EXHIBIT 3.1
 
                     RESTATED CERTIFICATE OF INCORPORATION
                                      OF
                           VIACOM INTERNATIONAL INC.
 
                               ----------------
 
  VIACOM INTERNATIONAL, INC. a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
 
    (1) The name of the Corporation is Viacom International Inc. The original
  Certificate of Incorporation of the Corporation was filed on June 2, 1987.
  The name under which the Corporation was originally incorporated was
  Arsenal Holdings II, Inc. The Certificate of Incorporation of the
  Corporation was amended on April 26, 1990.
 
    (2) This Restated Certificate of Incorporation ("Certificate") further
  amends and restates in its entirety the Certificate of Incorporation of the
  Corporation.
 
    (3) Pursuant to Sections 242 and 245 of the General Corporation Law of
  the State of Delaware, the text of the Certificate of Incorporation is
  hereby restated to read in its entirety as follows:
 
                                   ARTICLE I
 
                                     NAME
 
  The name of the Corporation is TCI Pacific Communications, Inc.
 
                                  ARTICLE II
 
                               REGISTERED OFFICE
 
  The location of the registered office of the Corporation in the State of
Delaware is the office of The Prentice-Hall Corporation System, Inc., 1013
Centre Road, Wilmington, New Castle County, Delaware 19805-1297. The name of
the registered agent at such address is The Prentice-Hall Corporation System,
Inc.
 
                                  ARTICLE III
 
                                    PURPOSE
 
  The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the Delaware General Corporation
Law.
 
                                  ARTICLE IV
 
                               AUTHORIZED STOCK
 
  The total number of shares of capital stock which the Corporation shall have
authority to issue is twenty-two million, five hundred and sixteen thousand
and twenty-two (22,516,022) shares, of which six million, two hundred and
fifty-eight thousand and sixty-one (6,258,061) shares shall be common stock
("Common Stock") and sixteen million, two hundred and fifty-seven thousand,
nine hundred and sixty-one (16,257,961) shares shall be preferred stock
("Preferred Stock"). Said shares of Common Stock and Preferred Stock shall be
divided into the following classes:
 
    (a) six million, two hundred and fifty-seven thousand, nine hundred and
  sixty-one (6,257,961) shares of Common Stock shall be of a class designated
  as Class A Common Stock with a par value of $100 per share ("Class A Common
  Stock");

 
    (b) One hundred (100) shares of Common Stock shall be of a class
  designated as Class B Common Stock with a par value of $0.01 per share
  ("Class B Common Stock");
 
    (c) six million two hundred and fifty-seven thousand, nine hundred and
  sixty-one (6,257,961) shares of Preferred Stock shall be of a class
  designated as Class A Senior Cumulative Exchangeable Preferred Stock with a
  par value of $100 per share ("Class A Preferred Stock"); and
 
    (d) ten million (10,000,000) shares of Preferred Stock shall be of a
  class designated as Series Preferred Stock with a par value of $0.01 per
  share ("Series Preferred Stock").
 
  The description of the Common Stock and the Preferred Stock of the
Corporation, and the relative rights, preferences and limitations thereof, or
the method of fixing and establishing the same, are as hereinafter in this
Article IV set forth:
 
                                   SECTION A
 
                                 COMMON STOCK
 
  Each share of Class A Common Stock and each share of Class B Common Stock of
the Corporation shall, except as otherwise provided in this Section A, be
identical in all respects and shall have equal rights and privileges.
 
  (1) VOTING RIGHTS. Holders of Class A Common Stock and holders of Class B
Common Stock shall each be entitled to one vote for each share of such stock
held, on all matters presented to such stockholders. Except as may otherwise
be required by the laws of the State of Delaware, the holders of shares of
Class A Common Stock and the holders of shares of Class B Common Stock shall
vote as one class with respect to the election of directors and with respect
to all other matters to be voted on by stockholders of the Corporation
(including, without limitation, any proposed amendment to this Certificate
that would increase the number of authorized shares of Class A Common Stock,
of Class B Common Stock or of any other class or series of stock or decrease
the number of authorized shares of any such class or series of stock (but not
below the number of shares thereof then outstanding)), and no separate vote or
consent of the holders of shares of Class A Common Stock or the holders of
shares of Class B Common Stock shall be required for the approval of any such
matter.
 
  (2) CONVERSION RIGHTS.
 
  (a) Class A Common Stock. Upon the Conversion Time (as defined below), (i)
each share of Class A Common Stock shall automatically convert into and
represent one share of Class A Preferred Stock and (ii) the shares of Class A
Common Stock so converted shall be restored to the status of authorized but
unissued shares of Class A Common Stock. Shares of Class A Common Stock that
are issued after the Conversion Time shall not be convertible into shares of
Class A Preferred Stock, nor shall they be convertible into any other class or
series of capital stock of the Corporation. Each share of Class A Preferred
Stock into which a share of Class A Common Stock shall have been converted
shall be deemed to have been issued at the opening of business on the date on
which the Conversion Time occurs. As used in this Certificate, the term
"Conversion Time" means the time at which shares of Class B Common Stock are
issued to, and paid for by, TCI Communications, Inc, a Delaware corporation
("TCI Sub"), pursuant to the terms of that certain Subscription Agreement,
dated as of July 24, 1995, among the Corporation, TCI Sub and Tele-
Communications, Inc., a Delaware corporation.
 
  (b) Class B Common Stock. The Class B Common Stock is not convertible into
the Class A Preferred Stock, nor shall it be convertible into any other class
or series of capital stock of the Corporation.
 
  (3) DIVIDENDS. Whenever a dividend is paid to the holders of Class A Common
Stock, the Corporation also shall also pay to the holders of Class B Common
Stock a dividend per share equal to the dividend per share
 
                                       2

 
paid to the holders of the Class A Common Stock, and whenever a dividend is
paid to the holders of Class B Common Stock, the Corporation also shall also
pay to the holders of Class A Common Stock a dividend per share equal to the
dividend per share paid to the holders of the Class B Common Stock. Dividends
shall be payable only as and when declared by the Board of Directors.
 
  (4) LIQUIDATION AND DISSOLUTION. In the event of a liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, after
payment or provision for payment of the debts and liabilities of the
Corporation and subject to the prior payment in full of the preferential
amounts to which any Preferred Stock is entitled, the holders of Class A
Common Stock and the holders of Class B Common Stock shall share ratably per
share in the assets of the Corporation remaining for distribution to its
common stockholders.
 
                                   SECTION B
 
            CLASS A SENIOR CUMULATIVE EXCHANGEABLE PREFERRED STOCK
 
  The Class A Senior Cumulative Exchangeable Preferred Stock shall have the
following preferences, limitations and relative rights:
 
  (1) CERTAIN DEFINITIONS. Unless the context otherwise requires, the terms
defined in this paragraph (1) shall have, for all purposes of this Certificate
of Designations, the meanings herein specified:
 
  "Affiliate" shall mean any Person that directly or indirectly through one or
more intermediaries controls, is controlled by or is under common control with
the Corporation.
 
  "Average Market Price" as of any Record Date or Redemption Date shall mean
the average of the daily Closing Prices for the period of ten consecutive
Trading Days ending on the third Trading Day preceding such Record Date or
Redemption Date, respectively, appropriately adjusted in such manner as the
Board of Directors in good faith deems appropriate to take into account any
stock dividend on the Series A TCI Group Common Stock, or any subdivision,
split, combination or reclassification of the Series A TCI Group Common Stock
that occurs, or the Ex-Dividend Date for which occurs, during the period
following the first Trading Day in such ten-Trading Day period and ending on
the last full Trading Day immediately preceding the Dividend Payment Date to
which such Record Date relates or such Redemption Date, respectively.
 
  "Board of Directors" shall mean the Board of Directors of the Corporation,
and, unless the context indicates otherwise, shall also mean, to the extent
permitted by law, any committee thereof authorized, with respect to any
particular matter, to exercise the power of the Board of Directors of the
Corporation with respect to such matter.
 
  "Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in The City of New York, New York are authorized or
obligated by law or executive order to close.
 
  "Cash Equivalent Amount" shall mean an amount equal to 95% of the Average
Market Price per share of Series A TCI Group Common Stock, such Average Market
Price to be determined (i) in the case of a dividend payment, as of the
related Record Date and (ii) in the case of a redemption payment, as of the
related Redemption Date.
 
  "Closing Price" shall mean, on any day, (i) the last sale price (or, if no
sale price is reported on that day, the average of the bid and asked prices)
of a share of Series A TCI Group Common Stock on the Nasdaq National Market on
such day, or (ii), if the primary trading market for the Series A TCI Group
Common Stock is not the Nasdaq National Market, then the closing sale price
regular way on such day, or, in case no such sale takes place on such day, the
reported closing bid price regular way on such day, in each case on the New
York Stock Exchange or, if the Series A TCI Group Common Stock is not listed
or admitted to trading on such Exchange, then on the principal exchange on
which such stock is traded, or (iii) if the Closing Price on such day is not
available pursuant to one of the methods specified above, then the average of
the bid and asked prices for the Series A TCI Group Common Stock on such day
as furnished by any New York Stock Exchange member firm selected from time to
time by the Board of Directors for that purpose.
 
                                       3

 
  "Convertible Securities" shall mean rights, options, warrants and other
securities which are exercisable or exchangeable for or convertible into
shares of capital stock at the option of the holder thereof. As used herein,
Convertible Securities for shares of Series A TCI Group Common Stock do not
include the Series B TCI Group Common Stock (whether or not at the time in
question the Series B TCI Group Common Stock is convertible into shares of
Series A TCI Group Common Stock).
 
  "Current Market Price," on the Determination Date for any issuance of
rights, warrants or options or any distribution in respect of which the
Current Market Price is being calculated, shall mean the average of the daily
Closing Prices of the Series A TCI Group Common Stock for the shortest of:
 
    (a) the period of 30 consecutive Trading Days commencing 45 Trading Days
  before such Determination Date,
 
    (b) the period commencing on the date next succeeding the first public
  announcement of the issuance of rights, warrants or options or the
  distribution in respect of which the Current Market Price is being
  calculated and ending on the last full Trading Day before such
  Determination Date, and
 
    (c) the period, if any, commencing on the date next succeeding the Ex-
  Dividend Date with respect to the next preceding issuance of rights,
  warrants or options or distribution for which an adjustment is required by
  the provisions of subparagraph (5)(b)(i)(D), (ii) or (iii), and ending on
  the last full Trading Day before such Determination Date.
 
  If the record date for an issuance of rights, warrants or options or a
distribution for which an adjustment is required by the provisions of
subparagraph (5)(b)(i)(D), (5)(b)(ii) or (5)(b)(iii) (the "preceding
adjustment event") precedes the record date for the issuance or distribution
in respect of which the Current Market Price is being calculated and the Ex-
Dividend Date for such preceding adjustment event is on or after the
Determination Date for the issuance or distribution in respect of which the
Current Market Price is being calculated, then the Current Market Price shall
be adjusted by deducting therefrom the fair market value (on the record date
for the issuance or distribution in respect of which the Current Market Price
is being calculated), as determined in good faith by the Board of Directors,
of the capital stock, rights, warrants or options, assets or debt securities
issued or distributed in respect of each share of Series A TCI Group Common
Stock in such preceding adjustment event. Further, in the event that the Ex-
Dividend Date (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or reclassification to which paragraph
(5)(b)(i) (A), (B), (C) or (E) applies occurs during the period applicable for
calculating the Current Market Price, then the Current Market Price shall be
calculated for such period in a manner determined in good faith by the Board
of Directors to reflect the impact of such dividend, subdivision, combination
or reclassification on the Closing Prices of the Series A TCI Group Common
Stock during such period.
 
  "Determination Date" for any issuance of rights, warrants or options or any
dividend or distribution to which paragraph (5)(b)(ii) or (iii) applies shall
mean the earlier of (i) the record date for the determination of stockholders
entitled to receive the rights, warrants or options or the dividend or
distribution to which such paragraph applies and (ii) the Ex-Dividend Date for
such rights, warrants or options or dividend or distribution.
 
  "Dividend Payment Date" shall mean the 15th day of each February, May,
August and November, commencing with November 15, 1996, or the next succeeding
Business Day if any such day is not a Business Day.
 
  "Dividend Period" shall mean the period from the Issue Date to but excluding
the first Dividend Payment Date and, thereafter, each quarterly period from
and including a Dividend Payment Date to but excluding the next Dividend
Payment Date.
 
  "Exchange Act" means the Securities Exchange Act of 1934, as amended, as
amended from time to time, or any successor statute, and the rules and
regulations promulgated thereunder.
 
  "Exchange Date" shall have the meaning set forth in subparagraph (5)(a).
 
  "Exchange Rate" shall mean the kind and amount of securities, assets or
other property that as of any date are deliverable upon exchange of a share of
Class A Preferred Stock pursuant to the exchange privilege set forth
 
                                       4

 
in paragraph (5). The Exchange Rate of a share of Class A Preferred Stock
shall initially mean 4.810 shares of Series A TCI Group Common Stock for each
share of Class A Preferred Stock, subject to adjustment as set forth in
subparagraph (5)(b). In the event that pursuant to paragraph (5) the Class A
Preferred Stock becomes exchangeable for more than one class or series of
capital stock of the Parent, the term "Exchange Rate," when used with respect
to any such class or series, shall mean the number or fraction of shares or
other units of such capital stock that as of any date would be issued upon
exchange of a share of Class A Preferred Stock.
 
  "Ex-Dividend Date" shall mean the date on which "ex-dividend" trading
commences for a divided, an issuance of rights, warrants or options or a
distribution to which any of subparagraphs (5)(b)(i), (ii) or (iii) applies in
the Nasdaq National Market or on the principal exchange on which the Series A
TCI Group Common Stock is then quoted or traded.
 
  "Initial Exchange Date" shall mean August 1, 2001.
 
  "Initial Redemption Date" shall mean August 15, 2001.
 
  "Issue Date" shall mean the date on which shares of Class A Preferred Stock
are first issued.
 
  "Junior Stock" shall mean (i) each class or series of common stock of the
Corporation, (ii) any other class or series of capital stock of the
Corporation hereafter created, other than (A) any class or series of Parity
Stock (except to the extent provided under clause (iii) hereof) and (B) any
class or series of Senior Stock, and (iii) any class or series of Parity Stock
to the extent that it ranks junior to the Class A Preferred Stock as to
dividend rights, rights of redemption or rights on liquidation, as the case
may be. For purposes of clause (iii) above, a class or series of Parity Stock
shall rank junior to the Class A Preferred Stock as to dividend rights, rights
of redemption or rights on liquidation if the holders of shares of Class A
Preferred Stock shall be entitled to dividend payments, payments on redemption
or payments of amounts distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, in preference or priority to the
holders of shares of such class or series of Parity Stock.
 
  "Liquidation Preference," measured per share of the Class A Preferred Stock
as of any date of determination, shall mean an amount equal to (a) the par
value of such share ($100) plus (b) an amount equal to all dividends accrued
but unpaid on such share, whether or not such unpaid dividends have been
declared or there are any funds of the Corporation legally available for the
payment of dividends.
 
  "Mandatory Redemption Date" shall mean July 31, 2006.
 
  "Mandatory Redemption Price," as to any share of Class A Preferred Stock
which is to be redeemed on the Mandatory Redemption Date, shall mean the
Liquidation Preference thereof on such date.
 
  "Optional Redemption Price" shall have the meaning set forth in subparagraph
4(b).
 
  "Other Property" shall mean any security (other than Series A TCI Group
Common Stock), assets or other property deliverable upon the surrender of
shares of Class A Preferred Stock for exchange in accordance with the
provisions of paragraph (5).
 
  "Parent" means Tele-Communications, Inc., a Delaware corporation.
 
  "Parity Stock" shall mean the Class A Preferred Stock and any class or
series of capital stock, whether now existing or hereafter created, of the
Corporation ranking on a parity basis with the Class A Preferred Stock as to
dividend rights, rights of redemption or rights on liquidation. Capital stock
of any class or series, whether now existing or hereafter created, shall rank
on a parity as to dividend rights, rights of redemption or rights on
liquidation with the Class A Preferred Stock, whether or not the dividend
rates, dividend payment dates, redemption or liquidation prices per share or
sinking fund or mandatory redemption provisions, if any, are
 
                                       5

 
different from those of the Class A Preferred Stock, if the holders of shares
of such class or series shall be entitled to dividend payments, payments on
redemption or payments of amounts distributable upon dissolution, liquidation
or winding up of the Corporation, as the case may be, in proportion to their
respective accumulated and accrued and unpaid dividends, redemption prices or
liquidations prices, respectively, without preference or priority, one over
the other, as between the holders of shares of such class or series and the
holders of Class A Preferred Stock. No class or series of capital stock that
ranks junior to the Class A Preferred Stock as to rights on liquidation shall
rank or be deemed to rank on a parity basis with the Class A Preferred Stock
as to dividend rights or rights of redemption, unless the instrument creating
or evidencing such class or series of capital stock otherwise expressly
provides.
 
  "Person" shall mean any individual, corporation, partnership, joint venture,
association, joint stock company, limited liability company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity, whether acting in an individual, fiduciary or other
capacity.
 
  "Preferred Stock Directors" has the meaning set forth in subparagraph
(10)(a).
 
  "Prospectus Condition" shall mean, with respect to any exchange requested by
a holder of Class A Preferred Stock pursuant to paragraph (5)(a), that a
current prospectus (meeting the requirements of Section 10 of the Securities
Act) relating to the Series A TCI Group Common Stock shall have been delivered
to such holder or its designee; provided, however, that the Prospectus
Condition shall be deemed satisfied if the Parent receives (i) an opinion of
counsel (which may be the General Counsel of, or regular outside counsel to,
the Parent) to the effect that neither the Parent nor the Corporation is
required, under the Securities Act or the rules and regulations of the SEC
promulgated thereunder, to deliver a current prospectus in connection with any
exchange of Class A Preferred Stock for shares of Series A TCI Group Common
Stock or (ii) a letter from the Division of Corporation Finance (or other
appropriate division of the SEC) to the effect that such Division will not
raise objection or recommend any enforcement action to the SEC if the neither
the Parent nor the Corporation delivers a current prospectus in connection
with an exchange of Class A Preferred Stock for shares of Series A TCI Group
Common Stock.
 
  "Record Date" for the dividends payable on any Dividend Payment Date shall
mean the first day of the month during which such Dividend Payment Date shall
occur, as and if designated by the Board of Directors.
 
  "Redeemable Capital Stock" has the meaning set forth in subparagraph
(5)(b)(i).
 
  "Redemption Date," as to any share of Class A Preferred Stock, shall mean
(i), for purposes of subparagraph (3)(a), the Mandatory Redemption Date and
(ii), for purposes of subparagraph (3)(b), the date fixed by the Board of
Directors for the redemption of such share; provided, that no such date will
be a Redemption Date unless the applicable of the Mandatory Redemption Price
or the Optional Redemption Price is actually paid in full on such date or the
consideration sufficient for the payment thereof, and for no other purpose,
has been set apart or deposited in trust as contemplated by subparagraph
(3)(f).
 
  "Redemption Notice" shall have the meaning set forth in subparagraph (3)(d).
 
  "Redemption Price," as to any share of Class A Preferred Stock, shall mean
(i), if such share is to be redeemed pursuant to subparagraph (3)(a), the
Mandatory Redemption Price and (ii), if such share is to be redeemed pursuant
to subparagraph (3)(b), the applicable Optional Redemption Price.
 
  "Redemption Securities" shall mean securities of an issuer other than the
Parent that are distributed by the Parent in payment, in whole or in part, of
the call, redemption, exchange or other acquisition price for Redeemable
Capital Stock.
 
  "SEC" shall mean the Securities and Exchange Commission, or any successor
agency.
 
  "Securities Act" shall mean the Securities Act of 1933, as amended from time
to time, or any successor statute, and the rules and regulations promulgated
thereunder.
 
                                       6

 
  "Senior Stock" shall mean any class or series of capital stock of the
Corporation hereafter created ranking prior to the Class A Preferred Stock as
to dividend rights, rights of redemption or rights on liquidation. Capital
stock of any class or series shall rank prior to the Class A Preferred Stock
as to dividend rights, rights of redemption or rights on liquidation if the
holders of shares of such class or series shall be entitled to dividend
payments, payments on redemption or payments of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may be,
in preference or priority to the holders of shares of Class A Preferred Stock.
No class or series of capital stock that ranks on a parity basis with or
junior to the Class A Preferred Stock as to rights on liquidation shall rank
or be deemed to rank prior to the Class A Preferred Stock as to dividend
rights or rights of redemption, notwithstanding that the dividend rate,
dividend payment dates, sinking fund provisions, if any, or mandatory
redemption provisions thereof are different from those of the Class A
Preferred Stock, unless the instrument creating or evidencing such class or
series of capital stock otherwise expressly so provides.
 
  "Series A TCI Group Common Stock" shall mean the Tele-Communications, Inc.
Series A TCI Group Common Stock, par value $1.00 per share, of Parent, which
term shall include, where appropriate, in the case of any reclassification,
recapitalization or other change in the Series A TCI Group Common Stock, or in
the case of a consolidation or merger of Parent with or into another Person
affecting the Series A TCI Group Common Stock, such capital stock to which a
holder of Series A TCI Group Common Stock shall be entitled upon the
occurrence of such event.
 
  "Series B TCI Group Common Stock" shall mean the Tele-Communications, Inc.
Series B TCI Group Common Stock, par value $1.00 per share, of Parent, which
term shall include, where appropriate, in the case of any reclassification,
recapitalization or other change in the Series B TCI Group Common Stock, or in
the case of a consolidation or merger of Parent with or into another Person
affecting the Series B TCI Group Common Stock, such capital stock to which a
holder of Series B TCI Group Common Stock shall be entitled upon the
occurrence of such event.
 
  "Stock Dividend Amount" shall have the meaning set forth in subparagraph
(2)(c).
 
  "Subsidiary" shall mean (i) a corporation a majority of the capital stock of
which, having voting power under ordinary circumstances to elect directors, is
at the time, directly or indirectly, owned by the Corporation and/or one or
more subsidiaries of the Corporation and (ii) any other entity (other than a
corporation) in which the Corporation and/or one or more subsidiaries of the
Corporation, directly or indirectly, has (x) a majority ownership interest and
(y) the power to elect or direct the election of a majority of the members of
the governing body of such entity. The term "Subsidiary" does include a Wholly
Owned Subsidiary.
 
  "Subsidiary Equity Interest" shall mean (i) capital stock of a Subsidiary
(other than a Wholly Owned Subsidiary) that is a corporation or (ii) a
partnership or other ownership interest of a Subsidiary (other than a Wholly
Owned Subsidiary) that is not a corporation.
 
  "Trading Day" shall mean a day on which the Nasdaq National Market and the
New York Stock Exchange are each open for the transaction of business.
 
  "Wholly Owned Subsidiary" means (i) a corporation all of the capital stock
of which, having voting power under ordinary circumstances to elect directors,
is at the time, directly or indirectly, owned by the Corporation and/or one or
more Wholly Owned Subsidiaries and (ii) any other Person (other than a
corporation) in which the Corporation and/or one or more Wholly Owned
Subsidiaries, directly or indirectly, has (x) the entire ownership interest
and (y) the power to elect or direct the election of all of the members of the
governing body of such Person.
 
  (2) DIVIDENDS.
 
  (a) PAYMENT. The holders of shares of Class A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available therefor, cumulative dividends, in preference to
dividends on any Junior Stock, from the Issue Date at the rate per annum of 5%
of the par value of the
 
                                       7

 
Class A Preferred Stock per share ($100), rounded to the nearest cent on the
basis of the total number of shares of Class A Preferred Stock held by a
holder (or a dividend rate per share of $5.00 per annum), and no more, payable
quarterly for each share of Class A Preferred Stock in arrears on each
Dividend Payment Date; provided, however, that, with respect to any Dividend
Period during which a redemption occurs, the Board of Directors may, at its
option, declare accrued dividends to, and pay such dividends on, the related
Redemption Date, in which case such dividends would be payable on such
Redemption Date to the holders of the shares of Class A Preferred Stock as of
a special record date (not to exceed 45 days preceding the payment date) for
such dividend payment. Each dividend on the shares of Class A Preferred Stock
shall be payable to holders of record as they appear on the stock register of
the Corporation on the Record Date for such dividend and, for purposes of
calculating the accrual of dividends, dividends will accrue to, but not
including, the date fixed for payment. For purposes of determining the amount
of dividends "accrued" (i) as of the first Dividend Payment Date and as of any
date that is not a Dividend Payment Date, such amount shall be calculated on
the basis of the rate per annum specified above for actual days elapsed from
the Issue Date (in the case of the first Dividend Payment Date and any date
prior to the first Dividend Payment Date) or the last preceding Dividend
Payment Date (in the case of any other date) to but excluding the date as of
which such determination is being made, based on a 365-or 366-day year, as the
case may be, and (ii) as of any Dividend Payment Date (other than the first
Dividend Payment Date), such amount shall be calculated on the basis of the
foregoing rate per annum, based on a 360-day year of twelve 30-day months.
 
  Dividends on the shares of Class A Preferred Stock will accrue on a daily
basis (without interest or compounding) whether or not there are unrestricted
funds legally available for the payment of such dividends and whether or not
such dividends are declared. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Class A
Preferred Stock that may be in arrears. Dividends will cease to accrue in
respect of shares of Class A Preferred Stock on the date of their redemption
or exchange.
 
  Accrued and unpaid dividends for any past Dividend Period or Dividend
Periods may be declared and paid at any time, without reference to any
Dividend Payment Date, to holders of record on such date, not exceeding 45
days preceding the payment date thereof, as may be fixed by the Board of
Directors.
 
  (b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF DIVIDENDS. Any dividends
may be paid, in the sole discretion of the Board of Directors, (i) out of
funds legally available therefor, (ii) through the delivery of shares of
Series A TCI Group Common Stock or (iii) through any combination of the
foregoing forms of consideration elected by the Board of Directors in its sole
discretion. If any dividend declared by the Board of Directors is to be paid,
in whole or in part, through the delivery of shares of Series A TCI Group
Common Stock, each holder of Class A Preferred Stock shall receive the same
proportion of cash and/or shares of Series A TCI Group Common Stock (except
for cash paid in lieu of fractional shares) delivered in payment of such
dividend to other holders of shares of Class A Preferred Stock.
 
  (c) PAYMENT OF DIVIDENDS BY DELIVERY OF SERIES A TCI GROUP COMMON STOCK. If
the Corporation elects to pay any dividend payment, in whole or in part, by
delivery of shares of Series A TCI Group Common Stock, the amount of such
dividend payment to be paid per share of Class A Preferred Stock in shares of
Series A TCI Group Common Stock (the "Stock Dividend Amount") shall be paid
through the delivery to the holders of record of such shares of Class A
Preferred Stock on the Record Date for such dividend payment of a number of
shares of Series A TCI Group Common Stock determined by dividing the Stock
Dividend Amount by the Cash Equivalent Amount. No fractional shares of Series
A TCI Group Common Stock shall be delivered to a holder of shares of Class A
Preferred Stock, but the Corporation shall instead pay a cash adjustment
determined as provided in paragraph (7).
 
  If the Corporation elects to pay any dividend, in whole in part, through the
delivery of shares of Series A TCI Group Common Stock, the Corporation will
give notice of such determination (which shall include the number of shares of
Series A TCI Group Common Stock and the amount of cash, if any, to be
delivered in respect of each share of Class A Preferred Stock) by publication,
on the Record Date or any special record date for such dividend, of such
election in a daily newspaper of national circulation.
 
                                       8

 
  The Corporation's right to make any dividend payment (or a designated
portion thereof) through the delivery of shares of Series A TCI Group Common
Stock shall be conditioned upon: (i) the shares of Series A TCI Group Common
Stock to be so delivered being fully paid and nonassessable and free from any
preemptive rights, liens or adverse claims; (ii) the delivery of such shares
of Series A TCI Group Common Stock being exempt from the registration or
qualification requirements of the Securities Act and applicable state
securities laws or, if no such exemption is available, the delivery of such
shares of Series A TCI Group Common Stock having been duly registered or
qualified under the Securities Act and applicable state securities laws; and
(iii) the shares of Series A TCI Group Common Stock to be so delivered being
listed, and upon delivery being eligible for trading, on the Nasdaq National
Market or on a national securities exchange. If the conditions set forth in
this subparagraph (2)(c) have not been satisfied prior to or on the applicable
Dividend Payment Date, then such dividend payment shall be paid solely in
cash. If the Corporation elects to pay any dividend (or a designated portion
thereof) through the delivery of shares of Series A TCI Group Common Stock and
Parent agrees to deliver such shares to the Corporation in order to pay such
dividend, Parent has separately agreed to take such reasonable action which
may be necessary, in the opinion of the Parent's legal counsel, in order to
satisfy the requirements of clauses (i) through (iii) of this subparagraph
(2)(c) in connection with such shares and the delivery thereof.
 
  If the Corporation elects to pay any dividend (or a designated portion
thereof) through the delivery of shares of Series A TCI Group Common Stock and
Parent agrees to deliver such shares to the Corporation in order to pay such
dividend, Parent has also separately agreed after the date on which the
Corporation has declared such a dividend on the Class A Preferred Stock in
shares of Series A TCI Group Common Stock to reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Series A TCI Group Common Stock and its issued Series A TCI Group Common Stock
held in its treasury, for the purpose of paying such declared dividend
pursuant to this paragraph (2), the full number of shares of Series A TCI
Group Common Stock then deliverable in respect of such declared dividend
(assuming for this purpose that all of the outstanding shares of Class A
Preferred Stock are held by a single holder).
 
  (d) CREDIT. Any dividend payment made on the shares of Class A Preferred
Stock shall first be credited against the earliest accrued but unpaid dividend
due with respect to the shares of Class A Preferred Stock.
 
  (e) PRO RATA. All dividends paid with respect to the shares of Class A
Preferred Stock shall be paid pro rata to the holders entitled thereto.
 
  (f) PRIORITY. Payment of dividends to the holders of shares of Class A
Preferred Stock shall be subject to the prior preferences and other rights of
any Senior Stock and to the provisions of paragraph (4).
 
  (3) REDEMPTIONS.
 
  (a) MANDATORY REDEMPTION BY THE CORPORATION. The Corporation shall redeem on
the Mandatory Redemption Date all shares of Class A Preferred Stock remaining
outstanding at the Mandatory Redemption Price. If the Corporation is unable to
deliver shares of Series A TCI Group Common Stock in payment of the Mandatory
Redemption Price on the Mandatory Redemption Date, and if funds of the
Corporation legally available for redemption of shares of the Class A
Preferred Stock and any other class or series of Parity Stock then required to
be redeemed are insufficient to redeem the total number of shares of Class A
Preferred Stock remaining outstanding, those funds which are legally available
shall be used to redeem the maximum possible number of shares of Class A
Preferred Stock and each such other class or series of Parity Stock. At any
time and from time to time thereafter when the Corporation is able to deliver
shares of Series A TCI Group Common Stock, or additional funds of the
Corporation are legally available for such purpose, such shares of Series A
TCI Group Common Stock and/or funds shall immediately be used to redeem the
shares of Class A Preferred Stock and of each such other class or series of
Parity Stock which were required to be redeemed that the Corporation failed to
redeem until the balance of such shares have been redeemed. The selection of
shares to be redeemed pursuant to the two immediately preceding sentences
shall be made, as nearly as practicable, on a pro rata basis as among the
different classes or series and as among the holders of shares of a particular
class or series.
 
 
                                       9

 
  (b) OPTIONAL REDEMPTION BY THE CORPORATION. Shares of Class A Preferred
Stock are not redeemable by the Corporation prior to the Initial Redemption
Date. At any time and from time to time on or after the Initial Redemption
Date and prior to the Mandatory Redemption Date, the Corporation shall have
the right to redeem, in whole or from time to time in part, the outstanding
shares of Class A Preferred Stock at the following per share call prices,
together with an amount equal to all dividends accrued but unpaid thereon to
the date fixed for redemption (the "Optional Redemption Price"), if redeemed
during the twelve-month period beginning July 31 of the year indicated below:
 


                                                                          CALL
      YEAR                                                                PRICE
      ----                                                               -------
                                                                      
      2001.............................................................. $102.50
      2002..............................................................  101.67
      2003..............................................................  100.83
      2004 and thereafter...............................................  100.00

 
  If fewer than all of the outstanding shares of Class A Preferred Stock are
to be redeemed on any Redemption Date, the shares of Class A Preferred Stock
to be redeemed shall be chosen by the Corporation pro rata (as nearly as may
be practicable) among all holders of outstanding shares of Class A Preferred
Stock. If shares of Class A Preferred Stock evidenced by a certificate
selected for partial redemption are thereafter exchanged in part pursuant to
paragraph (5) hereof, the shares so exchanged (as far as may be practicable)
will be deemed to be the shares selected for redemption. The Corporation shall
not be required to register a transfer of (i) any shares of Class A Preferred
Stock for a period of 5 Business Days next preceding any selection of shares
of Class A Preferred Stock to be redeemed or (ii) any shares of Class A
Preferred Stock called for redemption.
 
  (c) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF REDEMPTION PRICE. The
Corporation may effect the redemption of shares of Class A Preferred Stock at
the Redemption Price pursuant to subparagraph (3)(a) or (b) above, in the sole
discretion of the Board of Directors, (i) out of funds legally available
therefor, (ii) through the delivery of shares of Series A TCI Group Common
Stock or (iii) through any combination of the foregoing forms of consideration
elected by the Board of Directors in its sole discretion. Each holder whose
shares of Class A Preferred Stock are redeemed shall receive in payment of the
Redemption Price the same proportion of cash and/or shares of Series A TCI
Group Common Stock (except for cash paid in lieu of fractional shares) paid to
other holders of shares of Class A Preferred Stock redeemed on the same
Redemption Date.
 
  (d) NOTICE OF REDEMPTION. The Corporation shall provide notice of any
redemption of shares of Class A Preferred Stock to holders of record of Class
A Preferred Stock to be called for redemption not less than 15 nor more than
60 days prior to the date fixed for such redemption. Such notice (a
"Redemption Notice") shall be provided by mailing notice of such redemption
first class postage prepaid, to each holder of record of shares of Class A
Preferred Stock to be redeemed, at such holder's address as it appears on the
stock register of the Corporation; provided, however, that neither failure to
give such notice nor any defect therein shall affect the validity of the
proceeding for the redemption of any shares of Class A Preferred Stock to be
redeemed except as to the holders to whom the Corporation has failed to give
said notice or whose notice was defective.
 
  In addition to any information required by law or by the applicable rules of
the Nasdaq National Market or any national securities exchange, each
Redemption Notice shall state, as appropriate, the following (and may contain
such other information as the Corporation deems advisable):
 
    (A) the Redemption Date;
 
    (B) that all outstanding shares of Class A Preferred Stock are to be
  redeemed or, in the case of a call for redemption of fewer than all
  outstanding shares of Class A Preferred Stock, the number of shares held by
  such holder to be redeemed;
 
    (C) the applicable Redemption Price and the form or forms of
  consideration that the Corporation has elected to pay and/or deliver upon
  such redemption and, if more than one form of consideration has been
 
                                      10

 
  elected by the Corporation, the designated portions of the Redemption Price
  to be paid in each form of consideration so elected;
 
    (D) if the Corporation has elected to deliver shares of Series A TCI
  Group Common Stock in payment of the Redemption Price (or a designated
  portion thereof), the method of determining the number of shares of Series
  A TCI Group Common Stock so deliverable as provided in subparagraph (3)(e)
  below;
 
    (E) the place or places where certificates for Class A Preferred Stock to
  be redeemed are to be surrendered for redemption;
 
    (F) that dividends on the shares of Class A Preferred Stock to be
  redeemed shall cease to accrue on the Redemption Date (except as otherwise
  provided herein); and
 
    (G) the then current Exchange Rate and the place or places where
  certificates for Class A Preferred Stock may be surrendered for exchange
  pursuant to paragraph (5), and shall further state that the exchange
  privilege will terminate immediately prior to the close of business on the
  Redemption Date.
 
  (e) REDEMPTION BY DELIVERY OF SERIES A TCI GROUP COMMON STOCK. If the
Corporation elects to pay, in whole or in part, the Redemption Price in
respect of shares of Class A Preferred Stock through the delivery of shares of
Series A TCI Group Common Stock, then the Corporation shall deliver to each
holder of shares of Class A Preferred Stock to be redeemed on the applicable
Redemption Date a number of shares of Series A TCI Group Common Stock equal to
the aggregate Redemption Price (or designated portion thereof) of such shares
of Class A Preferred Stock divided by the Cash Equivalent Amount. No
fractional shares of Series A TCI Group Common Stock shall be delivered to a
holder of shares of Class A Preferred Stock in payment of the Redemption
Price, but the Corporation shall instead pay a cash adjustment determined as
provided in paragraph (7).
 
  The Corporation's right to elect to pay any Redemption Price (or designated
portion thereof) through the delivery of shares of Series A TCI Group Common
Stock shall be conditioned upon: (i) the Corporation's having timely given a
Redemption Notice setting forth such election; (ii) the shares of Series A TCI
Group Common Stock to be so delivered being fully paid and nonassessable and
free from any preemptive rights, liens or adverse claims; (iii) the delivery
of such shares of Series A TCI Group Common Stock being exempt from the
registration or qualification requirements of the Securities Act and
applicable state securities laws or, if no such exemption is available, the
delivery of such shares of Series A TCI Group Common Stock having been duly
registered or qualified under the Securities Act and applicable state
securities laws; and (iv) the shares of Series A TCI Group Common Stock being
listed, and upon delivery being eligible for trading, on the Nasdaq National
Market or on a national securities exchange. If the conditions set forth in
this subparagraph (3)(e) have not been satisfied prior to or on the Redemption
Date, the Redemption Price to be paid on such Redemption Date shall be paid
solely in cash. If the Corporation elects to pay any Redemption Price (or a
designated portion thereof) through the delivery of shares of Series A TCI
Group Common Stock and Parent agrees to deliver such shares to the Corporation
in order to pay such Redemption Price, Parent has separately agreed to take
such reasonable action which may be necessary, in the opinion of the Parent's
legal counsel, in order to satisfy the requirements of clauses (i) through
(iv) of this subparagraph (3)(e) in connection with such shares and the
delivery thereof.
 
  If the Corporation elects to pay any Redemption Price (or a designated
portion thereof) through the delivery of shares of Series A TCI Group Common
Stock and Parent agrees to deliver such shares to the Corporation in order to
pay such Redemption Price, Parent has also separately agreed after the date on
which the Corporation elects to pay the Redemption Price in shares of Series A
TCI Group Common Stock to reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Series A TCI Group
Common Stock and its issued Series A TCI Group Common Stock held in its
treasury, for the purpose of paying the Redemption Price pursuant to this
paragraph (3), the full number of shares of Series A TCI Group Common Stock
then deliverable in respect of such Redemption Price (assuming for this
purpose that all of the outstanding shares of Class A Preferred Stock are held
by a single holder).
 
  (f) DEPOSIT OF FUNDS AND/OR SHARES. If the Redemption Notice with respect to
shares of Class A Preferred Stock to be redeemed pursuant to this paragraph
(3) shall have been timely given by the Corporation, and if on or before the
applicable Redemption Date the Corporation shall have deposited with the
redemption agent for the Class A Preferred Stock (or, if there is no
redemption agent, shall have set apart so as to be available
 
                                      11

 
for such purpose and only such purpose) cash (including cash for any
adjustment in lieu of delivering fractional shares) and/or shares of Series A
TCI Group Common Stock, as applicable, sufficient to pay in full the aggregate
Redemption Price for such shares of Class A Preferred Stock on such Redemption
Date, and provided that all conditions set forth in subparagraph (3)(e) to the
delivery of shares of Series A TCI Group Common Stock shall have been
satisfied (if applicable), then effective as of the close of business on such
Redemption Date, such shares of Class A Preferred Stock shall no longer be
deemed outstanding (notwithstanding that any certificate therefor shall not
have been surrendered for cancellation), dividends with respect to the shares
so called for redemption shall cease to accrue on the Redemption Date (except
that holders of shares of Class A Preferred Stock at the close of business on
a Record Date for any payment of dividends shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares following such Record Date and
prior to such Dividend Payment Date) and all rights with respect to the shares
so called for redemption shall forthwith after such date cease and terminate,
except the right of such holders, upon the surrender of certificates
evidencing the shares of Class A Preferred Stock so redeemed, to receive the
cash and/or Series A TCI Group Common Stock, as applicable, payable or
deliverable in payment of the Redemption Price therefor, and the applicable
cash adjustment, if any, in lieu of fractional shares, without interest. Any
cash and/or shares of Series A TCI Group Common Stock so deposited or set
apart which shall remain unclaimed at the end of one year after the Redemption
Date shall be returned or released to the Corporation, after which time the
holders of shares of Class A Preferred Stock called for redemption on such
Redemption Date that remain outstanding after such one-year period shall look
only to the Corporation for the payment of the Redemption Price for such
shares, without interest, unless an applicable escheat or abandoned property
law otherwise requires. If any shares of Class A Preferred Stock so called for
redemption are exchanged, pursuant to paragraph (5), between the date such
cash and/or shares of Series A TCI Group Common Stock are so deposited or set
apart and the close of business on the Redemption Date, then the cash
(including cash for any adjustment in lieu of delivering fractional shares)
and/or shares of Series A TCI Group Common Stock, as applicable, deposited or
set apart for the redemption of such shares so exchanged shall be promptly
thereafter returned or released to the Corporation.
 
  At its election, the Corporation on or prior to any Redemption Date (but no
more than ninety (90) days prior to such Redemption Date) may deposit
immediately available funds and/or shares of Series A TCI Group Common Stock
sufficient to pay the aggregate Redemption Price of the shares of Class A
Preferred Stock called for redemption on such date in trust for the holders
thereof with any bank or trust company organized under the laws of the United
States of America or any state thereof having capital, undivided profits and
surplus aggregating at least $50 million (the "Redemption Agent"), with
irrevocable instructions and authority to the Redemption Agent, on behalf and
at the expense of the Corporation, to mail the Redemption Notice as soon as
practicable after receipt of such irrevocable instructions (or to complete
such mailing previously commenced, if it has not already been completed) and
to pay, on and after such Redemption Date or prior thereto, the Redemption
Price of the shares of Class A Preferred Stock to be redeemed to their
respective holders upon the surrender of the certificates therefor. A deposit
made in compliance with the immediately preceding sentence shall be deemed to
constitute full payment for the shares of Class A Preferred Stock to be
redeemed and from and after the later of the close of business on the date of
such deposit (although prior to such Redemption Date) or the date the
Redemption Notice is mailed, the shares of Class A Preferred Stock to be
redeemed shall no longer be deemed outstanding and the holders thereof shall
cease to be stockholders with respect to such shares and shall have no rights
with respect to such shares except (x) the right of the holders thereof to
receive the Redemption Price of such shares (calculated through the Redemption
Date), without interest, upon surrender of the certificates therefor and (y)
the right to exchange such shares in accordance with paragraph (5) prior to
the close of business on such Redemption Date. Any interest accrued on funds
so deposited shall be paid by the Redemption Agent to the Corporation from
time to time. Any cash and/or shares of Series A TCI Group Common Stock
deposited with the Redemption Agent which shall remain unclaimed at the end of
one year after the Redemption Date shall be returned by the Redemption Agent
to the Corporation, after which return the holders of shares of Class A
Preferred Stock called for redemption on such Redemption Date that remain
outstanding after such one-year period shall look only to the Corporation for
the payment of the Redemption Price for such shares, without interest, unless
an applicable escheat or abandoned property law otherwise
 
                                      12

 
requires. If any shares of Class A Preferred Stock called for redemption on
such Redemption Date are exchanged, in accordance with paragraph (5), between
the date such cash and/or shares of Series A TCI Group Common Stock are so
deposited with the Redemption Agent and the close of business on the
Redemption Date, then the cash (including cash for any adjustment in lieu of
delivering fractional shares) and/or shares of Series A TCI Group Common
Stock, as applicable, so deposited for the redemption of such shares so
exchanged shall be promptly thereafter returned by the Redemption Agent to the
Corporation.
 
  (g) SURRENDER OF CERTIFICATES; STATUS. Each holder of shares of Class A
Preferred Stock to be redeemed shall surrender the certificates evidencing
such shares (properly endorsed or assigned to the Corporation in blank and
with signatures guaranteed, if the Corporation shall so require and the
Redemption Notice shall so state) to the redemption agent (or to the
Corporation if there is no redemption agent) at the place designated in the
Redemption Notice for such redemption and shall thereupon be entitled to
receive the consideration for such shares specified in the Redemption Notice
(subject to subparagraph (3)(e)) in an aggregate amount equal to the
Redemption Price for such shares. In case fewer than all the shares of Class A
Preferred Stock represented by any such surrendered certificate are called for
redemption, a new certificate shall be issued at the expense of the
Corporation representing the unredeemed shares. Holders of shares of Class A
Preferred Stock that are redeemed on any Redemption Date shall not be entitled
to receive dividends declared and paid on any shares of Series A TCI Group
Common Stock deliverable in payment of the Redemption Price (or designated
portion thereof) for such shares of Class A Preferred Stock, and such shares
of Series A TCI Group Common Stock shall not be entitled to vote, until such
shares of Series A TCI Group Common Stock are delivered upon the surrender of
the certificates representing such shares of Class A Preferred Stock. Upon
such surrender, such holders shall be entitled to receive such dividends
declared and paid on such shares of Series A TCI Group Common Stock subsequent
to such Redemption Date and prior to such delivery.
 
  (h) PRIORITY. The right of the Corporation to redeem shares of Series A
Preferred pursuant to this paragraph (3) shall be subject to the prior
preferences and other rights of any Senior Stock and to the provisions of
paragraph (4).
 
  (4) LIMITATIONS ON DIVIDENDS AND REDEMPTIONS IN RESPECT OF COMPANY AND
SUBSIDIARY STOCK.
 
  (a) LIMITATIONS ON JUNIOR STOCK DIVIDENDS. As long as any shares of Class A
Preferred Stock are outstanding, no dividends shall be paid or declared in
cash or otherwise on Junior Stock, nor shall any other distribution be made on
any Junior Stock, unless: (i) full dividends on all Parity Stock have been
paid, or declared and set aside for payment, for all dividend periods
terminating on or prior to the date of such Junior Stock dividend or
distribution payment, to the extent such dividends are cumulative; (ii) the
Corporation has paid or set aside all amounts, if any, then or theretofore
required to be paid or set aside for all purchase, retirement, and sinking
funds, if any, for any Parity Stock; and (iii) the Corporation is not in
default on any of its obligations to redeem any Parity Stock.
 
  (b) LIMITATIONS ON PURCHASES OF JUNIOR STOCK. As long as any shares of Class
A Preferred Stock are outstanding, no shares of any Junior Stock may be
purchased, redeemed, or otherwise acquired by the Corporation or any of its
Subsidiaries (except in connection with a reclassification of any Junior Stock
through the issuance of other Junior Stock and/or Convertible Securities for
shares of Junior Stock and cash in lieu of fractional shares in connection
therewith or the purchase, redemption or other acquisition of any Junior Stock
from any Wholly Owned Subsidiary), nor may any funds be set aside or made
available for any sinking fund for the purchase, redemption or other
acquisition of any Junior Stock, unless: (i) full dividends on all Parity
Stock have been paid, or declared and set aside for payment, for all dividend
periods terminating on or prior to the date of such purchase, redemption or
acquisition, to the extent such dividends are cumulative; (ii) the Corporation
has paid or set aside all amounts, if any, then or theretofore required to be
paid or set aside for all purchase, retirement, and sinking funds, if any, for
any Parity Stock; and (iii) the Corporation is not in default on any of its
obligations to redeem any Parity Stock.
 
 
                                      13

 
  (c) JUNIOR STOCK DIVIDENDS OTHERWISE PERMITTED. Subject to the provisions of
subparagraphs (4)(a) and (b), dividends or distributions (payable in cash,
property or securities) may be declared and paid on the shares of any Junior
Stock from time to time and any Junior Stock may be purchased, redeemed or
otherwise acquired by the Corporation or any of its Subsidiaries from time to
time. In the event of the declaration and payment of any such dividends or
distributions, the holders of such Junior Stock will be entitled, to the
exclusion of holders of shares of Class A Preferred Stock, to share therein
according to their respective interests.
 
  (d) LIMITATIONS ON PARITY STOCK DIVIDENDS AND REDEMPTIONS. As long as any
shares of Class A Preferred Stock are outstanding, dividends or other
distributions may not be declared or paid on any Parity Stock, and the
Corporation may not purchase, redeem or otherwise acquire any Parity Stock
(except (x) from any Wholly Owned Subsidiary or (y) in connection with a
mandatory conversion or exchange of such Parity Stock or a conversion or
exchange of such Parity Stock at the option of the holder for securities other
than Parity Stock or Senior Stock and cash in lieu of fractional shares in
connection therewith), unless either: (a)(i) full dividends on all Parity
Stock have been paid, or declared and set aside for payment, for all dividend
periods terminating on or prior to the date of such Parity Stock dividend,
distribution, purchase, redemption or other acquisition payment, to the extent
such dividends are cumulative; (ii) the Corporation has paid or set aside all
amounts, if any, then or theretofore required to be paid or set aside for all
purchase, retirement, and sinking funds, if any, for any Parity Stock; and
(iii) the Corporation is not in default on any of its obligations to redeem
any Parity Stock; or (b) with respect to the payment of dividends only, any
such dividends are declared and paid pro rata so that the amounts of any
dividends declared and paid per share on shares of Class A Preferred Stock and
each other share of such Parity Stock will in all cases bear to each other the
same ratio that accrued and unpaid dividends (including any accumulation with
respect to unpaid dividends for prior dividend periods, if such dividends are
cumulative) per share on shares of Class A Preferred Stock and such other
share of Parity Stock bear to each other.
 
  (e) CERTAIN PERMITTED DIVIDENDS AND REDEMPTIONS. Nothing contained in this
paragraph (4) shall prevent (i) the payment of dividends or the making of
distributions on any Junior Stock solely in shares of Junior Stock and/or
Convertible Securities for shares of Junior Stock (together with a cash
adjustment for fractional shares, if any) or the redemption, purchase or other
acquisition of Junior Stock solely in exchange for (together with a cash
adjustment for fractional shares, if any), or through the application of the
proceeds from the sale of, shares of Junior Stock and/or Convertible
Securities for shares of Junior Stock; (ii) the payment of dividends or the
making of distributions on any class or series of Parity Stock solely in
(together with a cash adjustment for fractional shares, if any) (x) shares of
Junior Stock and/or Convertible Securities for shares of Junior Stock or (y)
any securities of Parent (including shares of Series A TCI Group Common
Stock), or the redemption, exchange, purchase or other acquisition of any
class or series of Parity Stock solely in exchange for (together with a cash
adjustment for fractional shares, if any), or through the application of the
proceeds from the sale of, (A) shares of Junior Stock and/or Convertible
Securities for shares of Junior Stock or (B) any securities of Parent
(including shares of Series A TCI Group Common Stock); or (iii) the exchange
of Class A Preferred Stock for shares of Series A TCI Group Common Stock
(together with a cash adjustment for fractional shares, if any) and Other
Property, if any, pursuant to the provisions of paragraph (5).
 
  (f) LIMITATIONS ON SUBSIDIARY EQUITY DIVIDENDS AND REDEMPTIONS. As long as
any shares of Class A Preferred Stock are outstanding, the Corporation shall
not, and shall not permit any Subsidiary to: (i) declare or pay dividends on
any Subsidiary Equity Interest or (ii) purchase, redeem or otherwise acquire
any Subsidiary Equity Interest, or set aside any funds for any sinking fund
for the purchase or redemption of any Subsidiary Equity Interest, unless: (A)
full dividends on the Class A Preferred Stock have been paid, or declared and
set aside for payment, for all Dividend Periods terminating on or prior to the
date of such Subsidiary Equity Interest dividend, distribution, purchase,
redemption or other acquisition payment; and (B) the Corporation is not in
default on any of its obligations to redeem shares of Class A Preferred Stock
under paragraph (3) or to exchange shares of Class A Preferred Stock under
paragraph (5).
 
  (g) CERTAIN PERMITTED SUBSIDIARY EQUITY DIVIDENDS AND REDEMPTIONS. Nothing
contained in this paragraph (4) shall prevent (i) the payment of dividends or
the making of distributions by any Subsidiary on any of its Subsidiary Equity
Interests solely in shares of the same class or series as, or ranking junior
to, such
 
                                      14

 
Subsidiary Equity Interest ("Permitted Subsidiary Equity Interest") and/or
Convertible Securities for such Permitted Subsidiary Equity Interests
(together with a cash adjustment for fractional shares, if any) or the
redemption, purchase or other acquisition of any such Subsidiary Equity
Interest solely in exchange for (together with a cash adjustment for
fractional shares, if any), or through the application of the proceeds from
the sale of, Permitted Subsidiary Equity Interests or Convertible Securities
for Permitted Subsidiary Equity Interests; (ii) the redemption, purchase or
other acquisition of any such Subsidiary Equity Interest solely in exchange
for (together with a cash adjustment for fractional shares, if any) any
securities of Parent (including shares of Series A TCI Group Common Stock);
(iii) the payment of dividends or the making of distributions by any
Subsidiary on any of its Subsidiary Equity Interests if such dividends or
distributions are required to be made (there being no right of deferral)
pursuant to the terms of any charter document or any partnership, joint
venture, stockholder, acquisition or other agreement in effect on the Issue
Date; or (iv) the redemption, purchase or other acquisition of any such
Subsidiary Equity Interest if such redemption, purchase or other acquisition
is required to be made pursuant to the terms of any charter document or any
partnership, joint venture, stockholder, acquisition or other agreement in
effect on the Issue Date).
 
  (h) WAIVER. The provisions of subparagraphs (4)(a), (b), (d) and (f) are for
the sole benefit of the holders of the Class A Preferred Stock and
subparagraphs (4)(a), (b) and (d) are also for the benefit of any other class
or series of Parity Stock having the terms described therein and accordingly,
at any time when (i) there are no shares of any such other class or series of
Parity Stock outstanding or if the holders of each such other class or series
of Parity Stock have, by such vote or consent of the holders thereof as may be
provided for in the instrument creating or evidencing such class or series,
waived in whole or in part the benefit of the provisions of subparagraphs
(4)(a), (b) or (d) (either generally or in the specific instance), and (ii)
the holders of shares of Class A Preferred Stock shall have waived (as
provided in paragraph (11)) in whole or in part the benefit of the provisions
of subparagraphs (4)(a), (b), (d) or (f) (either generally or in the specific
instance), then such provisions shall not (to the extent waived, in the case
of any partial waiver) restrict the payment of dividends or the making of
distributions on, or the redemption, purchase or other acquisition of any
shares of, Class A Preferred Stock, any other class or series of Parity Stock,
any Junior Stock or any Subsidiary Equity Interest.
 
  (5) EXCHANGE AT OPTION OF HOLDER.
 
  (a) RIGHT TO AND MECHANICS OF EXCHANGE. Subject to the provisions of this
paragraph (5), shares of Class A Preferred Stock are exchangeable, in whole or
from time to time in part, at the option of the holders thereof, at any time
from and after the Initial Exchange Date and prior to the close of business on
the Mandatory Redemption Date, unless previously redeemed, into shares of
Series A TCI Group Common Stock at the Exchange Rate. The right to exchange
shares of Class A Preferred Stock called for redemption shall terminate
immediately prior to the close of business on the related Redemption Date.
 
  In order to exchange shares of Class A Preferred Stock, the holder thereof
shall surrender the certificates evidencing the shares of Class A Preferred
Stock to be exchanged at the office or agency to be maintained by the
Corporation for that purpose, duly endorsed to the Corporation or in blank (or
accompanied by duly executed instruments of transfer to the Corporation or in
blank) with signatures guaranteed (such endorsements or instruments of
transfer to be in form satisfactory to the Corporation), together with written
notice of exchange specifying the number of shares of Class A Preferred Stock
to be exchanged and specifying the name or names (with addresses) in which the
certificate or certificates representing the Series A TCI Group Common Stock
deliverable on such exchange are to be registered, and otherwise in accordance
with exchange procedures established by the Corporation. Each notice of
exchange shall be irrevocable, and each exchange shall be deemed to have been
effected immediately prior to the close of business on the date (the "Exchange
Date") on which (i) all of the requirements for such exchange shall have been
satisfied and (ii) the Parent is able to deliver a current prospectus relating
to the Series A TCI Group Common Stock, if required to satisfy the Prospectus
Condition. The exchange shall be at the Exchange Rate in effect immediately
prior to the close of business on the Exchange Date. If any transfer is
involved in the issuance or delivery of any certificate or certificates for
shares of Series A TCI Group Common Stock in a name other than that of the
registered holder of the shares of Class A Preferred Stock surrendered for
exchange, such holder shall also deliver to the Corporation a sum sufficient
to pay all taxes,
 
                                      15

 
if any, payable in respect of such transfer or evidence satisfactory to the
Corporation that such taxes have been paid. Except as provided in the
immediately preceding sentence, the Corporation shall pay any issue, stamp or
other similar tax in respect of such issuance or delivery.
 
  As promptly as practicable after the Exchange Date, the Corporation, in
accordance with the provisions of this paragraph (5), shall issue and deliver
at said office or agency to the holder of the shares of Class A Preferred
Stock so surrendered for exchange, or on his or her written order, a
certificate or certificates for the number of full shares of Series A TCI
Group Common Stock issuable upon exchange of such shares in accordance with
the provisions of this paragraph (5), and any fractional interest shall be
settled in accordance with paragraph (7). If required in order to satisfy the
Prospectus Condition, the Corporation shall, or shall cause the Parent to,
deliver to such holder or its designee, together with the certificate for such
shares of Series A TCI Group Common Stock and cash in lieu of any fractional
share, a current prospectus (meeting the requirements of Section 10 of the
Securities Act) relating to the Series A TCI Group Common Stock; provided,
however, that in the event the Parent is unable during any period to deliver a
current prospectus, no exchange shall be effected (and no Exchange Date shall
occur) during such period and any exchange that could otherwise have been
effected during such period shall be deemed to have been effected immediately
prior to the close of business (and the Exchange Date shall be deemed to have
occurred) on the first Business Day that the Parent is able to deliver a
current prospectus relating to the Series A TCI Group Common Stock. The
inability of the Corporation or the Parent to deliver a current prospectus at
any time shall not be deemed a default under this Restated Certificate of
Incorporation. The Parent has separately agreed to use all reasonable efforts
to ensure that it will be able to deliver a current prospectus, if required,
during any period that the holders of shares of Class A Preferred Stock are
entitled to exchange such shares for shares of Series A TCI Group Common
Stock.
 
  The Person in whose name the certificate for shares of Series A TCI Group
Common Stock is issued upon such exchange shall be treated for all purposes as
the stockholder of record of such shares of Series A TCI Group Common Stock as
of the close of business on the Exchange Date; provided, however, that no
surrender of Class A Preferred Stock on any date when the stock transfer books
of the Parent are closed for any purpose shall be effective to constitute the
Person or Persons entitled to receive the shares of Series A TCI Group Common
Stock deliverable upon such exchange as the record holder(s) of such shares of
Series A TCI Group Common Stock on such date, but surrender shall be effective
(assuming all other requirements for the valid exchange of such shares have
been satisfied) to constitute such Person or Persons as the record holder(s)
of such shares of Series A TCI Group Common Stock for all purposes as of the
opening of business on the next succeeding day on which such stock transfer
books are open, and such exchange shall be at the Exchange Rate in effect on
the date that such shares of Class A Preferred Stock were surrendered for
exchange (and such other requirements satisfied) as if the stock transfer
books of the Parent had not been closed on such date. Upon exchange of shares
of Class A Preferred Stock, the rights of the holder of such shares, as a
holder thereof, shall cease.
 
  Holders of shares of Class A Preferred Stock at the close of business on a
Record Date for any payment of declared dividends shall be entitled to receive
the dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the effective exchange of such shares following such Record
Date and prior to the corresponding Dividend Payment Date. However, shares of
Class A Preferred Stock surrendered for exchange after the close of business
on a Record Date for any payment of dividends and before the opening of
business on the next succeeding Dividend Payment Date must be accompanied by
payment in cash of an amount equal to the dividend thereon attributable to the
current quarterly Dividend Period which is to be paid on such Dividend Payment
Date (unless such shares are subject to redemption on a Redemption Date
between such Record Date and such Dividend Payment Date). A holder of shares
of Class A Preferred Stock called for redemption on any Dividend Payment Date
shall (if such holder is the registered holder on the applicable Record Date)
receive the dividend on such shares payable on that date and will be able to
exchange such shares after the Record Date for such dividend without paying an
amount equal to such dividend to the Corporation upon exchange. Except as
provided above, upon any exchange of shares of Class A Preferred Stock
pursuant to this paragraph (5), the Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on exchanged shares
of Class A Preferred Stock and the Parent shall make no payment or allowance
for
 
                                      16

 
previously declared dividends or distributions on the shares of Series A TCI
Group Common Stock issued upon such exchange (or on any Other Property issued
upon such exchange pursuant to this paragraph (5)).
 
  If the shares of Class A Preferred Stock represented by a certificate
surrendered for exchange are exchanged in part only, the Corporation shall
cause to be issued and delivered to the registered holder, without charge
therefor, a new certificate or certificates representing in the aggregate the
number of unexchanged shares.
 
  (b) EXCHANGE RATE ADJUSTMENTS. The Exchange Rate shall be subject to
adjustment from time to time as provided below in this subparagraph (5)(b).
 
    (i) If the Parent shall, after the Issue Date:
 
      (A) pay a stock dividend or make a distribution on the outstanding
    shares of Series A TCI Group Common Stock in shares of Series A TCI
    Group Common Stock,
 
      (B) subdivide or split the outstanding shares of Series A TCI Group
    Common Stock into a greater number of shares,
 
      (C) combine the outstanding shares of Series A TCI Group Common Stock
    into a smaller number of shares,
 
      (D) pay a dividend or make a distribution on the outstanding shares
    of Series A TCI Group Common Stock in shares of its capital stock
    (other than Series A TCI Group Common Stock), or
 
      (E) issue by reclassification of its outstanding shares of Series A
    TCI Group Common Stock (other than a reclassification by way of merger
    or binding share exchange that is subject to subparagraph (5)(d)) any
    shares of its capital stock,
 
  then, in any such event, the Exchange Rate in effect immediately prior to
  the opening of business on the record date for determination of
  stockholders entitled to receive such dividend or distribution or the
  effective date of such subdivision, split, combination or reclassification,
  as the case may be, shall be adjusted so that the holder of any shares of
  Class A Preferred Stock shall thereafter be entitled to receive, upon
  exchange at the option of such holder, the number of shares of Series A TCI
  Group Common Stock or other capital stock (or both) of the Parent which
  such holder would have owned or been entitled to receive immediately
  following such action if such holder had exchanged his shares of Class A
  Preferred Stock immediately prior to the record date for, or effective date
  of, as the case may be, such event. Notwithstanding the foregoing, if an
  event listed in clause (D) or (E) above would result in the shares of Class
  A Preferred Stock being exchangeable for shares or units (or a fraction
  thereof) of more than one class or series of capital stock of the Parent
  and any such class or series of capital stock provides by its terms a right
  in favor of the Parent to call, redeem, exchange or otherwise acquire all
  of the outstanding shares or units of such class or series (such class or
  series of capital stock being herein referred to as "Redeemable Capital
  Stock") for consideration that may include Redemption Securities, then the
  Exchange Rate of the Class A Preferred Stock shall not be adjusted pursuant
  to this subparagraph (5)(b)(i) and in lieu thereof the adjustment to the
  Exchange Rate contemplated by subparagraph (5)(b)(iii) shall be made with
  the same effect as if the dividend or distribution of such Redeemable
  Capital Stock or the issuance of the additional class or series of such
  Redeemable Capital Stock by reclassification had been a distribution of
  assets of the Parent.
 
    The adjustment contemplated by this subparagraph (5)(b)(i) shall be made
  successively whenever any event listed above shall occur. For a dividend or
  distribution, the adjustment shall become effective at the opening of
  business on the Business Day next following the record date for such
  dividend or distribution. For a subdivision, split, combination or
  reclassification, the adjustment shall become effective immediately after
  the effectiveness of such subdivision, split, combination or
  reclassification.
 
    If after an adjustment pursuant to this subparagraph (5)(b)(i) a holder
  of Class A Preferred Stock would be entitled to receive upon exchange
  thereof shares of two or more classes or series of capital stock of the
  Parent, the Exchange Rate shall thereafter be subject to adjustment upon
  the occurrence of an action taken with respect to any such class or series
  of capital stock other than Series A TCI Group Common Stock as is
 
                                      17

 
  contemplated by this paragraph (5), on terms comparable to those applicable
  to the Series A TCI Group Common Stock pursuant to this paragraph (5).
 
    (ii) If the Parent shall, after the Issue Date, distribute rights,
  warrants or options to all or substantially all holders of its outstanding
  shares of Series A TCI Group Common Stock entitling them (for a period not
  exceeding 45 days from the record date referred to below) to subscribe for
  or purchase shares of Series A TCI Group Common Stock (or Convertible
  Securities for shares of Series A TCI Group Common Stock) at a price per
  share (or having an exercise, exchange or conversion price per share, after
  adding thereto an allocable portion of the exercise price of the right,
  warrant or option to purchase such Convertible Securities, computed on the
  basis of the maximum number of shares of Series A TCI Group Common Stock
  issuable upon exercise, exchange or conversion of such Convertible
  Securities) less than the Current Market Price on the applicable
  Determination Date, then, in any such event, the Exchange Rate shall be
  adjusted by multiplying the Exchange Rate in effect immediately prior to
  the opening of business on the record date for the determination of
  stockholders entitled to receive such distribution by a fraction, of which
  the numerator shall be the number of shares of Series A TCI Group Common
  Stock outstanding on such record date plus the number of additional shares
  of Series A TCI Group Common Stock so offered pursuant to such rights,
  warrants or options to the holders of Series A TCI Group Common Stock (and
  to holders of Convertible Securities for shares of Series A TCI Group
  Common Stock and to holders of Series B TCI Group Common Stock referred to
  in the immediately succeeding paragraph of this subparagraph (5)(b)(ii))
  for subscription or purchase (or into which the Convertible Securities for
  shares of Series A TCI Group Common Stock so offered are exercisable,
  exchangeable or convertible), and of which the denominator shall be the
  number of shares of Series A TCI Group Common Stock outstanding on such
  record date plus the number of additional shares of Series A TCI Group
  Common Stock which the aggregate offering price of the total number of
  shares of Series A TCI Group Common Stock so offered (or the aggregate
  exercise, exchange or conversion price of the Convertible Securities for
  shares of Series A TCI Group Common Stock so offered, after adding thereto
  the aggregate exercise price of the rights, warrants or options to purchase
  such Convertible Securities) to the holders of Series A TCI Group Common
  Stock (and to such holders of Convertible Securities for shares of Series A
  TCI Group Common Stock and such holders of Series B TCI Group Common Stock)
  would purchase at such Current Market Price.
 
    For purposes of this subparagraph (5)(b)(ii), the number of shares of
  Series A TCI Group Common Stock outstanding on any applicable record date
  shall be deemed to include (i) the maximum number of shares of Series A TCI
  Group Common Stock the issuance of which would be necessary to effect the
  full exercise, exchange or conversion of all Convertible Securities for
  shares of Series A TCI Group Common Stock outstanding on such record date
  which are then exercisable, exchangeable or convertible at a price (before
  giving effect to any adjustment to such price for the distribution to which
  this subparagraph (5)(b)(ii) is being applied) equal to or less than the
  Current Market Price per share of Series A TCI Group Common Stock on the
  applicable Determination Date, if all of such Convertible Securities were
  deemed to have been exercised, exchanged or converted immediately prior to
  the opening of business on such record date and (ii) if the Series B TCI
  Group Common Stock is then convertible into Series A TCI Group Common
  Stock, the maximum number of shares of Series A TCI Group Common Stock the
  issuance of which would be necessary to effect the full conversion of all
  shares of Series B TCI Group Common Stock outstanding on such record date,
  if all of such shares of Series B TCI Group Common Stock were deemed to
  have been converted immediately prior to the opening of business on such
  record date.
 
    The adjustment contemplated by this subparagraph (5)(b)(ii) shall be made
  successively whenever any such rights, warrants or options are distributed,
  and shall become effective immediately after the record date for the
  determination of stockholders entitled to receive such distribution. If all
  of the shares of Series A TCI Group Common Stock (or all of the Convertible
  Securities for shares of Series A TCI Group Common Stock) subject to such
  rights, warrants or options have not been issued when such rights, warrants
  or options expire (or, in the case of rights, warrants or options to
  purchase Convertible Securities for shares of Series A TCI Group Common
  Stock which have been exercised, if all of the shares of Series A TCI Group
  Common Stock issuable upon exercise, exchange or conversion of such
  Convertible Securities have not been issued prior to the expiration of the
  exercise, exchange or conversion right thereof), then the Exchange
 
                                      18

 
  Rate shall promptly be readjusted to the Exchange Rate which would then be
  in effect had the adjustment upon the issuance of such rights, warrants or
  options been made on the basis of the actual number of shares of Series A
  TCI Group Common Stock (or such Convertible Securities) issued upon the
  exercise of such rights, warrants or options (or the exercise, exchange or
  conversion of such Convertible Securities).
 
    No adjustment shall be made under this subparagraph (5)(b)(ii) if the
  adjusted Exchange Rate would be lower than the Exchange Rate in effect
  immediately prior to such adjustment.
 
    (iii) If the Parent shall, after the Issue Date, (x) pay a dividend or
  make a distribution to all or substantially all holders of its outstanding
  shares of Series A TCI Group Common Stock of any assets or debt securities
  or any rights, warrants or options to purchase securities (excluding (A)
  dividends or distributions referred to in subparagraph (5)(b)(i) (except as
  otherwise provided in clause (y) of this sentence) and distributions of
  rights, warrants or options referred to in subparagraph (5)(b)(ii) and (B)
  cash dividends, unless such cash dividends are Extraordinary Cash
  Dividends), or (y) pay a dividend or make a distribution to all or
  substantially all holders of its outstanding shares of Series A TCI Group
  Common Stock of Redeemable Capital Stock, or issue Redeemable Capital Stock
  by reclassification of the Series A TCI Group Common Stock, and pursuant to
  subparagraph (5)(b)(i) such Redeemable Capital Stock is to be treated the
  same as a distribution of assets of the Parent subject to this subparagraph
  (5)(b)(iii), then, in any such event, the Exchange Rate shall be adjusted
  by multiplying the Exchange Rate in effect immediately prior to the opening
  of business on (I) the record date for the determination of stockholders
  entitled to receive the dividend or distribution or (II) in the case of a
  reclassification, the effective date of such reclassification by a
  fraction, of which the numerator shall be the total number of shares of
  Series A TCI Group Common Stock outstanding on such record date or
  immediately prior to such effective date multiplied by the Current Market
  Price on the applicable Determination Date, and of which the denominator
  shall be the total number of shares of Series A TCI Group Common Stock
  outstanding on such record date or immediately prior to such effective date
  multiplied by such Current Market Price, less the fair market value (as
  determined in good faith by the Board of Directors) on such record date or
  effective date of the assets (or Redeemable Capital Stock) or debt
  securities or rights, warrants or options so distributed to the holders of
  Series A TCI Group Common Stock (and to the holders of Convertible
  Securities for shares of Series A TCI Group Common Stock and to the holders
  of Series B TCI Group Common Stock referred to in the immediately
  succeeding paragraph of this subparagraph (5)(b)(iii) if the dividend or
  distribution to which this paragraph (5)(b)(iii) applies is also being made
  to such holders).
 
    For purposes of this subparagraph (5)(b)(iii), the number of shares of
  Series A TCI Group Common Stock outstanding on any relevant date shall be
  deemed to include (i) the maximum number of shares of Series A TCI Group
  Common Stock the issuance of which would be necessary to effect the full
  exercise, exchange or conversion of all Convertible Securities for Series A
  TCI Group Common Stock outstanding on such date which are then exercisable,
  exchangeable or convertible at a price (before giving effect to any
  adjustment to such price for the dividend or distribution or
  reclassification to which this subparagraph (5)(b)(iii) is being applied)
  equal to or less than the Current Market Price on the applicable
  Determination Date, if all of such Convertible Securities were deemed to
  have been exercised, exchanged or converted immediately prior to the
  opening of business on such date and (ii) if the Series B TCI Group Common
  Stock is then convertible into Series A TCI Group Common Stock, the maximum
  number of shares of Series A TCI Group Common Stock the issuance of which
  would be necessary to effect the full conversion of all shares of Series B
  TCI Group Common Stock outstanding on such date, if all of such shares of
  Series B TCI Group Common Stock were deemed to have been converted
  immediately prior to the opening of business on such date.
 
    For purposes of this subparagraph (5)(b)(iii), the term "Extraordinary
  Cash Dividend" shall mean any cash dividend with respect to the Series A
  TCI Group Common Stock the amount of which, together with the aggregate
  amount of cash dividends on the Series A TCI Group Common Stock to be
  aggregated with such cash dividend in accordance with the following
  provisions of this paragraph, equals or exceeds the threshold percentage
  set forth in the following sentence. If, upon the date immediately prior to
  the Ex-Dividend Date with respect to a cash dividend on Series A TCI Group
  Common Stock, the aggregate of the
 
                                      19

 
  amount of such cash dividend together with the amounts of all cash
  dividends on the Series A TCI Group Common Stock with Ex-Dividend Dates
  occurring in the 365/366 consecutive day period ending on the date prior to
  the Ex-Dividend Date with respect to the cash dividend to which this
  provision is being applied (other than any such other cash dividends with
  Ex-Dividend Dates occurring in such period for which a prior adjustment in
  the Exchange Rate was previously made under this subparagraph (5)(b)(iii))
  equals or exceeds on a per share basis 10% of the average of the Closing
  Prices during the period beginning on the date after the first such Ex-
  Dividend Date in such period and ending on the date prior to the Ex-
  Dividend Date with respect to the cash dividend to which this provision is
  being applied (except that if no other cash dividend has had an Ex-Dividend
  Date occurring in such period, the period for calculating the average of
  the Closing Prices shall be the period commencing 365/366 days prior to the
  date immediately prior to the Ex-Dividend Date with respect to the cash
  dividend to which this provision is being applied), such cash dividend
  together with each other cash dividend with an Ex-Dividend Date occurring
  in such 365-/366-day period that is aggregated with such cash dividend in
  accordance with this paragraph shall be deemed to be an Extraordinary Cash
  Dividend.
 
    The adjustment pursuant to the foregoing provisions of this subparagraph
  (5)(b)(iii) shall be made successively whenever any dividend or
  distribution or reclassification to which this subparagraph (5)(b)(iii)
  applies is made, and shall become effective immediately after (x), in the
  case of a dividend or distribution, the record date for the determination
  of stockholders entitled to receive such dividend or distribution or (y),
  in the case of a reclassification, the effective date of such
  reclassification. No adjustment shall be made under this subparagraph
  (5)(b)(iii) if the adjusted Exchange Rate would be lower than the Exchange
  Rate in effect immediately prior to such adjustment. In the event that,
  with respect to any distribution to which this subparagraph (5)(b)(iii)
  would otherwise apply, the denominator of the fraction in the formula set
  forth in the first paragraph of this subparagraph (5)(b)(iii) is zero or a
  negative number, then the adjustment provided by this subparagraph
  (5)(b)(iii) shall not be made. If the Parent makes a distribution to all or
  substantially all holders of its Series A TCI Group Common Stock of any of
  its assets (including shares of Redeemable Capital Stock that pursuant to
  subparagraph 5(b)(i) are to be treated the same as a distribution of assets
  of the Parent) or debt securities or any rights, warrants or options to
  purchase securities of the Parent that, but for the preceding sentence,
  would otherwise result in an adjustment in the Exchange Rate pursuant to
  the foregoing provisions of this subparagraph (5)(b)(iii), then, from and
  after the record date for determining the holders of Series A TCI Group
  Common Stock entitled to receive such distribution, a holder of Class A
  Preferred Stock that exchanges such shares in accordance with the
  provisions of this paragraph (5) will upon such exchange be entitled to
  receive, in addition to the shares of Series A TCI Group Common Stock for
  which such shares of Class A Preferred Stock are exchangeable, the kind and
  amount of assets or debt securities or rights, warrants or options to
  purchase securities of the Parent comprising such distribution that such
  holder would have received if such holder had exchanged such shares of
  Class A Preferred Stock immediately prior to the record date for
  determining the holders of Series A TCI Group Common Stock entitled to
  receive such distribution.
 
    (iv) In the event that a holder of Class A Preferred Stock would be
  entitled to receive upon exercise of the exchange privilege thereof
  pursuant to this paragraph (5) any Redeemable Capital Stock and the Parent
  redeems, exchanges or otherwise acquires all of the outstanding shares or
  other units of such Redeemable Capital Stock (such event being a
  "Redemption Event"), then, from and after the effective date of such
  Redemption Event, the holders of shares of Class A Preferred Stock then
  outstanding shall be entitled to receive upon the exchange of such shares,
  in lieu of shares or units of such Redeemable Capital Stock, the kind and
  amount of securities, cash or other assets receivable upon the Redemption
  Event by a holder of the number of shares or units of such Redeemable
  Capital Stock for which such shares of Class A Preferred Stock could have
  been exchanged immediately prior to the effective date of such Redemption
  Event (assuming, to the extent applicable, that such holder failed to
  exercise any rights of election with respect thereto and received per share
  or unit of such Redeemable Capital Stock the kind and amount of securities,
  cash or other assets received per share or unit by holders of a plurality
  of the non-electing shares or units of such Redeemable Capital Stock), and
  (from and after the effective date of such Redemption Event) the
 
                                      20

 
  holders of the Class A Preferred Stock shall have no other exchange rights
  under these provisions with respect to such Redeemable Capital Stock.
 
    (v) For purposes of calculating the number of outstanding shares of
  Series A TCI Group Common Stock under subparagraphs (5)(b)(ii) and
  (5)(b)(iii), any shares of Series A TCI Group Common Stock (i) issuable as
  a dividend (including shares that the Corporation has notified the holders
  of Class A Preferred Stock will be issued in payment of a dividend (or a
  designated portion thereof) pursuant to paragraph (2)) shall be deemed to
  have been issued immediately prior to the time of the record date for such
  dividend or (ii) issuable in payment of a Redemption Price (or a designated
  portion thereof) pursuant to paragraph (3) shall be deemed to have been
  issued immediately prior to the related Redemption Date. Shares of Series A
  TCI Group Common Stock owned by or held for the account of the Parent or
  any of its majority-owned subsidiaries shall not be deemed outstanding for
  the purposes of this subparagraph (5)(b).
 
    (vi) In any case in which this subparagraph (5)(b) shall require that an
  adjustment be made in the Exchange Rate, the Corporation may, in its sole
  discretion, elect to defer the following until after the occurrence of the
  event which requires such adjustment: (A) the delivery by the Corporation
  to the holder of any Class A Preferred Stock surrendered for exchange the
  additional shares of Series A TCI Group Common Stock issuable upon such
  exchange over the shares of Series A TCI Group Common Stock issuable before
  giving effect to such adjustment and (B) paying to such holder any amount
  in cash in lieu of a fractional share of Series A TCI Group Common Stock;
  provided, however, that the Corporation shall deliver to such holder a due
  bill or other appropriate instrument evidencing such holder's right to
  receive such additional shares of Series A TCI Group Common Stock, and such
  cash, upon the occurrence of the event requiring such adjustment.
 
    (vii) All adjustments to the Exchange Rate shall be calculated to the
  nearest 1/1000th of a share. No adjustment in the Exchange Rate shall be
  required unless such adjustment would require an increase or decrease of at
  least one percent therein; provided, however, that any adjustment which by
  reason of this subparagraph is not required to be made shall be carried
  forward and taken into account in any subsequent adjustment. In addition,
  no adjustment need be made for rights to purchase shares of Series A TCI
  Group Common Stock or for sales of shares of Series A TCI Group Common
  Stock which in either case are made pursuant to a plan providing for
  reinvestment of dividends or interest or pursuant to a bona fide employee
  stock option or stock purchase plan (x) of the Parent or any wholly owned
  subsidiary of the Parent or (y) of the Corporation or any Wholly Owned
  Subsidiary. No adjustment need be made for a change in the par value of the
  Series A TCI Group Common Stock. To the extent the shares of Class A
  Preferred Stock become exchangeable for cash, no adjustment need be made
  thereafter as to the cash and no interest shall accrue on such cash.
 
    (viii) The Corporation shall be entitled, at the direction of the Parent
  and to the extent permitted by law, to make such increases in the Exchange
  Rate, in addition to those referred to above in this subparagraph (5)(b),
  as the Parent determines to be advisable in order that any event treated
  for federal income tax purposes as a dividend of stock or stock rights will
  not be taxable to the holders of any series of TCI common stock.
 
    (ix) There shall be no adjustment to the Exchange Rate in the event of
  the issuance of any stock or other securities or assets of the Parent in a
  reorganization, acquisition or other similar transaction except as
  specifically provided in this paragraph (5). In the event this subparagraph
  (5)(b) requires adjustments to the Exchange Rate under more than one of
  subparagraph (5)(b)(i)(D), (5)(b)(ii) or (5)(b)(iii), and the record dates
  for the dividends or distributions giving rise to such adjustments shall
  occur on the same date, then such adjustments shall be made by applying
  first, the provisions of subparagraph (5)(b)(i)(D), second, the provisions
  of subparagraph (5)(b)(iii) and third, the provisions of subparagraph
  (5)(b)(ii).
 
    (x) No adjustment need be made under this subparagraph (5)(b) for a
  transaction referred to in subparagraph (5)(b)(i), (ii), (iii) or (iv) if
  holders of the Class A Preferred Stock are to participate in the
  transaction on a basis and with notice that the Board of Directors in good
  faith determines to be fair and appropriate in light of the basis and
  notice on which holders of Series A TCI Group Common Stock participate in
  the transaction; provided that the basis on which the holders of shares of
  Class A Preferred
 
                                      21

 
  Stock are to participate in the transaction shall not be deemed to be fair
  if it would require the holder to exchange his shares of Class A Preferred
  Stock in order to participate at any time prior to the expiration of the
  exchange period for the shares of Class A Preferred Stock specified in
  subparagraph (5)(a).
 
  (c) FRACTIONAL SHARES OF CLASS A PREFERRED STOCK. No fractional shares of
Class A Preferred Stock may be tendered for exchange pursuant to this
paragraph (5).
 
  (d) ADJUSTMENT FOR CONSOLIDATION OR MERGER OF PARENT. In case of any
consolidation or merger to which the Parent is a party, or in the case of any
sale or transfer to another corporation of the property of the Parent as an
entirety or substantially as an entirety, or in case of any statutory exchange
of securities with another corporation (other than in connection with a merger
or acquisition) (each of the foregoing being referred to herein as a
"Transaction"), in each case as a result of which shares of Series A TCI Group
Common Stock shall be reclassified or converted into the right to receive
stock, securities or other property (including cash or any combination
thereof), proper provision shall be made so that each share of Class A
Preferred Stock which is not converted into the right to receive stock,
securities or other property in connection with such Transaction shall, after
consummation of such Transaction, be subject to exchange at the option of the
holder into the kind and amount of stock, securities or other property
receivable upon consummation of such Transaction by a holder of the number of
shares of Series A TCI Group Common Stock (and/or any Other Property into
which the Class A Preferred Stock may be exchangeable in accordance with this
paragraph (5)) into which such share of Class A Preferred Stock might have
been exchanged immediately prior to consummation of such Transaction (assuming
in each case that such holder of Series A TCI Group Common Stock (or such
Other Property) failed to exercise rights of election, if any, as to the kind
or amount of stock, securities or other property receivable upon consummation
of such Transaction (provided that if the kind or amount of stock, securities
or other property receivable upon consummation of such Transaction is not the
same for each non-electing share, then the kind and amount of stock,
securities or other property receivable upon consummation of such Transaction
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares)). The kind and
amount of stock or securities into which the shares of Class A Preferred Stock
shall be exchangeable after consummation of such Transaction shall be subject
to adjustment, as nearly as may be practicable, as described in subparagraph
(5)(b) following the date of consummation of such Transaction. The Parent has
separately agreed not to become a party to any Transaction unless the terms
thereof are consistent with this subparagraph (5)(d). The provisions of this
subparagraph (5)(d) shall similarly apply to successive Transactions.
 
  If this subparagraph (5)(d) applies, subparagraphs (5)(b)(i), (ii), (iii)
and (iv) shall not apply.
 
  (e) NOTICE OF ADJUSTMENTS. Whenever the Exchange Rate is adjusted as herein
provided, the Corporation shall:
 
    (1) forthwith compute the adjusted Exchange Rate in accordance herewith
  and prepare a certificate signed by an officer of the Corporation setting
  forth the adjusted Exchange Rate, the method of calculation thereof in
  reasonable detail and the facts requiring such adjustment and upon which
  such adjustment is based, which certificate shall be conclusive, final and
  binding evidence of the correctness of the adjustment (absent manifest
  error), and file such certificate forthwith with the transfer agent for the
  shares of Class A Preferred Stock and the Series A TCI Group Common Stock;
  and
 
    (2) mail a notice to the holders of the outstanding shares of Class A
  Preferred Stock stating that the Exchange Rate has been adjusted, the facts
  requiring such adjustment and upon which such adjustment is based and
  setting forth the adjusted Exchange Rate, such notice to be mailed at or
  prior to the time the Corporation mails an interim statement, if any, to
  its stockholders covering the fiscal quarter during which the facts
  requiring such adjustment occurred, but in any event within 45 days
  following the end of such fiscal quarter.
 
  (f) NOTICE OF CERTAIN TRANSACTIONS. In case, at any time while any of the
shares of Class A Preferred Stock are outstanding,
 
    (1) the Parent takes any action which would require an adjustment to the
  Exchange Rate; or
 
                                      22

 
    (2) the Parent shall authorize (x) any consolidation, merger or binding
  share exchange to which the Parent is a party and for which approval of any
  stockholders of the Parent is required (except for a merger of the Parent
  into one of its wholly owned subsidiaries solely for the purpose of
  changing the corporate domicile of the Parent to another state of the
  United States and in connection with which there is no substantive change
  in the rights or privileges of any securities of the Parent other than
  changes resulting from differences in the corporate statutes of the then
  existing and the new state of domicile), or (y) the sale or transfer of all
  or substantially all of the assets of the Parent; or
 
    (3) the Parent shall authorize the voluntary dissolution, liquidation or
  winding up of the Parent or the Parent is the subject of an involuntary
  dissolution, liquidation or winding up;
 
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of exchange of the shares of Class A Preferred
Stock, and shall cause to be mailed to the holders of shares of Class A
Preferred Stock at their last addresses as they shall appear on the stock
register, at least 10 days before the record date (or other date set for
definitive action if there shall be no record date), a notice stating the
action or event for which such notice is being given and the record date for
(or such other date) and the anticipated effective date of such action or
event; provided, however, that any notice required hereunder shall in any
event be given no later than the time that notice is given to the holders of
the Series A TCI Group Common Stock. The failure to give or receive the notice
required by this subparagraph (5)(f) or any defect therein shall not affect
the legality or validity of any action or any vote thereon.
 
  (g) ACTIONS IN RESPECT OF SERIES A TCI GROUP COMMON STOCK. The Corporation
shall take, and the Parent has separately agreed to take, such reasonable
action which may be necessary, in the opinion of the Corporation's or the
Parent's legal counsel, in order that (i) the Corporation may validly and
legally deliver fully paid and nonassessable shares of Series A TCI Group
Common Stock upon any surrender of shares of Class A Preferred Stock for
exchange pursuant to this paragraph (5), (ii) the delivery of shares of Series
A TCI Group Common Stock in accordance with this paragraph (5) is exempt from
the registration or qualification requirements of the Securities Act and
applicable state securities laws or, if no such exemption is available, that
the offer and exchange of such shares of Series A TCI Group Common Stock have
been duly registered or qualified under the Securities Act and applicable
state securities laws, (iii) the shares of Series A TCI Group Common Stock
delivered upon such exchange are listed for trading on the Nasdaq National
Market or on a national securities exchange (upon official notice of issuance)
and (iv) the shares of Series A TCI Group Common Stock delivered upon such
exchange are free of preemptive rights and any liens or adverse claims.
 
  The Parent has separately agreed to at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but
unissued Series A TCI Group Common Stock and its issued Series A TCI Group
Common Stock held in its treasury, for the purpose of effecting any exchange
of shares of Class A Preferred Stock at the option of the holder pursuant to
this paragraph (5), the full number of shares of Series A TCI Group Common
Stock then deliverable upon the exchange of all then outstanding shares of
Class A Preferred Stock (assuming for this purpose that all of the outstanding
shares of Class A Preferred Stock are held by a single holder).
 
  (6) LIQUIDATION RIGHTS.
 
  (a) PAYMENT OF LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution, or winding up of the affairs of the Corporation, whether
voluntary or involuntary, the holders of shares of Class A Preferred Stock
then outstanding, after payment or provision for payment of the debts and
other liabilities of the Corporation and the payment or provision for payment
of any distribution on any shares of Senior Stock, and before any distribution
to the holders of Junior Stock or any Parity Stock of the Corporation ranking
junior to the Class A Preferred Stock upon liquidation, dissolution or winding
up, shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders an amount per share of Class A
Preferred Stock in cash equal to the Liquidation Preference. In the event the
assets of the Corporation available for distribution to the holders of the
shares of Class A Preferred Stock upon any dissolution, liquidation or winding
up of the
 
                                      23

 
Corporation shall be insufficient to pay in full the Liquidation Preference
payable to the holders of outstanding shares of Class A Preferred Stock and
the liquidation preference payable to all other shares of Parity Stock that
rank pari passu with the Class A Preferred Stock upon liquidation, dissolution
or winding up (as set forth in the instrument or instruments creating such
Parity Stock), the holders of shares of Class A Preferred Stock and of all
other shares of such Parity Stock shall share ratably in such distribution of
assets in proportion to the amount which would be payable on such distribution
if the amounts to which the holders of outstanding shares of Class A Preferred
Stock and the holders of outstanding shares of such other Parity Stock were
paid in full. Except as provided in this subparagraph (6)(a), holders of Class
A Preferred Stock shall not be entitled to any distribution in the event of
the liquidation, dissolution or winding up of the affairs of the Corporation.
 
  (b) CERTAIN EVENTS NOT DEEMED LIQUIDATION, ETC. For the purposes of this
paragraph (6), none of the following shall be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation:
 
    (1) the sale, lease, transfer or exchange of all or substantially all of
  the assets of the Corporation; or
 
    (2) the consolidation or merger of the Corporation with one or more other
  corporations (whether or not the Corporation is the corporation surviving
  such consolidation or merger) or the consummation of a statutory binding
  share exchange involving the Corporation.
 
  (7) NO FRACTIONAL SHARES OF SERIES A TCI GROUP COMMON STOCK. No fractional
shares of Series A TCI Group Common Stock or scrip shall be issued upon the
exchange of Class A Preferred Stock for Series A TCI Group Common Stock or in
connection with the delivery of shares of Series A TCI Group Common Stock in
payment, in whole or in part, of any dividend or Redemption Price. Whether or
not a fractional share would be delivered to a holder of Class A Preferred
Stock shall be based upon (i), in the case of an exchange pursuant to
paragraph (5), on the total number of shares of Class A Preferred Stock such
holder is at the time exchanging into Series A TCI Group Common Stock and the
total number of shares of Series A TCI Group Common Stock otherwise
deliverable upon such exchange, (ii), in the case of the payment, in whole or
in part, of dividends pursuant to paragraph (2) through the delivery of shares
of Series A TCI Group Common Stock, on the total number of shares of Class A
Preferred Stock at the time held by such holder and the total number of shares
of Series A TCI Group Common Stock otherwise deliverable in respect thereof
and (iii), in the case of the payment, in whole or in part, of a Redemption
Price pursuant to paragraph (3) through the delivery of shares of Series A TCI
Group Common Stock, on the total number of shares of Class A Preferred Stock
at the time held by such holder that are to be redeemed on the related
Redemption Date and the total number of shares of Series A TCI Group Common
Stock otherwise deliverable in respect thereof. In lieu of the issuance of a
fraction of a share of Series A TCI Group Common Stock or scrip, the
Corporation shall pay instead an amount in cash (rounded to the nearest whole
cent) by its check equal to the same fraction of the Closing Price of a share
of Series A TCI Group Common Stock on the Trading Day immediately preceding
the Exchange Date, the Dividend Payment Date or the Redemption Date, as the
case may be.
 
  (8) PAYMENT OF TAXES. The Corporation shall pay any and all documentary,
stamp or similar transfer taxes payable in respect of the delivery of shares
of Series A TCI Group Common Stock pursuant to paragraphs (2), (3) or (5);
provided, however, that the Corporation shall not be required to pay any tax
which may be payable in respect of any registration of transfer involved in
the delivery of shares of Series A TCI Group Common Stock upon an exchange of
shares of Class A Preferred Stock pursuant to paragraph (5) in a name other
than that of the registered holder of such shares of Class A Preferred Stock.
 
  (9) NO PREEMPTIVE RIGHTS. The holders of shares of Class A Preferred Stock
shall have no preemptive rights, including preemptive rights with respect to
any shares of capital stock or other securities of the Corporation convertible
into or carrying rights or options to purchase any such shares.
 
  (10) VOTING RIGHTS. The holders of shares of Class A Preferred Stock shall
have no voting rights, except as otherwise required by law and except as set
forth in this paragraph (10). When and if the holders of Class A Preferred
Stock are entitled to vote by law or pursuant to this paragraph (10), each
holder will be entitled to one
 
                                      24

 
vote per share. Shares of Class A Preferred Stock held by the Parent or any
majority-owned subsidiary of the Parent shall not be counted for quorum
purposes and shall be deemed shares not entitled to vote on any matter
presented to the holders of Class A Preferred Stock, except to the extent
otherwise required by law.
 
  (a) ELECTION OF PREFERRED STOCK DIRECTORS. (i) If at any time accrued
dividends payable on the shares of Class A Preferred Stock are in arrears and
unpaid in an aggregate amount equal to or exceeding the aggregate amount of
dividends payable thereon for six or more quarterly Dividend Periods (whether
or not consecutive), the holders of the shares of Class A Preferred Stock,
voting separately as a class (with the holders of shares of any other class or
series of Parity Stock upon which like voting rights have been conferred and
are exercisable), shall have the right to vote for the election of two
directors (the "Preferred Stock Directors") to the Board of Directors of the
Corporation, such directors to be in addition to the number of directors
constituting the Board of Directors immediately prior to the accrual of such
right. Such right of the holders of shares of Class A Preferred Stock to vote
for the election of two Preferred Stock Directors shall, when vested, continue
until all dividends in arrears on the shares of Class A Preferred Stock shall
have been paid in full and, when so paid, such right shall cease, subject
always to the same provisions for the vesting of such right of the holders of
the shares of Class A Preferred Stock to elect two Preferred Stock Directors
in the case of future dividend defaults. The Preferred Stock Directors shall
be elected by a plurality of the votes cast by the holders of Class A
Preferred Stock and any other class or series of Parity Stock upon which like
voting rights have been conferred and are exercisable.
 
  (ii) At any time when the holders of shares of the Class A Preferred Stock
(with the holders of any other class or series of Parity Stock upon which like
voting rights have been conferred and are exercisable) are entitled to elect
two Preferred Stock Directors, the Corporation shall, upon the written request
(a "Request") of the holders of record of not less than the greater of (x) 10%
of the outstanding shares of Class A Preferred Stock or (y) 10% of the
outstanding shares of all classes and series of Parity Stock (including the
Class A Preferred Stock) entitled to vote for such Preferred Stock Directors,
call a special meeting of holders of the Class A Preferred Stock (and such
other Parity Stock) for the election of the two Preferred Stock Directors.
Notice of the special meeting shall be given in accordance with the
requirements of Delaware law, and such meeting shall be held not more that 60
days after the Corporation's receipt of the Request. The Preferred Stock
Directors shall be nominated by the Persons who submit the Request, except
that at any meeting after the first meeting at which the Preferred Stock
Directors are elected, the Preferred Stock Directors shall be nominated,
subject to subparagraph (10)(a)(iii) below, by the existing Preferred Stock
Directors. No person may be nominated or may serve as a Preferred Stock
Director unless such person meets all requirements for serving on the Board of
Directors as set forth in any applicable federal statute (including any such
statute administered by the Federal Communications Commission) or the rules
and regulations of any administrative agency promulgated there- under.
 
  (iii) The term of office of each Preferred Stock Director shall terminate on
the earlier of (x) the next annual meeting of stockholders of the Corporation
at which a successor shall have been elected and qualified (irrespective of
whether the Board of Directors is divided into staggered classes) or (y) the
termination of the right of the holders of shares of Class A Preferred Stock
and any such other shares of Parity Stock to vote for Preferred Stock
Directors pursuant to this subparagraph (10)(a). If, prior to the end of the
term of any Preferred Stock Director elected as aforesaid, a vacancy in the
office of such director shall occur, such vacancy shall be filled for the
unexpired term by the appointment by the remaining Preferred Stock Director
elected as aforesaid of a new director for the unexpired term of such former
Preferred Stock Director. If both Preferred Stock Directors so elected by the
holders of shares of Class A Preferred Stock (and such other Parity Stock)
shall cease, at the same time, to serve as directors before their terms shall
expire, the holders of the shares of Class A Preferred Stock (together with
the holders of such other Parity Stock, if any) may, at a special meeting of
the holders called as provided in subparagraph (10)(a)(ii) above, nominate and
elect successors to hold office for the unexpired terms of such Preferred
Stock Directors.
 
  (b) CERTAIN CHANGES TO CHARTER; RECLASSIFICATIONS. For as long as any shares
of Class A Preferred Stock remain outstanding, the affirmative vote of the
holders of at least 66 2/3% of such outstanding shares (voting separately as a
class), given in Person or by proxy at any annual meeting or special meeting
called for such purpose, shall be necessary (A) before the Corporation may
amend, alter or repeal any of the provisions of this
 
                                      25

 
Restated Certificate of Incorporation of the Corporation which would adversely
affect the powers, preferences or rights of the holders of the shares of Class
A Preferred Stock then outstanding or reduce the minimum time required for any
notice to which holders of shares of Class A Preferred Stock then outstanding
may be entitled; provided, however, that (x) any such amendment, alteration or
repeal that would authorize, create or increase the authorized amount of any
additional shares of Junior Stock or shares of any other class or series of
Parity Stock (whether or not already authorized) and (y) any such amendment
that would increase the number of authorized shares of Preferred Stock (but
not the number of authorized shares of Class A Preferred Stock) or that would
decrease (but not below the number of shares then outstanding) the number of
authorized shares of Preferred Stock (but not the number of authorized shares
of Class A Preferred Stock), shall be deemed not to adversely affect such
powers, preferences or rights and shall not be subject to approval by the
holders of shares of Class A Preferred Stock; and (B) before the Corporation
may reclassify the outstanding shares of Class A Preferred Stock into another
class or series of capital stock of the Corporation (unless such
reclassification solely seeks to change the designation of the Class A
Preferred Stock and would not adversely affect the powers, preferences or
rights of the holders of the shares of Class A Preferred Stock then
outstanding or reduce the minimum time required for any notice to which
holders of shares of Class A Preferred Stock then outstanding may be
entitled); provided, however, that no consent described in clause (A) of this
paragraph of the holders of the shares of Class A Preferred Stock shall be
required if, at or prior to the time when such amendment, alteration or repeal
is to take effect, provision is made for the redemption of all shares of Class
A Preferred Stock at the time outstanding (except that no such provision may
be made prior to the Initial Redemption Date); provided further, however, that
if the Corporation makes such provision but fails to pay the Redemption Price
on the applicable Redemption Date, then the holders of Class A Preferred Stock
shall be entitled to vote on any such amendment, alteration or repeal, and any
such amendment, alteration or repeal taken without the consent of the holders
of at least 66 2/3% of the outstanding shares of Class A Preferred Stock shall
be void.
 
  (c) ISSUANCE OF ADDITIONAL CLASS A PREFERRED STOCK; CREATION OF SENIOR
STOCK. For as long as any shares of Class A Preferred Stock remain
outstanding, the affirmative vote of the holders of at least 66 2/3% of such
outstanding shares (voting separately as a class), given in Person or by proxy
at any annual meeting or special meeting called for such purpose, shall be
necessary before the Corporation or the Board of Directors may (x) issue
additional shares of Class A Preferred Stock or (y) create or issue any Senior
Stock; provided, however, that no such consent shall be necessary if, at or
prior to the time of such creation or issue of Senior Stock, provision is made
for the redemption of all of the outstanding shares of Class A Preferred Stock
(except that no such provision may be made prior to the Initial Redemption
Date); provided further, however, that if the Corporation makes such provision
but fails to pay the Redemption Price on the applicable Redemption Date, then
the holders of Class A Preferred Stock shall be entitled to vote on the
creation or issuance of any such Senior Stock, and the creation or issuance of
any such Senior Stock without the consent of the holders of at least 66 2/3%
of the outstanding shares of Class A Preferred Stock shall be void.
 
  (d) NO OTHER VOTE. Except as otherwise set forth in this paragraph (10) or
as required by law, the holders of Class A Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers
and the consent or vote of such holders shall not be required for the taking
of any corporate action by the Corporation or the Board of Directors.
 
  (11) WAIVER. Any provision of this Article IV, Section B which, for the
benefit of the holders of Class A Preferred Stock, prohibits, limits or
restricts actions by the Corporation may be waived in whole or in part, or the
application of all or any part of such provision in any particular
circumstance or generally may be waived, in each case with the consent of the
holders of at least 66 2/3% of the number of shares of Class A Preferred Stock
then outstanding, either in writing or by vote at a meeting called for such
purpose at which the holders of Class A Preferred Stock shall vote as a
separate class.
 
  (12) CERTAIN COVENANTS.
 
  (a) TRANSACTIONS WITH AFFILIATES. As long as any shares of Class A Preferred
Stock are outstanding, the Corporation shall not, and shall not permit any
Subsidiary or Wholly Owned Subsidiary to, enter into any
 
                                      26

 
transaction with an Affiliate unless such transaction is on terms that are no
less favorable to the Corporation or such Subsidiary or Wholly Owned
Subsidiary than those that would reasonably be expected to be obtained in a
comparable transaction with a Person that is not an Affiliate; provided,
however, that the provisions of this subparagraph (12)(a) shall not apply to
transactions (i) between the Corporation and its Subsidiaries or its Wholly
Owned Subsidiaries, (ii) between Subsidiaries, (iii) between Wholly Owned
Subsidiaries or (iv) between Subsidiaries and Wholly Owned Subsidiaries.
 
  (b) SEC REPORTS. As long as any shares of Class A Preferred Stock are
outstanding, the Corporation shall timely file with the SEC copies of such
reports, information and other documents that the Corporation is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act and,
within 15 days after such filing is required to be made, mail copies of such
reports, information and other documents to the registered holders of the
Class A Preferred Stock. If at any time while shares of Class A Preferred
Stock are outstanding the Corporation is not required to, and does not, have
any class of securities registered under the Exchange Act, then the
Corporation shall prepare comparable reports, information and documents and
mail the same to the registered holders of shares of Class A Preferred Stock
within 15 days after the date the Corporation would have been required to file
such reports, information or other documents with the SEC had the Corporation
continued to have securities registered under the Exchange Act.
 
  (13) STATUS OF REDEEMED OR EXCHANGED SHARES. All shares of Class A Preferred
Stock redeemed or exchanged by the Corporation shall be retired and shall not
be reissued as Class A Preferred Stock.
 
  (14) EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by law,
the shares of Class A Preferred Stock shall not have any designations,
preferences, limitations or relative rights other than those specifically set
forth in this Article IV, Section B.
 
                                   SECTION C
 
                            SERIES PREFERRED STOCK
 
  The Series Preferred Stock may be issued, from time to time, in one or more
series, with such powers, designations, preferences and relative,
participating, optional or other rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in a resolution or
resolutions providing for the issue of each such series adopted by the Board
of Directors or a duly authorized committee thereof. The Board of Directors
(or committee thereof), in such resolution or resolutions (a copy of which
shall be filed and recorded as required by law), is also expressly authorized
to fix with respect to each series:
 
    (a) the distinctive serial designations and the division of such shares
  into series and the number of shares of a particular series, which may be
  increased or decreased, but not below the number of shares thereof then
  outstanding, by a certificate made, signed, filed and recorded as required
  by law;
 
    (b) the dividend rate or amounts, if any, for the particular series, the
  date or dates from which dividends on all shares of such series shall be
  cumulative, if dividends on stock of the particular series shall be
  cumulative and the relative rights of priority, if any, or participation,
  if any, with respect to payment of dividends on shares of that series;
 
    (c) the rights of the shares of each series in the event of voluntary or
  involuntary liquidation, dissolution or winding up of the Corporation, and
  the relative rights of priority, if any, of payment of shares of each
  series;
 
    (d) the right, if any, of the holders of a particular series to convert
  or exchange such stock into or for other classes or series of a class of
  stock or indebtedness of the Corporation or of another entity, and the
  terms and conditions of such conversion or exchange, including provision
  for the adjustment of the conversion or exchange rate in such events as the
  Board of Directors may determine;
 
    (e) the voting rights, if any, of the holders of a particular series
  (which may be in addition to or in lieu of those specified in this
  Certificate); and
 
                                      27

 
    (f) the terms and conditions, if any, for the Corporation to purchase or
  redeem shares of a particular series.
 
                                   SECTION D
 
                              UNCLAIMED DIVIDENDS
 
  Any and all right, title, interest and claim in or to any dividends declared
by the Corporation, whether in cash, stock or otherwise, which are unclaimed
for a period of four years after the close of business on the payment date,
shall be and be deemed extinguished and abandoned; and such unclaimed
dividends in the possession of the Corporation, its transfer agent or other
agents or depositories, shall at such time become the absolute property of the
Corporation, free and clear of any and all claims of any persons whatsoever.
 
                                   ARTICLE V
 
                                   DIRECTORS
 
                                   SECTION A
 
                              NUMBER OF DIRECTORS
 
  The governing body of the Corporation shall be a Board of Directors. The
number of directors shall not be less than three (3) and the exact number of
directors shall be fixed by the Board of Directors by resolution. Election of
directors need not be by written ballot.
 
                                   SECTION B
 
                       ELECTION AND REMOVAL OF DIRECTORS
 
  Directors shall be elected for a one-year term at each annual meeting of
stockholders. Election of directors need not be by written ballot. Directors
may be removed from office with or without cause upon the affirmative vote of
the holders of at least 66 2/3% of the total voting power of the then
outstanding shares of Class A Common Stock, Class B Common Stock and any class
or series of Preferred Stock entitled to vote generally at an election of
directors, voting together as a single class.
 
                                   SECTION C
 
                   NEWLY CREATED DIRECTORSHIPS AND VACANCIES
 
  Subject to the provisions of any Preferred Stock relating to a special
election of directors, vacancies on the Board of Directors resulting from
death, resignation, removal, disqualification or other cause, and newly
created directorships resulting from any increase in the number of directors
on the Board of Directors, shall be filled by the affirmative vote of a
majority of the remaining directors then in office (even though less than a
quorum) or by the sole remaining director. Any director elected in accordance
with the preceding sentence shall hold office until the next annual meeting of
stockholders and until such director's successor shall have been elected and
qualified. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
 
 
                                      28

 
                                   SECTION D
 
                  LIMITATION ON LIABILITY AND INDEMNIFICATION
 
  (1) LIMITATION ON LIABILITY.
 
  To the fullest extent permitted by the Delaware General Corporation Law as
the same exists or may hereafter be amended, a director of the Corporation
shall not be liable to the Corporation or any of its stockholders for monetary
damages for breach of fiduciary duty as a director. Any repeal or modification
of this paragraph 1 shall be prospective only and shall not adversely affect
any limitation, right or protection of a director of the Corporation existing
at the time of such repeal or modification.
 
  (2) INDEMNIFICATION.
 
  (a) RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director or officer of the Corporation or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust, enterprise or nonprofit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
(including attorneys' fees) reasonably incurred by such person. Such right of
indemnification shall inure whether or not the claim asserted is based on
matters which antedate the adoption of this Section D. The Corporation shall
be required to indemnify or make advances to a person in connection with a
proceeding (or part thereof) initiated by such person only if the proceeding
(or part thereof) was authorized by the Board of Directors of the Corporation.
 
  (b) PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses
(including attorneys' fees) incurred in defending any proceeding in advance of
its final disposition, provided, however, that the payment of expenses
incurred by a director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the director
or officer to repay all amounts advanced if it should be ultimately determined
that the director or officer is not entitled to be indemnified under this
paragraph or otherwise.
 
  (c) CLAIMS. If a claim for indemnification or payment of expenses under this
paragraph is not paid in full within 60 days after a written claim therefor
has been received by the Corporation, the claimant may file suit to recover
the unpaid amount of such claim and, if successful in whole or in part, shall
be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification or payment of expenses under
applicable law.
 
  (d) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by this
paragraph shall not be exclusive of any other rights which such person may or
hereafter acquire under any statute, provision of this Certificate, the
Bylaws, agreement, vote of stockholders or disinterested directors or
otherwise.
 
  (e) OTHER INDEMNIFICATION. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or nonprofit entity shall be reduced by any amount such
person may collect as indemnification from such other corporation,
partnership, joint venture, trust, enterprise or nonprofit entity.
 
  (3) AMENDMENT OR REPEAL.
 
  Any repeal or modification of the foregoing provisions of this Section D
shall not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification.
 
                                      29

 
                                   SECTION E
 
                              AMENDMENT OF BYLAWS
 
  In furtherance and not in limitation of the powers conferred by the laws of
the State of Delaware, the Board of Directors, by action taken by the
affirmative vote of not less than a majority of the members of the Board of
Directors then in office, is hereby expressly authorized and empowered to
adopt, amend or repeal any provision of the Bylaws of this Corporation.
 
  (1) This Restated Certificate of Incorporation was duly adopted by vote of
the sole stockholder of the Corporation in accordance with Sections 242 and
245 of the Delaware General Corporation Law.
 
  (2) Effective upon the filing of this Restated Certificate of Incorporation
with the Secretary of State of the State of Delaware (the "Effective Time"),
the one hundred (100) shares of Common Stock of the Corporation, par value
$0.10 per share, issued and outstanding immediately prior to the Effective
Time ("Old Common Stock") shall thereupon be reclassified as and changed into
six million, two hundred and fifty-seven thousand, nine hundred and sixty-one
(6,257,961) shares of Class A Common Stock. Such shares of Class A Common
Stock shall be fully paid and nonassessable.
 
  Each holder of a certificate representing issued and outstanding shares of
Old Common Stock at the Effective Time shall be entitled upon surrender of
such certificate to the Corporation for cancellation to receive new
certificates representing the number of shares of Class A Common Stock into
which such issued and outstanding shares of Old Common Stock are reclassified
and changed as provided herein.
 
  IN WITNESS WHEREOF, the undersigned has signed this Restated Certificate of
Incorporation this 31st day of July, 1996.
 
                                          Viacom International Inc.

                                              /s/ Michael D. Fricklas
                                          By: _________________________________
                                              Title: Senior Vice President
                                              Name:  Michael D. Fricklas
 
                                      30