------------- -------------- --------------
<S> <C> <C> <C> <C>
Fred A. Vierra
Series A Stock
Exercisable........... -- -- 160,000 $ 320,000
Unexercisable......... -- -- 240,000 $ 480,000
Series A TCI Group
Stock
Exercisable........... 70,000 $1,242,500 154,000 $2,357,915
Unexercisable......... -- -- 56,000 $ 769,860
Series A Liberty Group
Stock
Exercisable........... -- -- 180,000 $2,852,850
Unexercisable......... -- -- 45,000 $ 647,400
Series A Ventures Group
Stock
Exercisable........... -- -- 192,000 $1,562,160
Unexercisable......... -- -- 48,000 $ 338,940
SATCo Series A Common
Stock
Exercisable........... -- -- 32,000 $ --
Unexercisable......... -- -- 8,000 $ --

David J. Evans
Series A Stock
Exercisable........... -- -- -- $ --
Unexercisable......... -- -- 450,000 $1,518,750

Stephen M. Brett
Series A Stock
Exercisable........... -- -- 20,000 $ 40,000
Unexercisable......... -- -- 80,000 $ 228,500
Series A TCI Group
Stock
Exercisable........... 140,000 $1,779,750 168,000 $2,273,460
Unexercisable......... -- -- 423,500 $5,048,051
Series A Liberty Group
Stock
Exercisable........... -- -- 247,500 $3,764,100
Unexercisable......... -- -- 296,250 $3,126,275
Series A Ventures Group
Stock
Exercisable........... 120,000 $ 756,450 144,000 $1,001,340
Unexercisable......... -- -- 363,000 $2,385,799
SATCo Series A Common
Stock
Exercisable........... -- -- 44,000 $ --
Unexercisable......... -- -- 26,000 $ --
</TABLE>

21
<PAGE>

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT 12/31/97(#) AT 12/31/97($)
NAME AND SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
SERIES OF COMMON STOCK ON EXERCISE (#)(1) VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE
---------------------- ------------------ ----------------- -------------- --------------
<S> <C> <C> <C> <C>
Miranda Curtis
Series A Stock
Exercisable........... -- -- 80,000 $160,000
Unexercisable......... -- -- 220,000 $577,000
Series A TCI Group
Stock
Exercisable........... -- -- 15,750 $234,583
Unexercisable......... -- -- 7,000 $ 96,233
Series A Liberty Group
Stock
Exercisable........... -- -- 12,655 $191,941
Unexercisable......... -- -- 5,625 $ 80,925
Series A Ventures Group
Stock
Exercisable........... -- -- 13,500 $103,067
Unexercisable......... -- -- 6,000 $ 42,368
SATCo Series A Common
Stock
Exercisable........... -- -- 2,250 $ --
Unexercisable......... -- -- 1,000 $ --

Graham E. Hollis
Series A Stock
Exercisable........... -- -- 20,000 $ 40,000
Unexercisable......... -- -- 130,000 $397,000
Series A TCI Group
Stock
Exercisable........... 3,780 $33,302 -- $ --
Unexercisable......... -- -- 2,520 $ 34,644
Series A Liberty Group
Stock
Exercisable........... 3,037 $36,349 -- $ --
Unexercisable......... -- -- 2,025 $ 29,133
Series A Ventures Group
Stock
Exercisable........... 3,240 $14,969 -- $ --
Unexercisable......... -- -- 2,160 $ 15,252
SATCo Series A Common
Stock
Exercisable........... -- -- 540 $ --
Unexercisable......... -- -- 360 $ --
</TABLE>
- --------
(1) In all cases, represents the number of shares underlying the SARs, which
were exercised in 1997.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
AGREEMENTS

Except as described below, the Company has no employment contracts,
termination of employment agreements or change of control agreements with any
of the named executive officers of the Company. The vesting of certain equity-
based incentive awards granted by the Company to executive officers of the
Company may, under certain circumstances, be accelerated in the event of a
change in control of the Company or upon termination of an executive officer's
employment with the Company.

Employment Agreement with Mr. Vierra. Until December 31, 1997, the Company,
TCI and Mr. Vierra were parties to an Amended and Restated Employment
Agreement relating to Mr. Vierra's employment with the Company as Vice
Chairman and Chief Executive Officer. Effective January 1, 1998, however, the
parties

22
<PAGE>

terminated Mr. Vierra's employment agreement and replaced it with a consulting
agreement. In connection with Mr. Vierra becoming a consultant, Mr. Vierra
resigned as an officer of the Company but remains a director and the Vice
Chairman of the Company's Board of Directors. For more information on Mr.
Vierra's consulting agreement, see "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS--TRANSACTIONS WITH MANAGEMENT--Consulting Agreement with Mr.
Vierra" below.

Under the terms of the employment agreement, Mr. Vierra received a base
salary of $650,000 per year. Mr. Vierra's salary was subject to annual review
by the Board of Directors, which could in its sole discretion increase his
salary. In October 1997, the Company's Board of Directors increased Mr.
Vierra's salary from $650,000 per annum to $700,000 per annum. Mr. Vierra's
employment agreement provided for the deferral of a portion of each monthly
salary payment so as to result in the deferral of salary at the rate of
$250,000 per annum. The deferred amounts would have been paid in monthly
installments over a 240-month period commencing on the later of December 31,
1998, and the termination of Mr. Vierra's full-time employment with the
Company, together with interest thereon at the rate of 8% per annum compounded
annually from the date of deferral to the payment date. In the event of Mr.
Vierra's death, all outstanding deferred amounts would have been paid in a
lump sum to his beneficiaries. Such deferred amounts will now be paid in
accordance with the terms of the consulting agreement referenced above.

While employed by the Company pursuant to his employment agreement, Mr.
Vierra could participate in all formal incentive compensation plans, stock
incentive plans, employee stock purchase plans, retirement plans and insurance
plans or policies adopted for the benefit of TCI's or the Company's executive
officers or employees generally. Additionally, Mr. Vierra's employment
agreement provided for personal use of TCI's aircraft and flight crew, limited
to an aggregate value of $35,000 per year.

Under the employment agreement, substantially all of Mr. Vierra's business
time, attention and efforts was devoted to the affairs of the Company. Mr.
Vierra's agreement further provided that during his employment with the
Company and for the longer of: (i) a period of two years following the
effective date of his termination of employment; or (ii) until December 31,
1998 (in the event Mr. Vierra terminated his employment before the end of the
term of his employment in breach of the employment agreement or in the event
Mr. Vierra was terminated "for cause" (as defined in the employment agreement)
by the Company), Mr. Vierra would not be connected with any entity in any
manner, as defined in the agreement, which competes in a material respect with
the business of the Company or any of the Company's or TCI's majority owned
subsidiaries. The agreement provided, however, that Mr. Vierra could own
securities of any corporation listed on a national securities exchange or
quoted on Nasdaq to the extent of an aggregate of 5% of the amount of such
securities outstanding. As a party to the employment agreement, TCI agreed to
provide to Mr. Vierra certain benefits thereunder; however, any payment or
expense incurred by TCI under the employment agreement was to be reimbursed to
TCI by the Company under the terms of the Services Agreement between TCI and
the Company. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS--TRANSACTIONS
WITH TCI AND OTHERS--Services Agreement" below.

Employment Agreement with Mr. Evans. Mr. Evans commenced employment as the
Company's President and Chief Operating Officer effective September 1, 1997,
and as the Company's Chief Executive Officer in January 1998, pursuant to the
terms of an employment agreement with the Company. The employment agreement
provides for a base salary of $600,000 per annum. Such salary is subject to
annual review by the Company's Board of Directors, which may, in its sole
discretion, increase Mr. Evans' salary. In addition, Mr. Evans will receive an
annual bonus of $200,000 payable in two equal installments on February 1 and
September 1 of each year, commencing February 1, 1998. The employment
agreement allows for discretionary bonuses as well.

Pursuant to the terms of the employment agreement, the Company issued to Mr.
Evans on September 1, 1997, $500,000 of its Series A Stock (30,075 shares) and
will issue to Mr. Evans on each of the next four successive anniversaries of
such issuance an additional $500,000 of its Series A Stock. On September 1,
1997, the Company also granted Mr. Evans options to purchase 450,000 shares of
its Series A Stock with an exercise

23
<PAGE>

price of $14.625 per share. Such options have been granted pursuant to the
terms of the 1995 Plan and vest evenly over the next five years. At such time
as Mr. Evans relocates to Denver, Colorado, the Company will reimburse Mr.
Evans for his reasonable relocation expenses. The agreement allows Mr. Evans
to be based in Los Angeles, California until August 31, 1999, at which time he
will be based at the Company's principal offices. While he is employed by the
Company pursuant to his employment agreement, Mr. Evans is entitled to
participate in all formal incentive compensation plans, stock incentive plans,
employee stock purchase plans, retirement plans and insurance plans or
policies adopted for the benefit of the Company's or TCI's executive officers
or employees generally.

Mr. Evans' employment agreement terminates on August 31, 2002. The
employment agreement provides that upon an earlier termination of Mr. Evans'
employment by the Company without cause, all remaining compensation due under
such agreement for the balance of the employment term would become immediately
due and payable to Mr. Evans. Upon his death during the employment term, the
Company would pay to Mr. Evans' beneficiaries all compensation accrued to the
date of death. In the event of his disability, the Company would continue to
pay Mr. Evans his annual salary as and when it would have otherwise become due
until the first to occur of the end of the employment term or the date of his
death.

Mr. Evans' employment agreement provides further that during the term of his
employment with the Company, Mr. Evans will not be connected with any entity
in any manner, which directly competes in a material respect with the business
of the Company or any of its majority-owned subsidiaries. Mr. Evans may,
however, own securities of any corporation listed on a national securities
exchange or quoted on Nasdaq to the extent of an aggregate of 5% of the amount
of such securities outstanding.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Company's Board of Directors is
responsible for determining executive compensation policies and guidelines.
Messrs. Gould, Kern and Malone constitute the Compensation Committee. Dr.
Malone is the Chairman of the Board of the Company and the Chairman of the
Board and Chief Executive Officer of TCI. He is not an officer of any of the
Company's subsidiaries. Neither Mr. Gould nor Mr. Kern are, or have been at
any time, officers of the Company or any of its subsidiaries. Mr. Gould and
Mr. Kern, however, are directors of TCI, and Mr. Gould is a member of the TCI
Board Compensation Committee. In addition, Mr. Kern is a director of TCI and
special counsel with the law firm of Baker & Botts, L.L.P., the principal
outside counsel for the Company and TCI.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

Neither the report of the Compensation Committee of the Board of Directors
(the "Compensation Committee") nor the stock performance graph which follows
such report shall be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended, or under the Securities Exchange Act of
1934, as amended, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.

Compensation Philosophy. Consistent with the compensation philosophy
applicable when the Company was a wholly owned subsidiary of TCI, and
continuing that philosophy, the Compensation Committee believes that a link
should exist between executive compensation and the return on investment
provided to stockholders as reflected by the appreciation in the price of the
Company's Common Stock. In applying this philosophy, the Compensation
Committee has developed and implemented a compensation policy which seeks to
attract and retain highly skilled and effective executives with the business
experience and acumen necessary to achievement of the long-term business
objectives of the Company and to align the financial interest of the Company's
senior executives with those of its stockholders. The Company attempts to
realize these goals by providing competitive compensation and linking a
substantial portion of compensation to the enhancement of stockholder value.

24
<PAGE>

The Company's executive compensation is based principally on two
components--salary and equity based incentives--each of which is intended to
serve the Company's overall compensation philosophy. Generally, the Company
does not pay cash bonuses to its senior executives.

Base Salary. Base salary for executive officers is generally targeted at or
below the median for executives with comparable qualifications, experience and
responsibilities of other companies in the media industry. In the aggregate,
executive salaries are consistent with this philosophy. Base salary levels are
also based on the employee's relative level of seniority and responsibility.

During 1995, the Compensation Committee of TCI (the "TCI Compensation
Committee") undertook a review of the compensation paid to its key employees,
including present employees of the Company, and retained independent
consultants to advise it in connection with setting base salaries. The
consultants provided TCI, the TCI Compensation Committee and the Compensation
Committee with surveys of base salaries, bonuses and long-term incentive
compensation packages of the chief executive officers and certain other senior
officers in the media industry, including seven companies with international
operations in the cable television industry and approximately 80 companies in
various other industries. The TCI Compensation Committee then established
salary levels for the executive officers of the Company while the Company was
still wholly owned by TCI.

During 1997, the Compensation Committee established new salary levels for
certain of its executive officers (including Mr. Vierra, the Chief Executive
Officer at that time) at the median of the annual salaries and bonuses of
officers in comparable positions and in companies included in the survey. In
connection with the Compensation Committee's assessment of the appropriate
base salary levels for its executives, the Compensation Committee took into
account the employment agreement between Mr. Vierra and the Company and TCI
with a stated termination date of December 31, 1998, which agreement
established a minimum base salary and participation in certain incentive,
retirement and insurance plans or policies adopted for the benefit of the
Company's or TCI's executive officers or employees generally. Certain terms of
the employment agreement with Mr. Vierra are described under "EMPLOYMENT
CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS" above.
The Compensation Committee determined that the increase in the salary paid to
Mr. Vierra in the fourth quarter of 1997 was competitive with salaries paid to
similarly situated senior executive officers in the media industry. The
Compensation Committee also determined that the salaries paid to its other
executive officers, including named executive officers and executive officers
who had not been employed by the Company prior to 1997, were necessary to
attract and retain such executive officers and reflect the responsibilities
assigned to such officers and their expected contributions to the Company.

Equity-Based Incentives. In order to make the overall compensation packages
of the Company's executives and other key employees competitive with other
companies in the media industry, the Compensation Committee has emphasized
equity-based incentives rather than salary and bonuses. The Compensation
Committee believes that reliance upon such incentives is advantageous to the
Company because they foster a long-term commitment by the recipients to the
Company and motivate the recipients to seek to improve the long-term market
performance of the Series A Stock. During 1997, the Compensation Committee
reviewed the long-term, equity based compensation of certain of its senior
officers and determined that additional grants of stock options with tandem
SARs and restricted stock would be in the long-term best interests of the
Company.

As a result of such review, in 1997, the Compensation Committee authorized
the grant of 150,000 restricted shares of Series A Stock to Mr. Vierra based
upon the improved financial performance of the Company and Mr. Vierra's
extraordinary contribution to the Company to bring about such performance. The
aggregate number of shares of Series A Stock covered by such grant represent
less than 0.01% of the total number of shares of Series A Stock outstanding.
In addition, the Compensation Committee authorized the grants to other senior
officers and key employees of the Company stock options in tandem with SARs.
The stock options in tandem with SARs and the restricted stock awards are more
fully described in "EXECUTIVE COMPENSATION--Summary Compensation Table of the
Company" and "EXECUTIVE COMPENSATION--Option and SAR Grants Table" above.

25
<PAGE>

The Company made the above-described grants after a review of the exercise
prices, numbers and dates of the awards of the stock options, tandem SARs, and
restricted stock already held by the Company's executives and other key
employees. The Compensation Committee based its grants for 1997 in part upon
the level of the executive or other key employee's responsibilities,
experience and expertise and the degree to which such person is in a position
to contribute to the achievement or advancement of the Company's financial and
strategic objectives. In addition, such awards are consistent with the
Company's philosophy of providing equity-based, long-term incentives to senior
management for the purposes of retaining talented management, and for the
purpose of aligning management's financial interest with stockholders.

Deductibility of Executive Compensation. Section 162(m) of the Internal
Revenue Code of 1986, as amended, and the U.S. Treasury Regulations relating
to the Code (collectively, the "Code") restrict publicly traded companies from
claiming or receiving a tax deduction on compensation paid to an executive
officer in excess of $1 million, unless such compensation is performance
based. As a result, many companies with executive pay levels exceeding the $1
million limit have revised or amended current compensation programs to qualify
the payments thereunder for deductibility. The 1995 Plan has been established
in a manner which permits the Compensation Committee to make certain awards
that are not subject to this limitation. In making awards under the 1995 Plan,
the Compensation Committee will consider the implications of Section 162(m).

COMPENSATION COMMITTEE

Paul A. Gould
Jerome H. Kern
John C. Malone

26
<PAGE>

STOCK PERFORMANCE GRAPH

The following graph compares the percentage change in the cumulative total
stockholder return (assuming reinvestment of dividends) on the Series A Stock
with the cumulative total return on the Nasdaq Composite Index (U.S. and
Foreign) and a peer group of companies based on the Nasdaq Telecommunications
Stock Index. The graph assumes that the value of the investment in Series A
Stock and each index was $100 on July 18, 1995. The Company has not paid any
cash dividends on the Series A Stock and does not expect to pay dividends for
the foreseeable future. The stockholder return performance graph below is not
necessarily indicative of future performance.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG NASDAQ TELECOMMUNICATIONS STOCK INDEX,
NASDAQ COMPOSITE (US & FOREIGN) AND SERIES A STOCK

PERFORMANCE GRAPH APPEARS HERE

<TABLE>
<CAPTION>
Measurement Period TELE-COMMUN NASDAQ NASDAQ
(Fiscal Year Covered) INTL INC TELECOMM COMPOSITE
- --------------------- ----------- -------- ---------
<S> <C> <C> <C>
Measurement Pt- 7/18/95 $100.00 $100.00 $100.00
FYE 12/95 $142.19 $106.27 $104.92
FYE 12/96 $ 82.81 $108.65 $128.48
FYE 12/97 $112.50 $158.93 $157.91
</TABLE>

27
<PAGE>

COMPENSATION OF DIRECTORS

The standard arrangement by which the Company's directors are compensated
for all services (including any amounts payable for committee participation or
special assignments) as a director is as follows: each director receives a fee
of $500, plus travel expenses, for attendance at each meeting of the Board of
Directors and each director who is not a full-time employee of the Company
receives additional compensation of $30,000 per year. During 1997, such
additional compensation was waived by the non-employee directors who were
employees of TCI.

On April 11, 1996, the Company made grants of stock options for 50,000
shares of Series A Stock to each of the then nonemployee directors of the
Company (Messrs. Akiyama, Gould, Kern, Lescure and Malone) under the 1996
Nonemployee Director Stock Option Plan. Such options have an exercise price of
$16.00 per share (which was the initial public offering price of the Series A
Stock on July 18, 1995) and vest and become exercisable over a five-year
period, commencing on April 11, 1996, and will expire on April 11, 2006. Mr.
Akiyama, a former director of the Company, waived his right to receive such
options, which were then canceled.

Each person who becomes a director of the Company and is not an employee of
the Company or any of its subsidiaries will be automatically granted similar
options upon such person becoming a director pursuant to the terms of the
Company's 1996 Nonemployee Stock Option Plan. Additionally, each person who is
an employee and director of the Company who ceases to be an employee of the
Company but remains a director of the Company will be automatically granted
similar options upon such event. The exercise price of each such subsequently
granted option will be equal, however, to the fair market value of the Series
A Stock on the date the option is granted. In general, such fair market value
will be 95% of the last sale price for the shares of the Series A Stock as
reported on Nasdaq on the date of grant, with the price resulting from such
percentage rounded down to the nearest quarter dollar.

There are no other arrangements whereby any of the Company's directors
received compensation for services as a director during 1997 in addition to or
in lieu of that specified by the aforementioned standard arrangement.

BOARD MEETINGS

During 1997, the Board of Directors of the Company had three meetings.
Except for Messrs. Akiyama and Lescure, no director attended fewer than 75% of
the meetings of the Board of Directors or of any committee of which he is a
member.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors has an Audit Committee, a Compensation
Committee and an Executive Committee. There is no standing nomination
committee of the Company's Board of Directors.

The members of the Audit Committee are Messrs. Gould and Lescure. The duties
of the Audit Committee are to review and monitor the Company's financial
reports and accounting practices to ascertain that they are within acceptable
limits of sound practice, to receive and review audit reports submitted by the
Company's independent auditors and by its internal auditing staff and to make
such recommendations to the Board as may seem appropriate to the Audit
Committee to assure that the interests of the Company are adequately protected
and to review all related party transactions and potential conflict-of-
interest situations. The Audit Committee of the Company held no meetings
during 1997.

The members of the Compensation Committee are Messrs. Gould, Kern and
Malone. The functions of the Compensation Committee are to review and make
recommendations to the Board of Directors concerning the compensation of the
executive officers of the Company, to consider and make recommendations to the
Board of Directors concerning existing and proposed employment agreements
between the Company and its executive

28
<PAGE>

officers and to administer the 1995 Plan. The Compensation Committee of the
Company held one meeting during 1997.

The members of the Executive Committee are Messrs. Evans, Gould, and Malone.
The Executive Committee exercises all of the powers and authority of the Board
of Directors between meetings of the entire Board of Directors, other than
such powers and authority as the Delaware General Corporation Law specifically
prohibits an executive committee from performing. The Executive Committee took
all action by unanimous written consent and therefore held no meetings during
1997.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH MANAGEMENT

Consulting Agreement with Mr. Vierra. Effective January 1, 1998, TCI entered
into a five year consulting agreement with Mr. Vierra for Mr. Vierra to
provide consulting services to TCI on the allocation of TCI's resources and
other matters generally and with respect to the international operations of
TCI in particular. Mr. Vierra will not be required to provide more than 700
hours per year in such consulting services. For such consulting services, the
consulting agreement provides for a fee of $700,000 per annum. Pursuant to the
agreement, a portion of such consulting fee will be deferred at an annual rate
of approximately $250,000 per annum. The deferred amounts will be paid in
monthly installments over a 240-month period commencing on the later of the
first business day of the first full calendar month following December 31,
2002, and the termination of Mr. Vierra's position as a consultant to TCI,
together with interest thereon at the rate of 8% per annum, compounded
annually, from the date of deferral to the payment date. In the event of Mr.
Vierra's death, all outstanding deferred amounts will be paid in a lump sum to
his beneficiaries.

While Mr. Vierra is a consultant to TCI pursuant to the agreement, he is
entitled to participate in all insurance plans or policies adopted for the
benefit of TCI's employees. The consulting agreement provides that all options
for TCI common stock and the Company Common Stock held by Mr. Vierra are now
vested in full. In addition, restricted stock awards for the Common Stock
shall vest upon the expiration of the terms provided by the agreements
evidencing their respective grants.

Upon termination of the consulting agreement by TCI, TCI will pay all
remaining compensation due under the agreement for the balance of the term of
the agreement. Upon Mr. Vierra's death during the term of the consulting
agreement, TCI will pay to Mr. Vierra's beneficiaries a lump sum in an amount
equal to one year's compensation amount. The consulting agreement provides
further that, during the term of the agreement, Mr. Vierra will not be
connected in any manner with any entity which directly competes in a material
respect with the business of TCI or any of its majority-owned subsidiaries,
which includes the Company. Mr. Vierra may, however, own securities of any
corporation listed on a national securities exchange or quoted on Nasdaq to
the extent of an aggregate of 5% of the amount of such securities outstanding.
In addition, Mr. Vierra may provide consulting services to others if approved
by TCI's chief executive officer.

Employment Agreement with Mr. Evans. As of August 1, 1997, the Company
entered into a five year employment agreement with Mr. Evans, which commenced
September 1, 1997. The terms of this employment agreement are described under
"CONCERNING MANAGEMENT--EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND
CHANGE OF CONTROL AGREEMENTS" above.

Other Transactions. On September 1, 1997, the Company issued 30,075 shares
of Series A Stock (valued at $500,000 based upon a price per share of $16.63)
to David Evans. For more information on this issuance, see "CONCERNING
MANAGEMENT--EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF
CONTROL AGREEMENTS" above. On January 15, 1998, Mr. Evans sold 12,200 of such
shares to the Company for $201,300 ($16.50 per share). The closing market
price of the Series A Stock on Nasdaq on such date was $17.68 per share.

29
<PAGE>

TRANSACTIONS WITH TCI AND OTHERS

Relationship with TCI. TCI beneficially owns 86,250,000 shares of Series A
Stock and 11,700,000 shares of Series B Stock which, at December 31, 1997,
collectively represented approximately 92% of the total voting power of the
outstanding shares of Common Stock. Consequently, TCI has significant
influence over the policies and affairs of the Company and is in a position to
determine the outcome of corporate actions requiring stockholder approval,
including the election of directors, the adoption of amendments to the
Company's Charter and the approval of mergers and the sale of all or
substantially all of the Company's assets.

TCI formed the Company during the fourth quarter of 1994 and the first
quarter of 1995 through the contribution to the Company of substantially all
of TCI's international cable television and telephony assets and certain of
TCI's international programming assets. The international programming assets
that TCI did not contribute to the Company remained in two of TCI's other
subsidiaries, Liberty Media Corporation ("Liberty") and TCIC. The
international programming assets that currently remain with Liberty are those
that are either (i) devoted to foreign sports programming or (ii) owned
directly or indirectly (in whole or in part) by U.S.-based programming
companies in which Liberty has an interest. During 1996, Liberty contributed
its interests in foreign sports programming to a limited liability company
owned in equal parts by subsidiaries of the Company and Liberty, Liberty/TINTA
LLC ("Liberty/TINTA"). Liberty/TINTA then contributed such assets to a newly
formed sports programming venture with the News Corporation Limited ("News
Corp."). See "Sports Programming Venture" below.

In September 1997, TCI issued the Ventures Group Common Stock in the
Exchange Offer with the intent that such stock would reflect the separate
performance of the TCI Ventures Group. The TCI Ventures Group includes TCI's
principal international assets, including TCI's equity interest in the
Company, and substantially all of TCI's non-cable and non-programming domestic
assets. With the formation of the TCI Ventures Group, TCI assigned to Ventures
LLC various agreements, rights and obligations related to TCI's assets
attributed to the TCI Ventures Group. Such assignments included transferring
all of TCI's equity interests in the Company to Ventures LLC and financial
obligations with the Company to Ventures LLC. See "Credit Facility" and "Loans
Pursuant to Unsecured Promissory Notes" below.

TCI has advised the Company that TCI presently intends (i) to make available
to the Company any opportunity to acquire, develop, own and/or manage cable
and/or telephony operations outside the United States presented to TCI or any
of its controlled affiliates, and (ii) except as provided below, to make
available to the Company any opportunity to acquire, develop, manage and/or
operate programming services outside of the United States (a "Programming
Opportunity") presented to TCI or any of its controlled affiliates. The
foregoing does not apply to: (i) international programming services owned or
managed, directly or indirectly (in whole or in part), by TCI or any of its
controlled affiliates other than the Company as of July 12, 1995 (the date of
the Company's initial public offering); (ii) international programming
opportunities under development by TCI or any of its controlled affiliates
other than the Company, which were the subject of a signed letter of intent or
other agreement in principle as of July 12, 1995; (iii) Programming
Opportunities with respect to foreign sports programming, which is expected to
be pursued by Liberty/TINTA and made available to a joint venture in which
Liberty/TINTA owns a 50% interest (see "Sports Programming Venture" below);
(iv) any Programming Opportunity presented to a public company, which is a
controlled affiliate of either TCI or any of TCI's controlled affiliates
(other than the Company); (v) any Programming Opportunity presented to, or
cable television or cable telephony services provided by, any company or other
entity in which TCI or any of its controlled affiliates has an interest but
which is not itself a controlled affiliate of either TCI or any of TCI's
controlled affiliates; and (vi) the distribution outside the United States of
a programming service initially distributed within the United States and owned
and/or managed by TCI or any of its controlled affiliates (other than the
Company). If the Company determines not to pursue a Programming Opportunity,
subsidiaries or controlled affiliates of TCI other than the Company may pursue
such Programming Opportunity or the Company and another subsidiary of TCI (or
any of its other controlled affiliates) may pursue such opportunity jointly.
Neither TCI nor any of its controlled affiliates will make available to the
Company any Programming Opportunity if TCI or such controlled affiliate is
legally (for example, by a fiduciary duty owed to others) or contractually
prohibited from taking such

30
<PAGE>

action. The foregoing policy concerning Programming Opportunities will, in any
event, be terminable at such time as TCI ceases to beneficially own at least a
majority in voting power of the outstanding Common Stock of the Company.

The above policy of TCI can be modified or rescinded by TCI in its sole
discretion, without approval of the Company, although TCI has informed the
Company it has no present intention to do so. TCI can also adopt additional
policies with respect to the Company depending upon future circumstances. TCI
has informed the Company that any determination it might make to modify or
rescind its policy with respect to the Company, or to adopt additional
policies affecting the Company, would be made by the TCI Board, which has a
duty to act with due care and in the best interests of all the stockholders of
TCI.

TCI and the Company have entered into a number of intercompany agreements
more fully described below, covering matters such as lending arrangements,
indemnification, the provision of services, tax sharing, the use of the Tele-
Communications name and registration rights. TCI also provides certain
administrative, financial, legal, treasury, accounting, tax and other services
to the Company and makes available certain of its employee benefit plans to
the Company's employees. TCI established the terms of these arrangements in
consultation with the Company, but TCI and the Company executed the
arrangements while the Company was a wholly owned subsidiary. As a result,
such arrangements are not the result of arm's-length negotiations.
Accordingly, although the Company believes the terms of these arrangements are
reasonable, no assurance can be given that the terms and conditions of these
agreements, or the terms of any future arrangements between TCI and the
Company, are or will be as favorable to the Company as could be obtained from
unaffiliated third parties.

Sports Programming Venture. In April 1996, Liberty/TINTA formed a joint
venture with News Corp. ("Fox Sports International") to operate existing
sports services in Latin America and Australia and a variety of new sports
services throughout the world, excluding the United States, Canada and certain
other defined geographical areas. The Company and Liberty each owns a 50%
interest in Liberty/TINTA. Liberty/TINTA, in turn owns a 50% interest in Fox
Sports International, with News Corp. owning the other 50% interest.
Liberty/TINTA contributed to Fox Sports International the non-cash assets
contributed to it by the Company and Liberty. News Corp. contributed various
international sports rights and certain trademark rights in exchange for its
50% interest in Fox Sports International.

As part of the formation of Fox Sports International, Liberty/TINTA is
entitled to receive from News Corp. 7.5% of the outstanding stock of STAR
Television Limited. Upon the delivery of such stock to Liberty/TINTA, News
Corp. is entitled to receive from Liberty/TINTA up to $20 million and rights
under various Asian sports programming agreements. STAR Television Limited
operates a satellite-delivered television platform in Asia.

The agreement with News Corp. includes, among other things, provisions
generally prohibiting any of the parties from engaging in any business that is
within the scope of the business to be conducted by Fox Sports International
(other than through Fox Sports International), that being the operation of
programming services featuring predominantly sports and sports-related
programming, data or content for distribution by any means and in any form
anywhere in the world, except in the excluded areas referred to above. Those
restrictions will be binding on TCI until such time as neither the Company nor
Liberty is controlled by TCI. The agreement with News Corp. also includes
provisions granting to a separate joint venture to be formed by Liberty and
Fox Inc. (a wholly-owned subsidiary of News Corp.) rights of first refusal
with respect to international sports programming as to which Fox Sports
International holds United States or Canadian distribution rights.

Prior to November 1, 2000, News Corp. and Liberty/TINTA cannot transfer
their interests in Fox Sports International other than to certain of their
respective affiliates. Thereafter, any proposed transfer to a non-affiliate
will be subject to a right of first refusal in favor of the non-transferring
member. Transfers to affiliates will not be subject to those transfer
restrictions or rights of first refusal. In certain events, either member of
Fox Sports International will have the right to trigger a procedure under
which the other member will be required either to purchase the triggering
member's interest or to sell its interest to the triggering member, in either
case, at the price stated by the triggering member. Those buy/sell rights will
arise if, at any time after the fifth anniversary

31
<PAGE>

of the formation of Fox Sports International, the members cannot agree for two
consecutive years on the approval of an annual budget or the appointment of a
chief executive officer for Fox Sports International. If control of
Liberty/TINTA is acquired by any one of certain named media industry
participants, then News Corp. will have an option to purchase the interest in
Fox Sports International held by Liberty/TINTA at a price equal to the fair
market value of such interest. The agreement governing the formation of
Liberty/TINTA includes restrictions on transfers of interests and buy/sell
rights applicable to Liberty/TINTA interests of the Company and Liberty, which
are substantially the same as those applicable to the interests in Fox Sports
International.

During third quarter 1997, Fox Sports International distributed its 35%
equity interest in Torneos y Competencias S.A. ("Torneos") to Liberty/TINTA
and certain Australian sports rights to News Corp. On October 2, 1997, the
Company purchased an additional 5% interest in Torneos from an unaffiliated
party for $12 million. In addition, as of December 31, 1997, the Company had
made cash contributions to Torneos on behalf of Liberty/TINTA in the aggregate
amount of $48 million. It is anticipated that Liberty's portion of such
capital calls will be repaid to the Company either in cash or other economic
consideration to be determined at a future date.

Credit Facility. The Company and TCI entered into a subordinated revolving
credit facility (the "Credit Facility"), effective April 25, 1995, which
provides for loans from TCI to the Company in an aggregate principal amount at
any time outstanding of up to $200 million (the "Commitment"). As of September
10, 1997, TCI assigned all of its rights, interests and obligations in and to
the Credit Facility to Ventures LLC. At the time of such assignment, no
borrowings were outstanding under the Credit Facility. In connection with the
assignment, the parties agreed to extend the maturity date of the Credit
Facility to September 10, 2002, at which time all borrowings under the Credit
Facility, together with all accrued interest thereon, will be payable. In
addition, the parties reduced the interest rate on the Credit Facility from
13% to 10% per annum. Prior to such maturity date, borrowings repaid by the
Company under the Credit Facility will be available for re-borrowing, subject
to certain conditions to borrowing.

During 1997, no borrowings were outstanding under the Credit Facility.
Accordingly, the Company incurred no interest expense during the year ended
December 31, 1997, with respect to the Credit Facility.

The Company is required to pay an annual facility fee in an amount equal to
.375% of the unused borrowing availability under the Credit Facility. Such
credit facility fee aggregated $750,000 during the year ended December 31,
1997.

The payment of the principal of and interest on all borrowings under the
Credit Facility are subordinated in right of payment to the prior payment in
full of all "Senior Indebtedness." Senior Indebtedness is defined, generally,
as all indebtedness of the Company for money borrowed, obligations of the
Company in respect of letters of credit or bankers' acceptances and
indebtedness issued as part of the deferred purchase price of property, except
any such indebtedness that by the terms of the instrument creating or
representing such indebtedness is expressly made equal in right of payment
with, or subordinate and subject in right of payment to, borrowings
outstanding under the Credit Facility. If the Company incurs Senior Debt
(defined generally as indebtedness for money borrowed from institutional
lenders) in a principal amount in excess of $200 million (such excess, the
"Senior Excess Amount"), the Commitment will be immediately reduced by the
amount of such Senior Excess Amount. In such event, outstanding loans under
the Credit Facility in a principal amount necessary to cause such outstanding
loans to not exceed the amount of the Commitment, as so adjusted, together
with accrued interest, will immediately become due and payable. The Commitment
may be readjusted upward (but not above $200 million) to the extent that such
Senior Excess Amount is subsequently repaid by the Company. Borrowings under
the Credit Facility are unsecured.

If, at any time, TCI shall beneficially own capital stock of the Company
representing less than a majority in voting power of the outstanding shares of
the Company capital stock entitled to vote for the election of directors,
Ventures LLC may terminate its obligation to make further loans under the
Credit Facility upon two business

32
<PAGE>

days prior notice to the Company. The principal of and interest on all
outstanding loans shall become due and payable on the first anniversary of the
receipt by the Company of such notice.

Loans Pursuant to Unsecured Promissory Notes. At December 31, 1997, amounts
loaned by the Company to Ventures LLC pursuant to an unsecured promissory note
aggregated $89 million. Under the terms of such note, Ventures LLC can borrow
in an aggregate amount of up to $200 million. Amounts outstanding under this
promissory note bear interest at variable rates (6.7% at December 31, 1997)
based on TCI's weighted average cost of bank borrowings of similar maturities,
and principal and interest is due and payable as mutually agreed from time to
time by Ventures LLC and the Company. During the year ended December 31, 1997,
interest income related to the promissory note aggregated $5.8 million.

Intercompany Accounts. The Company maintains cash and non-cash intercompany
accounts with Ventures LLC. At December 31, 1997, the non-cash intercompany
account with Ventures LLC was comprised of $12.6 million due to Ventures LLC
with respect to the Company's share of TCI's compensation liability arising
from certain SARs and stock options (as described below) and $7.7 million due
from Ventures LLC with respect to the allocation of current intercompany
income tax benefits pursuant to the Old and New Tax Sharing Agreements (as
described below). The compensation liability, which represents the Company's
share of TCI's stock compensation expense for periods subsequent to July 18,
1995, will be settled in cash only to the extent that TCI is required to make
cash payments to satisfy such liability. Amounts included in the non-cash
intercompany account are non-interest bearing.

Amounts included in the cash intercompany account with Ventures LLC are
required to be settled within 30 days following notification. Any payable
amounts that remain outstanding after such 30-day period generally are treated
as adjustments of the outstanding borrowings pursuant to the Credit Facility.
Amounts included in such cash intercompany account are non-interest bearing.
At December 31, 1997, the amount owed by the Company to Ventures LLC, pursuant
to the cash intercompany account, was $5.8 million.

Registration Rights Agreement. As of July 18, 1995, the Company and TCI
entered into a Registration Rights Agreement (the "Registration Rights
Agreement") which, among other things, provides that upon the request of TCI,
the Company will register under the Securities Act of 1933, as amended, any of
the shares of Series A Stock or Series B Stock (and any other shares of
capital stock of the Company issued in respect of such shares) held by TCI for
sale in accordance with TCI's intended method of disposition thereof. TCI has
the right to request three such registrations. The Company has agreed to pay
all registration expenses (other than underwriting discounts and commissions)
in connection with such registrations. The Registration Rights Agreement will
terminate if TCI ceases to own for five consecutive years shares of Common
Stock representing at least 30% in voting power of the outstanding shares of
capital stock of the Company entitled to vote generally in the election of
directors.

Indemnification Agreement. During 1997, TCI or certain of its subsidiaries
(other than the Company) were an obligor under, or a guarantor of the payment
or performance of, certain contractual obligations, including financial and
debt obligations, which were for the benefit of the Company. The Company
entered into an Indemnification Agreement with TCI, dated as of July 12, 1995,
pursuant to which the Company agreed to indemnify TCI (or any of TCI's
officers, directors, employees and agents) for any payment made by TCI, or any
claim, loss or liability that TCI may have otherwise incurred, by reason of
such obligations. The Company was not required to make any payments to TCI
pursuant to the Indemnification Agreement prior to the termination of such
obligations.

Services Agreement. Certain facilities, personnel and services are provided
to the Company by TCI or its subsidiaries pursuant to the terms of a services
agreement between TCI and the Company, dated as of July 18, 1995 (the
"Services Agreement"). Pursuant to the Services Agreement, TCI provides the
Company administrative and operational services necessary for the conduct of
its business, including, but not limited to, such services as are generally
performed by TCI's accounting, finance, corporate, legal and tax departments.
In addition, the Company has available to it such general overall management
services and strategic planning

33
<PAGE>

services as TCI and the Company shall agree and TCI provides the Company with
such access to and assistance from TCI's cable engineering and construction
groups and TCI's domestic cable television and programming and
technology/venture personnel as the Company may from time to time request.

The Services Agreement also provides that, for so long as TCI continues to
beneficially own shares of Common Stock representing at least a majority in
voting power of the outstanding shares of capital stock of the Company
entitled to vote generally in the election of directors, TCI will continue to
permit the Company's employees to participate in TCI's employee benefit plans.
In this regard, the Company is allocated that portion of TCI's compensation
expense attributable to benefits extended to employees of the Company.

Pursuant to the Services Agreement, the Company reimburses TCI for all
direct expenses incurred by TCI in providing services thereunder and a pro
rata share of all indirect expenses incurred by TCI in connection with the
rendering of such services, including a pro rata share of the salary and other
compensation of TCI employees performing services for the Company, general
overhead expenses and rental expenses for any physical facilities of TCI used
by the Company. In this regard, the Company subleases office space from, TCI.
The obligations of TCI to provide services under the Services Agreement (other
than TCI's obligation to allow the Company's employees to participate in TCI's
employee benefit plans) will continue in effect until terminated by either the
Company at any time on not less than 60 days' notice to TCI, or by TCI at any
time after July 18, 1998, on not less than four months' notice to the Company.

The amounts charged to the Company pursuant to the Services Agreement
aggregated $1.8 million during the year ended December 31, 1997.

Tax Sharing Agreement. The Company and its 80%-or-more-owned domestic
subsidiaries (the "TINTA Tax Group") are included in the consolidated federal
and state income tax returns of TCI. The Company's income taxes include those
items in the consolidated calculation applicable to the TINTA Tax Group
("intercompany tax allocation") and any income taxes of the Company's
consolidated foreign or domestic subsidiaries that are excluded from the
consolidated federal and state income tax returns of TCI. Intercompany tax
allocation represents an apportionment of tax expense or benefit (other than
deferred taxes) among subsidiaries of TCI in relation to their respective
amounts of taxable earnings or losses.

Effective July 1, 1995, TCI, the Company and certain other subsidiaries of
TCI implemented a tax sharing agreement (the "Old Tax Sharing Agreement"). The
Old Tax Sharing Agreement formalized certain of the elements of a pre-existing
tax sharing arrangement and contains additional provisions regarding the
allocation of certain consolidated income tax attributes and the settlement
procedures with respect to the intercompany allocation of current tax
attributes. Under the Old Tax Sharing Agreement, the Company and its
subsidiaries were responsible to TCI for their share of consolidated income
tax liabilities (computed as if TCI were not liable for the alternative
minimum tax) determined in accordance with the Old Tax Sharing Agreement, and
TCI was responsible to the Company to the extent that the income tax
attributes generated by the TINTA Tax Group were used by TCI to reduce its
consolidated income tax liabilities (computed as if TCI were not liable for
the alternative minimum tax). The tax liabilities and benefits of such
entities so determined are charged or credited to an intercompany account
between TCI and the Company. Such intercompany account is required to be
settled only upon the date that an entity ceases to be a member of TCI's
consolidated group for federal income tax purposes. Under the Old Tax Sharing
Agreement, TCI retains the burden of any alternative minimum tax and has the
right to receive the tax benefits from an alternative minimum tax credit
attributable to any tax period beginning on or after July 1, 1995, and ending
on or before October 1, 1997.

Effective October 1, 1997 (the "Effective Date"), TCI replaced the Old Tax
Sharing Agreement with a new tax sharing agreement, as so amended (the "New
Tax Sharing Agreement"), which governs the allocation and sharing of income
taxes by the TCI Group, the Liberty Media Group and the TCI Ventures Group
within TCI (each a "Group"). The Company and its subsidiaries are members of
the TCI Ventures Group for purposes of the New Tax Sharing Agreement.
Effective for periods on and after the Effective Date, federal income taxes
will be computed based upon the type of tax paid by TCI (on a regular tax or
alternative minimum tax basis) on

34
<PAGE>

a separate basis for each Group (applying provisions of the Code and related
regulations as if such Group filed a separate consolidation return for federal
income tax purposes, with certain adjustments, but was subject to the same
type of tax as TCI). Based upon these separate calculations, an allocation of
tax liabilities and benefits will be made such that each Group will be
required to make cash payments to TCI based on its allocable share of TCI's
consolidated federal income tax liabilities (on a regular tax or alternative
minimum tax basis, as applicable). TCI may be required at the times and under
the circumstances described below to make cash payments to the Group for tax
benefits (on a regular tax or alternative minimum tax basis, as applicable)
attributable to such Group and actually used by TCI in reducing its
consolidated federal income tax liability. Tax attributes and tax basis in
assets would be inventoried and tracked for ultimate credit to or charge
against each Group. Similarly, in each taxable period that TCI pays
alternative minimum tax, the federal income tax liabilities and benefits of
each Group, computed as if such Group were subject to regular tax, would be
inventoried and tracked for payment to or payment by each Group (at the
difference between the amount such Group would have paid or received under the
New Tax Sharing Agreement if TCI had paid regular tax during such taxable
period and the amount such Group paid or received under the New Tax Sharing
Agreement on an alternative minimum tax basis for such taxable period) in
years that TCI uses the alternative minimum tax credit associated with such
taxable period. Even though the tax benefits of a Group are used by TCI in
reducing its consolidated federal income tax liability, such Group may not
receive current cash payments for such benefit (or the difference between such
Group's benefits computed under the New Tax Sharing Agreement on a regular tax
basis and on an alternative minimum tax basis) if the Group against the income
of which the tax benefits are applied had other separate taxable losses (not
currently used by TCI) which would offset income attributable to such Group.
The Group generating the tax benefits used would receive a cash payment only
if, and when, the unused taxable losses of one or more of the other Groups are
actually used. If losses expire without ever being used, the Group generating
the used tax benefits will never receive payment for such benefits. Pursuant
to the New Tax Sharing Agreement, state and local income taxes are calculated
on a separate return basis for each Group (applying provisions of state and
local tax law and related regulations as if the Group were a separate unitary
or combined group for tax purposes) and TCI's combined or unitary tax
liability is allocated among the Groups based upon such separate calculation.

Notwithstanding the foregoing, items of income, gain, loss, deduction or
credit resulting from certain specified transactions that are consummated
after the Effective Date pursuant to a letter of intent or agreement that was
entered into prior to the Effective Date will be shared and allocated pursuant
to the terms of the Old Tax Sharing Agreement, as amended. Items of loss or
deduction used to offset such income or gain from such transactions for
purposes of filing TCI's consolidated federal income tax return shall be
shared and allocated pursuant to the Old Tax Sharing Agreement but reimbursed
upon the earlier to occur of the deconsolidation of the Group generating the
loss or deduction or the deconsolidation of the Group generating the
corresponding income or gains. The intercompany tax account existing between
TCI and the Company for the period beginning July 1, 1995, and ending
September 30, 1997, will be required to be settled between Ventures LLC and
the Company if and when the Company ceases to be a member of TCI's
consolidated group for federal income tax purposes. A tax sharing arrangement
between Ventures LLC and the Company covering periods subsequent to September
30, 1997, is currently being negotiated. It is expected, that the terms of
such arrangement will be substantially similar to the terms contained in the
New Tax Sharing Agreement.

During the year ended December 31, 1997, TCI allocated to the Company an
intercompany tax expense aggregating $7.5 million.

Trade Name and Service Mark License Agreement. The Company and TCI have
entered into a Trade Name and Service Mark License Agreement, dated as of July
18, 1995 (the "License Agreement"), pursuant to which TCI has granted to the
Company a non-exclusive non-assignable license to use certain trade names and
service marks specifically identified in the License Agreement. The Company
has agreed that all advertising, promotion and use of certain of TCI's trade
names and service marks by the Company shall be consistent with TCI guidelines
and standards, as well as subject to TCI's control in certain circumstances.
The term of the License Agreement terminates one year after TCI ceases to
beneficially own a majority (by voting power) of the

35
<PAGE>

outstanding shares of voting capital stock of the Company. The term may be
extended for one year upon the consent of both parties. No fees are paid by
the Company for use of this non-exclusive non-assignable license.

Other Transactions. TCI Cablevision of Puerto Rico, Inc., a wholly-owned
subsidiary of the Company (the "Puerto Rico Subsidiary"), is engaged in the
multi-channel video distribution business in Puerto Rico and purchases
programming services from a subsidiary of TCI. The charges, which approximate
such TCI subsidiary's cost and are based on the aggregate number of
subscribers served by the Puerto Rico Subsidiary, aggregated $6 million during
the year ended December 31, 1997.

Certain key employees of the Company hold stock options with tandem SARs
with respect to certain common stock of TCI as well as restricted shares of
common stock of TCI. Estimates of the compensation expense relating to the
options and SARs as well as restricted stock awards have been included in the
financial statements of the Company, but are subject to future adjustment
based upon the market value of the underlying TCI common stock, and ultimately
on the final determination of market value when the rights are exercised or
the restricted shares are vested. The estimated compensation adjustment with
respect to the options and SARs as well as restricted stock awards resulted in
an increase to the Company's share of TCI's stock compensation liability of
$12.4 million for the year ended December 31, 1997. The Company's share of
TCI's stock compensation liability will be settled in cash only to the extent
cash payments are required to satisfy such liability.

During 1996, TCIC transferred, subject to regulatory approval, certain
distribution equipment to a subsidiary of the Company in exchange for a
promissory note in the principal amount of (Pounds)14,950,000 ($23.3 million
using the applicable exchange rate), bearing interest at 7% compounded semi-
annually. The distribution equipment was subsequently leased back to TCIC over
a five year term with semi-annual payments of (Pounds)998,000 ($1.6 million),
plus expenses. Effective October 1, 1997, the parties transferred such
distribution equipment back to TCIC and canceled the note and the lease. Until
such transfer and cancellation, during the year ended December 31, 1997: (i)
the U.S. dollar equivalent of interest expense incurred with respect to the
note aggregated $1.2 million; (ii) the U.S. dollar equivalent of the lease
revenue aggregated $3.3 million; and (iii) the Company experienced unrealized
foreign currency transaction gains of $1.2 million with respect to the note.

CERTAIN BUSINESS RELATIONSHIPS

Jerome H. Kern, a director of the Company, is Special Counsel with the law
firm of Baker & Botts, L.L.P., the principal outside counsel for the Company
and TCI. Fees paid to Baker & Botts, L.L.P. by TCI and its consolidated
subsidiaries (including the Company) did not exceed 5% of such firm's gross
revenues for the 1997 fiscal year.

INDEPENDENT AUDITORS

The firm of KPMG Peat Marwick LLP serves as the Company's independent
certified public accountants. A partner of KPMG Peat Marwick LLP will be
present at the Annual Meeting with the opportunity to make a statement if KPMG
Peat Marwick LLP so desires and will be available to respond to appropriate
questions.

STOCKHOLDER PROPOSALS

Proposals by stockholders for which consideration is desired at the 1999
annual meeting of stockholders must be received by the Company by January 31,
1999, in order to be considered for inclusion in the proxy materials for the
1999 annual meeting.

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1997, AS FILED WITH THE SEC, EXCLUDING EXHIBITS, MAY BE OBTAINED
BY STOCKHOLDERS WITHOUT CHARGE BY WRITTEN REQUEST ADDRESSED TO THE INVESTOR
RELATIONS DEPARTMENT, TELE-COMMUNICATIONS INTERNATIONAL, INC., POST OFFICE BOX
5630, DENVER, COLORADO 80217-5630.

Englewood, Colorado
June 1, 1998

36
<PAGE>

TELE-COMMUNICATIONS INTERNATIONAL, INC.
POST OFFICE BOX 5630 DENVER, CO 80217

TELE-COMMUNICATIONS INTERNATIONAL, INC. SERIES A COMMON STOCK

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Stephen M. Brett, John C. Malone and Fred A.
Vierra, as Proxies, with full power to act without the other and each with the
power to appoint his substitute, and hereby authorizes them to represent and to
vote, as designated on the reverse side hereof, all the shares of the above-
referenced common stock of Tele-Communications International, Inc. (the
"Company") held of record by the undersigned on May 14, 1998, at the Annual
Meeting of the Company to be held on July 1, 1998, or any adjournment thereof.

This Proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder.

IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.

(Continued, and to be signed and dated on reverse side.)

<PAGE>

- --------------------------------------------------------------------------------

1. Election of Three Directors

FOR all nominees [_]
listed below

WITHHOLD AUTHORITY [_]
to vote for all nominees
listed below

*EXCEPTIONS [_]

Nominees: David J. Evans, Paul A. Gould and John C. Malone

(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
YOUR SHARES WILL BE CAST FOR THE OTHER NOMINEE(S).)

*Exceptions ____________________________________________________________________

2. In their discretion, the Proxies are authorized to vote upon any other
business as may properly come before the Annual Meeting.

Change of Address or Comments
Mark Here
[_]

Signature should agree with name
printed hereon. If stock is held in
the name of more than one person, each
joint owner should sign. Executors,
administrators, trustees, guardians,
and attorneys should indicate the
capacity in which they sign.

DATED: __________________________, 1998

---------------------------------------
Stockholder's Signature

VOTES MUST BE INDICATED (X) IN BLACK
OR BLUE INK [X]

PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.

- --------------------------------------------------------------------------------