<PAGE>
 
                                                                    EXHIBIT 10.1


THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDEDUserFinancial Printing GroupTHE SECURITIES REPRESENTED BY THIS INSTRUMENT
HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT.  IN ADDITION, THE TRANSFERABILITY OF THESE SECURITIES IS RESTRICTED AS
SET FORTH BELOW.



                       TCI SATELLITE ENTERTAINMENT, INC.

                                                                  April 28, 1999


 

              Share Appreciation Rights with Respect to Shares of
              ---------------------------------------------------
              Class H Common Stock of General Motors Corporation
              --------------------------------------------------


                               _________________


                            Void After May 10, 2000

                               _________________


          The undersigned TCI SATELLITE ENTERTAINMENT, INC. (the "Issuer"),
HEREBY GRANTS to PRIMESTAR, Inc. ("Primestar"), its successors and permitted
assigns (collectively, the "Holder"), the number of share appreciation rights
(the "Share Appreciation Rights" or "SARs") set forth on the signature page of
this agreement (this "Agreement").  Each SAR represents the right of the Holder
to receive from the Issuer, on the terms and conditions set forth herein, the
Per Share Settlement Amount (as defined herein), if any, with respect to one
share of Class H Common Stock, $0.10 par value per share (the "GMH Stock"), of
General Motors Corporation (as each such share of GMH Stock is adjusted from
time to time as provided in Section 2 of this Agreement, a "Covered Share").
The Share Appreciation Rights are being issued pursuant to an Agreement dated as
of January 22, 1999 (the "TSAT Agreement") among the Issuer, Primestar and
certain stockholders of Primestar.  Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in Section 16 of this
Agreement.

          SECTION 1.  Exercise of SARs.  (a)  The SARs represented by this
                      ----------------                                    
Agreement shall automatically be exercised for the benefit of the Holder on May
5, 2000 (the "Determination Date").
<PAGE>
 
          (b) On the Determination Date, the Holder shall be entitled to receive
from the Issuer a payment in cash in respect of each SAR owned by the Holder on
the Determination Date equal to (x) the Fair Market Value of a Covered Share on
the Determination Date plus (y) the Distribution Amount (if any) per Covered
                       ----                                                 
Share, minus (z) the Strike Price per Covered Share (such amount so calculated,
       -----                                                                   
the "Per Share Settlement Amount").  The gross payment to be made to the Holder
shall be equal to the product of the Per Share Settlement Amount multiplied by
the total number of SARs owned by the Holder (the "Aggregate Settlement
Amount"); provided, however, that if the Aggregate Settlement Amount on the
          --------  -------                                                
Determination Date is equal to or less than zero, then no payment shall be
required to be made by the Issuer hereunder.  The SARs shall be exercisable
solely for cash as provided herein, and do not represent a right to purchase or
receive any shares of GMH Stock or any other property.  Payment of the Aggregate
Settlement Amount shall be made by wire transfer in immediately available funds
on the third business day following the Determination Date (the "Settlement
Date").  The Aggregate Settlement Amount shall be fixed on the Determination
Date.  If the Issuer shall fail to pay any part of the Aggregate Settlement
Amount hereunder (if any) on the Settlement Date, the unpaid portion of such
Aggregate Settlement Amount shall accrue interest from the Settlement Date until
the date paid, at the rate of 12% per annum, payable monthly.

     SECTION 2.  Adjustment of Strike Price and Covered Shares. Upon the
                 ---------------------------------------------          
occurrence of any Dilution Event, the Strike Price per Covered Share and the
Covered Shares subject to each SAR in effect immediately prior to such event
shall be adjusted as follows:

     a.   In the case of a Dilution Event of a type described in clauses (i),
          (ii), (iii) or (iv) of the definition thereof, the Covered Shares
          shall be adjusted to equal the number of shares of Covered Stock (or,
          in the case of a reclassification of the type described in clause (iv)
          of such definition, the number of shares of such other class or series
          of common stock of the Covered Share Issuer) which a holder of the
          Covered Shares immediately prior to such event would have owned or
          been entitled to receive in respect thereof immediately following such
          event.

     b.   In the case of a Dilution Event of the type described in clause (v) of
          such definition, the Covered Shares shall be adjusted to equal the
          number of shares of Covered Stock equal to the number of such shares
          constituting the Covered Shares immediately prior to such Dilution
          Event, times a fraction, the numerator of which shall be (1) the
                 -----                                                    
          number of shares of Covered Stock outstanding on the record date for
          such event, plus (2) the number of additional shares of Covered Stock
          offered for subscription or purchase pursuant to such rights or
          warrants, and the denominator of which shall be (x) the number of
          shares of Covered Stock outstanding on the record date for such event,
          plus (y) the number of additional shares of Covered Stock which the
          aggregate offering price of the total number of shares of Covered
          Stock offered pursuant to such rights or warrants would purchase at
          the Fair Market Value of the Covered Stock on the business day next
          following the record date for such issuance; provided, however, that
                                                       --------  -------      
          if any such rights or warrants shall expire without exercise on or
          before the Determination Date, then an appropriate adjustment shall be
          made to reverse the 

                                       2
<PAGE>
 
          adjustment provided for by this clause (b) to the extent of such
          expired unexercised rights or warrants.

     c.   In the case of any Dilution Event, the Strike Price per Covered Share
          shall be adjusted by multiplying the Strike Price in effect
          immediately prior to such event by a fraction, the numerator of which
          shall be the number of shares of Covered Stock constituting the
          Covered Shares immediately prior to such event, and the denominator of
          which shall be the number of shares of Covered Stock constituting the
          Covered Shares immediately following such event.

     d.   Any shares of Covered Stock issuable in payment of a dividend shall be
          deemed to have been issued immediately prior to the close of business
          on the record date for such dividend for purposes of calculating the
          number of outstanding shares of Covered Stock under this paragraph 2.

     e.   All calculations under this Section shall be made to the nearest $.001
          or to the nearest one-tenth of a share, as the case may be.

          SECTION 3.  Reorganization Events.  (a)  In the event, at any time
                      ---------------------                                 
during the period from the date hereof through the trading day immediately
preceding the Determination Date (such period, the  "Adjustment Period"), of (i)
any capital reorganization of the Covered Share Issuer, (ii) any
reclassification of the capital stock of the Covered Share Issuer (other than a
change in par value or from par value to no par value or from no par value to
par value or as a result of a stock dividend or subdivision, split-up or
combination of shares), (iii) any consolidation or merger of the Covered Share
Issuer with or into another person (other than a consolidation or merger in
which the Covered Share Issuer is the continuing corporation and which does not
result in any change in the common stock of the Covered Share Issuer), (iv) any
statutory exchange in which the Covered Shares are mandatorily exchanged for
securities of another issuer, (v) any sale, transfer, assignment or other
disposition of 80% or more of the business of Hughes Electronics Corporation
("Hughes") (based on the fair market value of the assets, both tangible and
intangible, of Hughes as of the time that any such proposed sale, transfer,
assignment or other disposition is approved by the board of directors of the
Covered Share Issuer), or  (vi) any complete liquidation of the Covered Share
Issuer (any such event, a "Reorganization Event"), then after the consummation
of such Reorganization Event, all references herein to the Covered Shares shall
mean and refer to the kind and number of shares of stock or other securities or
property of the Covered Share Issuer (or of the person or entity resulting from
such Reorganization Event) to which the Holder would have otherwise been
entitled if the Holder had held the Covered Shares as in effect hereunder
immediately prior to such Reorganization Event; provided, however, that in the
                                                --------  -------             
case of any Reorganization Event that provides for alternate forms of
consideration, after the consummation of such Reorganization Event, all
references herein to the Covered Shares shall mean and refer to the kind and
number of shares of stock or other securities or property of the Covered Share
Issuer (or of the person or entity resulting from such Reorganization Event)
into or for which the shares of Covered Stock pledged under the Pledge and
Security Agreement immediately prior to such Reorganization Event are converted,
exchanged or redeemed in such Reorganization Event. The provisions of this
Section 3 shall similarly apply to successive reorganizations,
reclassifications, consolidations and mergers and sales and other dispositions.

                                       3
<PAGE>
 
          (b)  Anything contained herein to the contrary notwithstanding, if
upon the consummation of any Reorganization Event, the Covered Shares shall
consist solely of cash and/or property other than Reported Securities, then
within 30 days after the closing of such Reorganization Event and the receipt by
the Issuer (or by the Collateral Agent under the Pledge and Security Agreement)
of such cash and/or property other than Reported Securities, the Issuer shall
provide the Holder with the written notice required by Section 4 of this
Agreement, which notice shall include the Fair Market Value per Covered Share,
as determined in accordance with this Agreement, and the date of such notice
shall constitute the Determination Date for all purposes hereof.

          SECTION 4.  Notice of Certain Transactions.  In the event of (a) any
                      ------------------------------                          
adjustment in the Strike Price after the date hereof, (b) the consummation of
any Reorganization Event, or (c) receipt by the Issuer of any Dividend, the
Issuer shall give written notice thereof to the Holder, including in any such
notice pursuant to clause (b) of this Section 4  (to the best knowledge of the
Issuer) the number, kind or class of shares or other securities or property
which shall constitute the Covered Shares after the occurrence of such action.
The Holder acknowledges that any such notice shall be based on publicly
available information provided by or on behalf of the Covered Share Issuer and
that the Holder is responsible for confirming the information and calculations
set forth therein. The Issuer shall not have any liability whatsoever for any
error or omission in such notice, except for any such error or omission
resulting solely from the bad faith or gross negligence of the Issuer.

          SECTION 5.  Certain Other Rights of Holder.  The Holder shall be
                      ------------------------------                      
entitled to the rights of the Secured Party under the Pledge and Security
Agreement, in accordance with the terms thereof.

          SECTION 6.  Transfer and Securities Law Provisions.
                      -------------------------------------- 

          (a)  The issuance of the SARs has not been registered under the
Securities Act, or under the securities or "blue sky" laws of any state, in
reliance upon exemptions from the registration provisions thereof.  Holder
represents that it is acquiring the SARs for investment for its own account, and
not with the view to, or for resale in connection with, any distribution
thereof, nor with any present intention of distributing the same.

          (b)  The SARs shall not be transferable, except to the Collateral
Agent under and otherwise in accordance with the terms of, the Primestar Pledge
and Security Agreement.

          SECTION 7.  Lost, Stolen, Mutilated or Destroyed SAR.  If this
                      ----------------------------------------          
Agreement is lost, stolen, mutilated or destroyed, the Issuer may, on such terms
as to indemnity or otherwise as it may in its discretion impose (which shall, in
the case of a mutilated Agreement, include the surrender thereof), provide the
Holder with a duplicate counterpart of this Agreement with respect to the SARs
represented thereby.  Any such new SAR Agreement shall constitute a separate
contractual obligation of the Issuer in accordance with its terms, whether or
not the allegedly lost, stolen, mutilated or destroyed SAR Agreement shall be at
any time enforceable by anyone.

                                       4
<PAGE>
 
          SECTION 8.  No Stockholder Rights.  Neither this Agreement nor the
                      ---------------------                                 
SARs represented hereby shall entitle the Holder to any voting rights or other
rights as a holder of Covered Shares or a stockholder of the Issuer.

          SECTION 9.  Withholding for Taxes.  It shall be a condition precedent
                      ---------------------                                    
to any exercise of the SARs represented hereby that the Holder make provision
acceptable to the Issuer for the payment or withholding of any and all Federal,
state and local taxes required to be withheld by the Issuer to satisfy any tax
liability of the Holder associated with such exercise, as determined in good
faith by the Board of Directors of the Issuer on the advice of counsel.

          SECTION 10. Notices.  All notices, requests, demands, claims, and
                      -------                                              
other communications hereunder will be in writing.  Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) upon
telephonic confirmation of facsimile, (ii) when sent by overnight delivery or
(iii) when mailed by registered or certified mail, return receipt requested,
postage prepaid, to the intended recipient at the address or telecopier number
for such recipient (i) if such recipient is the Issuer, set forth below:

                    TCI Satellite Entertainment, Inc.
                    8085 South Chester, Suite 300
                    Englewood, Colorado 80112
                    Telephone:  (303) 712-4600
                    Telecopy:  (303) 712-4977
                    Attention: Chief Financial Officer


                    with a copy to:


                    Baker & Botts, L.L.P.
                    599 Lexington Avenue
                    New York, New York 10022
                    Telephone: (212) 705-5000
                    Telecopy: (212) 705-5125
                    Attention: Elizabeth M. Markowski, Esq.

and (ii) if such recipient is the Holder, as set forth on the signature pages
hereto, with a copy to:

                    Baker & Botts, L.L.P.
                    599 Lexington Avenue
                    New York, New York 10022
                    Telephone: (212) 705-5000
                    Telecopy: (212) 705-5125
                    Attention: Marc A. Leaf, Esq.

                                       5
<PAGE>
 
Notices, requests, demands, claims and other communications may be sent using
any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient.  Any party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other party notice in the manner herein set forth, but no such notice
shall be deemed given until actually received.

          SECTION 11.  Governing Law.  This Agreement and the SARs represented
                       -------------                                          
hereby shall be construed in accordance with and governed by the internal laws
of the State of New York without giving effect to any conflicts of laws
principles. Each party hereto hereby irrevocably submits to the jurisdiction of
any New York State court sitting in the Borough of Manhattan or any federal
court sitting in the Borough of Manhattan in respect of any suit, action or
proceeding arising out of or relating to this Agreement and the transactions
pursuant hereto and in connection herewith, and irrevocably agrees that all
claims in respect of any such suit, action or proceeding shall be heard and
determined in such court. Each party irrevocably waives any objection which it
may now or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.

          SECTION 12.  Construction.  References in this Agreement to "this
                       ------------                                        
Agreement" and  the words "herein," "hereof," "hereunder" and similar terms
refer to this Agreement, including all Schedules as a whole, unless the context
otherwise requires.  The headings of the paragraphs of this Agreement have been
included for convenience of reference only, are not to be considered a part
hereof and shall not modify or restrict any of the terms or provisions hereof.

          SECTION 13.  Duplicate Originals.  The Issuer and Holder may sign any
                       -------------------                                     
number of copies of this Agreement.  Each signed copy shall be an original, but
all of them together represent the same agreement.

          SECTION 14.  Entire Agreement.  This Agreement, together with the TSAT
                       ----------------                                         
Agreement and the Pledge and Security Agreement, contains the entire agreement
between the parties hereto with respect to the SARs and supersedes any prior or
contemporaneous agreements and understandings, other than the Primestar Pledge
and Security Agreement, between the Issuer and the Holder or any other person
regarding the SARs.

          SECTION 15.  Amendment.  This Agreement may be reasonably amended,
                       ---------                                            
modified or supplemented by the Issuer, without the consent of the Holder to
cure any ambiguity or to correct or supplement any provision herein which may be
defective.  Except as provided above, this Agreement may be amended, modified or
supplemented only by written agreement of the parties  hereto or their permitted
assigns and transferees.

          SECTION 16.  Definitions.  As used in this Agreement, the following
                       -----------                                           
terms shall have the corresponding meanings:

                                       6
<PAGE>
 
          "Adjustment Period"  is defined in Section 3.

          "Aggregate Settlement Amount" is defined in Section 1.

          "Agreement" is defined in the initial paragraph of this Agreement.

          "Appraiser" means an investment banking firm of national reputation
that is not affiliated with Hughes, the Issuer or the Holder and has been
selected to act as the "Appraiser" within the meaning of those certain share
appreciation rights, being originally issued on the date hereof by Primestar
with respect to 4,871,448 shares of GMH Stock pursuant to a Lock-up Agreement
dated April 20, 1999, between Primestar and the Holders signatory thereto.

          "Closing Price" of a share of any class or series of capital stock on
any day means the last sale price (or, if no last sale is reported, the average
of the high bid and low asked prices) for a share of such class or series of
capital stock on such day (or, if such day is not a trading day, on the
immediately preceding trading day) as quoted on the principal United States
national stock exchange on which such shares are listed, or if such class or
series of  capital stock is not listed on a United States national stock
exchange, as reported on NASDAQ or, if not reported on NASDAQ, as quoted by the
National Quotation Bureau Incorporated.  If for any trading day the Closing
Price of a share of such class or series of capital stock is not determinable by
any of the foregoing means, then the Closing Price for such day shall be
determined in good faith by the issuer's Board of Directors on the basis of such
quotations and other considerations as such Board may deem appropriate.

          "Covered Share Issuer" shall mean General Motors Corporation or such
other entity as shall be the issuer of the Covered Shares.

          "Covered Shares" shall mean the number of shares of GMH Stock subject
to each SAR (which initially shall be one), as the same shall be adjusted from
time to time in accordance with this Agreement.

          "Covered Stock" means the GMH Stock or such other class or series of
stock of the Covered Share Issuer represented by the Covered Shares.

          "Determination Date" is defined in Section 1, subject to adjustment as
provided in Section 3.

          "Dilution Event" means the occurrence of any of the following actions
by the Covered Share Issuer:

          (i)   the payment of a stock dividend or distribution on the Covered
Stock, payable in additional shares of Covered Stock;

          (ii)  any stock split or other subdivision of the Covered Stock;

                                       7
<PAGE>
 
          (iii) any reverse stock split or combination of the Covered
Stock into a smaller number of shares of such stock;

          (iv)  the issuance by reclassification of the Covered Stock of shares
of any other class or series of common stock of the Covered Share Issuer (other
than any stock split, reverse stock split or other transaction of the type
described in clause (ii) or (iii) of this definition, and other than a
reclassification that would constitute a Reorganization Event); or

          (v)   the issuance of any rights or warrants to all holders of the
Covered Stock, entitling them to subscribe for or purchase shares of Covered
Stock (other than any dividend reinvestment or odd lot plan) at a price per
share less than the Fair Market Value of such shares on the business day next
following the record date for such issuance.

          "Distribution Amount" means, for each Covered Share, the amount of all
Dividends paid in respect of such Covered Share, the record date for which shall
occur on or after the date hereof and prior to the fifth business day preceding
the Determination Date.  To the extent that any such Dividend is paid in
securities or other property, other than cash, the amount of such Dividend shall
be determined as follows:

          (i)  for any Reported Securities received in any Dividend, such amount
     shall be the Fair Market Value of such Reported Securities on the
     Determination Date;  and

          (ii) for any property received in any Dividend other than cash or
     Reported Securities, such amount shall be the Fair Market Value of such
     property on the date such property is received.

For purposes of calculating the Distribution Amount, any cash, Reported
Securities or other property receivable in a Dividend shall be deemed to have
been received immediately prior to the close of business on the record date for
such Dividend or, if there is no record date for such Dividend, immediately
prior to the close of business on the effective date of such Dividend.

          "Dividend" means any dividend or distribution payable on all the
outstanding Covered Stock, other than any dividend or distribution that would
constitute a Dilution Event or Reorganization Event.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute or statutes thereto, and the rules
and regulations promulgated by the Securities and Exchange Commission
thereunder.  References to any specific section of the Exchange Act or rule
thereunder shall include any successor section or rule.

          "Fair Market Value" means, as of any date, (i) in the case of any
Reported Security, the average of the Closing Prices of such Reported Security
for each of the five trading days immediately preceding such date, and (ii) in
the case of any other property, the fair market value of 

                                       8
<PAGE>
 
such property on such date, as determined by the Appraiser, taking into account
all circumstances deemed relevant by the Appraiser.

          "GMH Stock" is defined in the initial paragraph of this Agreement.

          "Holder" is defined in the initial paragraph of this Agreement.

          "Hughes" is defined in Section 3.

          "Issuer" is defined in the initial paragraph of this Agreement.
          "NASDAQ" means The Nasdaq Stock Market, Inc.

          "Per Share Settlement Amount" is defined in Section 1.

          "Pledge and Security Agreement" means the Pledge and Security
Agreement, dated as of the date hereof, between the Issuer and the Collateral
Agent, for the benefit of Primestar as the Holder of the SARs.

          "Primestar Pledge and Security Agreement" means the Pledge and
Security Agreement, dated as of the date hereof, between Primestar and the
Collateral Agent named therein, for the ratable benefit of the holders of
certain share appreciation rights issued by Primestar on the date hereof with
respect to 4,871,448 shares of GMH Stock pursuant to a Lock-up Agreement dated
April 20, 1999, between Primestar and the Holders signatory thereto and
represented by agreements substantially in the form of this Agreement.

          "Reorganization Event" is defined in Section 3.

          "Reported Securities" means any securities that (A) are (i) listed on
a United States national securities exchange, (ii) reported on a United States
national securities system subject to last sale reporting, or (iii) traded in
the over-the-counter market and reported on the National Quotation Bureau or
similar organization and (B) are either (x) perpetual equity securities or (y)
non-perpetual equity or debt securities with a stated maturity after the
Determination Date.

          "SARs" means Share Appreciation Rights.

          "Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor statute or statutes thereto, and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder.
Reference to any specific section of the Securities Act or rule thereunder shall
include any successor section or rule.

          "Settlement Date" is defined in Section 1.

          "Share Appreciation Rights" is defined in the initial paragraph of
this Agreement.

                                       9
<PAGE>
 
          "Strike Price" means, initially, $47 per Covered Share, as such amount
may be adjusted from time to time in accordance with the terms of this
Agreement.

          "TSAT Agreement" is defined in the initial paragraph of this
Agreement.

                                       10
<PAGE>
 
          IN WITNESS WHEREOF, the undersigned has executed this signature page
intending to be bound by the foregoing Share Appreciation Rights Agreement as of
the date first above written.

                              TCI SATELLITE ENTERTAINMENT, INC.



                              --------------------------------------------------
                              By:
                              Name:


ATTEST:

-----------------------
Secretary




Number of Share Appreciation Rights:


   1,407,307
 ----------------------

                                       11
<PAGE>
 
          IN WITNESS WHEREOF, the undersigned has executed this signature page
intending to be bound by the foregoing Share Appreciation Rights Agreement as of
the date first above written.

                              PRIMESTAR, INC.


                              By:_____________________________________
                              Name:
                              Title:
                              Address:  8085 South Chester, Suite 300
                                        Englewood, Colorado 80112
                                        Attention: Chief Financial Officer
                              Telecopy No.:    (303) 712-4977
                              Telephone  No.:  (303) 712-4600
                              Taxpayer Identification No.: 84-1441684


Number of Share Appreciation Rights:


   1,407,307
 -------------------

                                       12