<PAGE>   1
                                                                     Exhibit 3.1


 
                               State of Delaware
                                                                          PAGE 1
                        Office of the Secretary of State

                             ---------------------
 
     I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF
"TCI/LIBERTY HOLDING COMPANY". CHANGING ITS NAME FROM "TCI/LIBERTY HOLDING
COMPANY" TO "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE FOURTH DAY
OF AUGUST, A.D. 1994, AT 4:14 O'CLOCK P.M.
 
     A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT COUNTY
RECORDER OF DEEDS FOR RECORDING.



 
                              [SEAL]
                                                  /s/  EDWARD J. FREEL
                                            Edward J. Freel, Secretary of State
 
                                            AUTHENTICATION: 7202362
 
                                            DATE: 08-04-94
2371729 8100
 
944145668
<PAGE>   2
 
                                                   STATE OF DELAWARE
                                                   SECRETARY OF STATE
                                                DIVISION OF CORPORATIONS
                                               FILED 04:14 PM 08/04/1994
                                                  944145668 -- 2371729
 
                     RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                          TCI/LIBERTY HOLDING COMPANY
 
                             ---------------------
 
     TCI/LIBERTY HOLDING COMPANY, a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
 
          (1) The name of the Corporation is TCI/Liberty Holding Company. The
     original Certificate of Incorporation of the Corporation was filed on
     January 24, 1994. The name under which the Corporation was originally
     incorporated is TCI/Liberty Holding Company.
 
          (2) This Restated Certificate of Incorporation restates and amends the
     Certificate of Incorporation of the Corporation.
 
          (3) Pursuant to Section 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 Tele-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., 32
Loockerman Square, Suite L-100, Dover, Kent County, Delaware 19904, and 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.
<PAGE>   3
 
                                   ARTICLE IV
 
                                AUTHORIZED STOCK
 
     The total number of shares of capital stock which the Corporation shall
have authority to issue is one billion two hundred sixty two million three
hundred seventy five thousand ninety six (1,262,375,096) shares, of which one
billion two hundred fifty million (1,250,000,000) shares shall be common stock
("Common Stock") and twelve million three hundred seventy five thousand ninety
six (12,375,096) shares shall be preferred stock ("Preferred Stock"). Said
shares of Common Stock and Preferred Stock shall be divided into the following
classes:
 
     (a) One billion one hundred million (1,100,000,000) shares of Common Stock
shall be of a class designated as Class A Common Stock with a par value of $1.00
per share;
 
     (b) One hundred fifty million (150,000,000) shares of Common Stock shall be
of class designated as Class B Common Stock with a par value of $1.00 per share;
 
     (c) Seven hundred thousand (700,000) shares of Preferred Stock shall be of
a class designated as Class A Preferred Stock with a par value of $.01 per
share;
 
     (d) One million six hundred seventy five thousand and ninety six
(1,675,096) shares of Preferred Stock shall be of a class designated as Class B
6% Cumulative Redeemable Exchangeable Junior Preferred Stock with a par value of
$.01 per share; and
 
     (e) Ten million (10,000,000) shares of Preferred Stock shall be of a class
designated as Series Preferred Stock with a par value of $.01 per share.
 
     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:
 
                                       -2-
<PAGE>   4
 
                                   SECTION A
 
                              CERTAIN DEFINITIONS
 
     Unless the context otherwise requires, the terms defined in this Section A
shall have, for all purposes of this Article IV, the meanings herein specified:
 
     "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 not required
to be open.
 
     "capital stock" shall mean any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) corporate stock.
 
     "Certificate" shall mean this Restated Certificate of Incorporation of the
Corporation, as it may from time to time hereafter be amended or restated.
 
     "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
government or agency or political subdivision thereof, or other entity, whether
acting in an individual fiduciary or other capacity.
 
                                   SECTION B
 
                            CLASS A PREFERRED STOCK
 
     The Class A 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 Section B, the
meanings herein specified:
 
     "Class A Common Stock" shall mean the Class A Common Stock, par value $1.00
per share, of the Corporation, which term shall include, where appropriate, in
the case of any reclassification, recapitalization or other change in the Class
A Common Stock, or in the case of a consolidation or merger of the Corporation
with or into another Person affecting the Class A Common Stock, such capital
stock to which a holder of Class A Common Stock shall be entitled upon the
occurrence of such event.
 
                                       -3-
<PAGE>   5
 
     "Class A Preferred Stock" shall mean the Class A Preferred Stock, par value
$.01 per share, of the Corporation.
 
     "Class B Common Stock" shall mean the Class B Common Stock, par value $1.00
per share, of the Corporation, which term shall include, where appropriate, in
the case of any reclassification, recapitalization or other change in the Class
B Common Stock, or in the case of a consolidation or merger of the Corporation
with or into another Person affecting the Class B Common Stock, such capital
stock to which a holder of Class B Common Stock shall be entitled upon the
occurrence of such event.
 
     "Class B Preferred Stock" shall mean the Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock, par value $.01 per share, of the
Corporation.
 
     "Dividend Payment Date" shall mean, for any Dividend Period, the last day
of such Dividend Period which shall be the first day of March of each year,
commencing with March 1, 1995, 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 and
including the first Dividend Payment Date and each annual period between
consecutive Dividend Payment Dates.
 
     "Issue Date" shall mean the date on which shares of Class A Preferred Stock
are first issued.
 
     "Junior Stock" shall mean (i) the Class A Common Stock, (ii) the Class B
Common Stock, (iii) the Class B Preferred Stock, (iv) any other class or series
of capital stock, whether now existing or hereafter created, of the Corporation,
other than (A) the Class A Preferred Stock, (B) any class or series of Parity
Stock (except to the extent provided under clause (v) hereof) and (C) any Senior
Stock, and (v) 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
(v) 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 payment, 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.
 
     "Liquidation Preference" measured per share of the Class A Preferred Stock
as of any date in question (the "Determination Date") shall mean an amount equal
to the sum of (a) the Stated Liquidation Value of such share, plus (b) an amount
equal to all dividends accrued on such share which pursuant to paragraph 2(b) of
this Section B have been added to and remain a part of the Liquidation
Preference as of the Determination Date, plus (c) for purposes of determining
the amounts payable pursuant to paragraph 3 and paragraph 4 of this Section B
and the definition of Redemption Price, an amount equal to all unpaid dividends
accrued on such share during the period from the immediately preceding Dividend
Payment Date (or the Issue Date if the
 
                                       -4-
<PAGE>   6
 
Determination Date is on or prior to the first Dividend Payment Date) through
and including the Determination Date, and, in the case of clauses (b) and (c)
hereof, whether or not such unpaid dividends have been earned or declared or
there are any unrestricted funds of the Corporation legally available for the
payment of dividends. In connection with the determination of the Liquidation
Preference of a share of Class A Preferred Stock upon redemption or upon
liquidation, dissolution or winding up of the Corporation, the Determination
Date shall be the applicable date of redemption or the date of distribution of
amounts payable to stockholders in connection with any such liquidation,
dissolution or winding up.
 
     "Parity Stock" shall mean 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 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 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.
 
     "Record Date" for the dividends payable on any Dividend Payment Date means
the fifteenth day of the month preceding the month during which such Dividend
Payment Date shall occur, or if any such day is not a Business Day, then on the
next preceding Business Day, as and if designated by the Board of Directors.
 
     "Redemption Date" as to any share of Class A Preferred Stock shall mean the
date fixed for redemption of such share pursuant to paragraph 4(a) or (b) of
this Section B, provided that no such date will be a Redemption Date unless the
applicable Redemption Price is actually paid in full on such date.
 
     "Redemption Price" as to any share of Class A Preferred Stock which is to
be redeemed on any Redemption Date shall mean the Liquidation Preference thereof
on such Redemption Date.
 
     "Senior Stock" shall mean any class or series of capital stock, whether now
existing or hereafter created, of the Corporation 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
 
                                       -5-
<PAGE>   7
 
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 provides.
 
     "Special Record Date" has the meaning ascribed to such term in paragraph
2(b) of this Section B.
 
     "Stated Liquidation Value" of a share of Class A Preferred Stock means
$322.84.
 
     "Subsidiary" of any Person 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 such Person
and/or one or more Subsidiaries of such Person and (ii) any other Person (other
than a corporation) in which such Person and/or one or more Subsidiaries of such
Person, directly or indirectly, has (x) a majority ownership interest or (y) the
power to elect or direct the election of a majority of the members of the
governing body of such first-named Person.
 
     2. Dividends.
 
     (a) DIVIDEND RIGHTS; DIVIDEND PAYMENT DATES. Subject to the prior
preferences and other rights of any Senior Stock and the provisions of paragraph
5 hereof, the holders of Class A Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors, out of unrestricted funds
legally available therefor, cumulative dividends, in preference to dividends on
any Junior Stock, that shall accrue on each share of Class A Preferred Stock at
the rate of 9 3/8% per annum of the Stated Liquidation Value of such share from
the Issue Date to and including the date on which the Liquidation Preference of
such share is made available (whether on liquidation, dissolution, or winding up
of the Corporation or, in the case of paragraph 4 of this Section B, upon the
applicable Redemption Date). Accrued dividends on the Class A Preferred Stock
will be payable, as provided in paragraph 2(c) below, annually on each Dividend
Payment Date to the holders of record of the Class A Preferred Stock as of the
close of business on the Record Date for such dividend payment. Dividends shall
be fully cumulative and shall accrue (without interest or compounding) on a
daily basis without regard to the occurrence of a Dividend Payment Date and
whether or not such dividends are declared and whether or not there are any
unrestricted funds of the Corporation legally available for the payment of
dividends. The amount of dividends "accrued" as of the first Dividend Payment
Date and as of any date that is not a Dividend Payment Date shall be calculated
on the basis of the foregoing rate per annum for the actual number of 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
 
                                       -6-
<PAGE>   8
 
last preceding Dividend Payment Date (in the case of any other date) to and
including the date as of which such determination is to be made, based on a 365-
or 366-day year, as the case may be.
 
     (b) SPECIAL RECORD DATE. On each Dividend Payment Date, all dividends that
have accrued on each share of Class A Preferred Stock during the immediately
preceding Dividend Period shall, to the extent not paid as provided in paragraph
2(c) below on such Dividend Payment Date for any reason (whether or not such
unpaid dividends have been earned or declared or there are any unrestricted
funds of the Corporation legally available for the payment of dividends), be
added to the Liquidation Preference of such share and will remain a part thereof
until such dividends are paid as provided in paragraph 2(c) below. No interest
or additional dividends will accrue or be payable with respect to any dividend
payment on the Class A Preferred Stock that may be in arrears or with respect to
that portion of any other payment on the Class A Preferred Stock that is in
arrears which consists of accumulated or accrued and unpaid dividends. Such
accumulated or accrued and unpaid dividends may be declared and paid at any time
(subject to the rights of any Senior Stock and, if applicable, to the concurrent
satisfaction of any dividend arrearages then existing with respect to any Parity
Stock which ranks on a parity basis with the Class A Preferred Stock as to the
payment of dividends) without reference to any regular Dividend Payment Date, to
holders of record as of the close of business on such date, not more than 45
days nor less than 10 days preceding the payment date thereof, as may be fixed
by the Board of Directors (the "Special Record Date"). Notice of each Special
Record Date shall be given, not more than 45 days nor less than 10 days prior
thereto, to the holders of record of the shares of Class A Preferred Stock.
 
     (c) METHOD OF PAYMENT. All dividends payable with respect to the shares of
Class A Preferred Stock shall be declared and paid in cash. All dividends paid
with respect to the shares of Class A Preferred Stock pursuant to this paragraph
2 shall be paid pro rata to all the holders of shares of Class A Preferred Stock
outstanding on the applicable Record Date or Special Record Date, as the case
may be.
 
     3. Distributions Upon Liquidation, Dissolution or Winding Up.
 
     Subject to the prior payment in full of the preferential amounts to which
any Senior Stock is entitled, in the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
Class A Preferred Stock shall be entitled to receive from the assets of the
Corporation available for distribution to stockholders, before any payment or
distribution shall be made to the holders of any Junior Stock, an amount in cash
or property at its fair market value, as determined by the Board of Directors in
good faith, or a combination thereof, per share, equal to the Liquidation
Preference of a share of Class A Preferred Stock as of the date of payment or
distribution, which payment or distribution shall be made pari passu with any
such payment or distribution made to the holders of any Parity Stock ranking on
a parity basis with the Class A Preferred Stock with respect to distributions
upon liquidation, dissolution or winding up of the Corporation. The holders of
Class A Preferred Stock shall be entitled to no other or further distribution of
or participation in any remaining assets of the Corporation after receiving the
Liquidation Preference per share. If, upon distribution of the
 
                                       -7-
<PAGE>   9
 
Corporation's assets in liquidation, dissolution or winding up, the assets of
the Corporation to be distributed among the holders of the Class A Preferred
Stock and to all holders of any Parity Stock ranking on a parity basis with the
Class A Preferred Stock with respect to distributions upon liquidation,
dissolution or winding up shall be insufficient to permit payment in full to
such holders of the respective preferential amounts to which they are entitled,
then the entire assets of the Corporation to be distributed to holders of the
Class A Preferred Stock and such Parity Stock shall be distributed pro rata to
such holders based upon the aggregate of the full preferential amounts to which
the shares of Class A Preferred Stock and such Parity Stock would otherwise
respectively be entitled. Neither the consolidation or merger of the Corporation
with or into any other corporation or corporations nor the sale, transfer or
lease of all or substantially all of the assets of the Corporation shall itself
be deemed to be a liquidation, dissolution or winding up of the Corporation
within the meaning of this paragraph 3. Notice of the liquidation, dissolution
or winding up of the Corporation shall be given, not less than 20 days prior to
the date on which such liquidation, dissolution or winding up is expected to
take place or become effective, to the holders or record of the shares of Class
A Preferred Stock.
 
     4. Redemption.
 
     (a) MANDATORY REDEMPTION. Subject to the rights of any Senior Stock and the
provisions of paragraph 5 of this Section B, the Corporation shall redeem, out
of funds legally available therefor, on the twelfth anniversary of the Issue
Date (or, if such day is not a Business Day, on the first Business Day
thereafter), all shares of Class A Preferred Stock remaining outstanding at the
Redemption Price on the Redemption Date. If the funds of the Corporation legally
available for redemption of shares of the Class A Preferred Stock or Parity
Stock then required to be redeemed are insufficient to redeem the total number
of such shares remaining outstanding, those funds which are legally available
shall, subject to the rights of any Senior Stock and the provisions of paragraph
5, be used to redeem the maximum possible number of shares of Class A Preferred
Stock and Parity Stock. Subject to the rights of any Senior Stock and the
provisions of paragraph 5 hereof, at any time and from time to time thereafter
when additional funds of the Corporation are legally available for such purpose,
such funds shall immediately be used to redeem the shares of Class A Preferred
Stock and Parity Stock which are required to be redeemed that the Corporation
failed to redeem until the balance of such shares has been redeemed. The
selection of shares to be redeemed pursuant to the two immediately preceding
sentences shall be made 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.
 
     (b) OPTIONAL REDEMPTION. Subject to the rights of any Senior Stock and the
provisions of paragraph 5 of this Section B, the shares of Class A Preferred
Stock may be redeemed, at the option of the Corporation by the action of the
Board of Directors, in whole or from time to time in part, on any Business Day
occurring after the Issue Date, at the Redemption Price on the Redemption Date.
If less than all 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 pro rata among all holders of Class A Preferred Stock.
The Corporation shall not be required to register a transfer of (i) any shares
of Class A Preferred Stock for a period of 15
 
                                       -8-
<PAGE>   10
 
days next preceding any selection of shares of Class A Preferred Stock to be
redeemed or (ii) any shares of Class A Preferred Stock selected or called for
redemption.
 
     (c) NOTICE OF REDEMPTION. Notice of redemption shall be given by or on
behalf of the Corporation, not more than 60 days nor less than 30 days prior to
the Redemption Date, to the holders of record of the shares of Class A Preferred
Stock to be redeemed; but no defect in such notice or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any shares of
Class A Preferred Stock. In addition to any information required by law or by
the applicable rules of any national securities exchange or national interdealer
quotation system on which the Class A preferred Stock may be listed or admitted
to trading or quoted, such notice shall set forth the Redemption Price, the
Redemption Date, the number of shares to be redeemed and the place at which the
shares called for redemption will, upon presentation and surrender of the stock
certificates evidencing such shares, be redeemed. In the event that fewer than
the total number of shares of Class A Preferred Stock represented by a
certificate are redeemed, a new certificate representing the number of
unredeemed shares will be issued to the holder thereof without cost to such
holder.
 
     (d) DEPOSIT OF REDEMPTION PRICE. If notice of any redemption by the
Corporation pursuant to this paragraph 4 shall have been given as provided in
paragraph 4(c) above, and if on or before the Redemption Date specified in such
notice an amount in cash sufficient to redeem in full on the Redemption Date at
the Redemption Price all shares of Class A Preferred Stock called for redemption
shall have been set apart so as to be available for such purpose and only for
such purpose, then effective as of the close of business on the Redemption Date,
the shares of Class A Preferred Stock called for redemption, notwithstanding
that any certificate therefor shall not have been surrendered for cancellation,
shall no longer be deemed outstanding, and the holders thereof shall cease to be
stockholders with respect to such shares and all rights with respect to such
shares shall forthwith cease and terminate, except the right of the holders
thereof to receive the Redemption Price of such shares, without interest, upon
the surrender of certificates representing the same.
 
     (e) STATUS OF REDEEMED SHARES. All shares of Class A Preferred Stock
redeemed, exchanged, purchased or otherwise acquired by the Corporation shall be
retired and shall not be reissued.
 
     5. Limitations on Dividends and Redemptions.
 
     If at any time the Corporation shall have failed to pay, or declare and set
aside the consideration sufficient to pay, full cumulative dividends for all
prior dividends periods on any Parity Stock which by the terms of the instrument
creating or evidencing such Parity Stock is entitled to the payment of such
cumulative dividends prior to the redemption, exchange, purchase or other
acquisition of the Class A Preferred Stock, and until full cumulative dividends
on such Parity Stock for all prior dividend periods are paid, or declared and
the consideration sufficient to pay the same in full is set aside so as to be
available for such purpose and no other purpose, neither the Corporation nor any
Subsidiary thereof shall redeem, exchange, purchase or
 
                                       -9-
<PAGE>   11
 
otherwise acquire any shares of Class A Preferred Stock, Parity Stock or Junior
Stock, or set aside any money or assets for any such purpose, pursuant to
paragraph 4 hereof, a sinking fund or otherwise, unless all then outstanding
shares of Class A Preferred Stock, of such Parity Stock and of any other class
of series of Parity Stock that by the terms of the instrument creating or
evidencing such Parity Stock is required to be redeemed under such circumstances
are redeemed or exchanged pursuant to the terms hereof and thereof.
 
     If at any time the Corporation shall have failed to pay, or declare and set
aside the consideration sufficient to pay, full cumulative dividends on the
Class A Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date, and until full cumulative dividends
on the Class A Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date are paid, or declared and the
consideration sufficient to pay the same in full is set aside so as to be
available for such purpose and no other purpose, neither the Corporation nor any
Subsidiary thereof shall redeem, exchange, purchase or otherwise acquire any
shares of Class A Preferred Stock, Parity Stock or Junior Stock, or set aside
any money or assets for any such purpose, pursuant to paragraph 4 hereof, a
sinking fund or otherwise, unless all then outstanding shares of Class A
Preferred Stock and of any other class or series of Parity Stock that by the
terms of the instrument creating or evidencing such Parity Stock is required to
be redeemed under such circumstances are redeemed or exchanged pursuant to the
terms hereof and thereof.
 
     If at any time the Corporation shall have failed to pay, or declare and set
aside the consideration sufficient to pay, full cumulative dividends on the
Class A Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date, and until full cumulative dividends
on the Class A Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date are paid, or declared and the
consideration sufficient to pay the same in full is set aside for such purpose
and no other purpose, the Corporation shall not declare or pay any dividend on
or make any distribution with respect to any Junior Stock or Parity Stock or set
aside any money or assets for any such purpose, except that the Corporation may
declare and pay a dividend on any Parity Stock ranking on a parity basis with
the Class A Preferred Stock with respect to the right to receive dividend
payments, contemporaneously with the declaration and payment of a dividend on
the Class A Preferred Stock, provided that such dividends are declared and paid
pro rata so that the amount of dividends declared and paid per share of the
Class A Preferred Stock and such Parity Stock shall in all cases bear to each
other the same ratio that accumulated and accrued and unpaid dividends per share
on the Class A Preferred Stock and such Parity Stock bear to each other.
 
     If the Corporation shall fail to redeem on any date fixed for redemption or
exchange pursuant to paragraph 4 hereof any shares of Class A Preferred Stock
called for redemption on such date, and until such shares are redeemed in full,
the Corporation shall not redeem or exchange any Parity Stock or Junior Stock or
declare or pay any dividend on or make any distribution with respect to any
Junior Stock, or set aside any money or assets for any such purpose, and neither
the Corporation nor any Subsidiary thereof shall purchase or otherwise acquire
any Class A Preferred Stock, Parity Stock or Junior Stock, or set aside any
money or assets for any such purpose.
 
                                      -10-
<PAGE>   12
 
     Neither the Corporation nor any Subsidiary thereof shall redeem, exchange,
purchase or otherwise acquire any Parity Stock or Junior Stock, or set aside any
money or assets for any such purpose, if after giving effect to such redemption,
exchange, purchase or other acquisition, the amount (as determined by the Board
of Directors in good faith) that would be available for distribution to the
holders of the Class A Preferred Stock upon liquidation, dissolution or winding
up of the Corporation if such liquidation, dissolution or winding up were to
occur on the date fixed for such redemption, exchange, purchase or other
acquisition of such Parity Stock or Junior Stock would be less than the
aggregate Liquidation Preference as of such date of all shares of Class A
Preferred Stock then outstanding.
 
     Nothing contained in the first, fourth or fifth paragraph of this paragraph
5 shall prevent (i) the payment of dividends on any Junior Stock solely in
shares of Junior Stock 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 (but only in the case of the first and fifth
paragraphs hereof) through the application of the proceeds from the sale of,
shares of Junior Stock; or (ii) the payment of dividends on any Parity Stock
solely in shares of Parity Stock and/or Junior Stock or the redemption,
exchange, purchase or other acquisition of Class A Preferred Stock or Parity
Stock solely in exchange for (together with a cash adjustment for fractional
shares, if any), or (but only in the case of the first and fifth paragraphs
hereof) through the application of the proceeds from the sale of, shares of
Parity Stock and/or Junior Stock.
 
     The provisions of the first paragraph of this paragraph 5 are for the sole
benefit of the holders of Class A Preferred Stock and Parity Stock having the
terms described therein and accordingly, at any time when there are no shares of
any such class or series of Parity Stock outstanding or if the holders of each
such 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 such provisions
(either generally or in the specific instance), then the provisions of the first
paragraph of this paragraph 5 shall not (to the extent waived, in the case of
any partial waiver) restrict the redemption, exchange, purchase or other
acquisition of any shares of Class A Preferred Stock, Parity Stock or Junior
Stock. All other provisions of this paragraph 5 are for the sole benefit of the
holders of Class A Preferred Stock and accordingly, if the holders of shares of
Class A Preferred Stock shall have waived (as provided in paragraph 7 of this
Section B) in whole or in part the benefit of the applicable provisions, either
generally or in the specific instance, such provision shall not (to the extent
of such waiver, in the case of a partial waiver) restrict the redemption,
exchange, purchase or other acquisition of, or declaration, payment or making of
any dividends or distributions on the Class A Preferred Stock, any Parity Stock
or any Junior Stock.
 
     6. Voting.
 
     (a) VOTING RIGHTS. The holders of Class A Preferred Stock shall have no
voting rights whatsoever, except as required by law and except for the voting
rights described in this paragraph 6; provided, however, that the number of
authorized shares of Class A Preferred Stock may be increased or decreased (but
not below the number of shares of Class A preferred Stock then outstanding) by
the affirmative vote of the holders of at least 66 2/3 of the total voting
 
                                      -11-
<PAGE>   13
 
power of the then outstanding Voting Securities (as defined in Section C of
Article V of this Certificate), voting together as a single class as provided in
Article IX of this Certificate. Without limiting the generality of the
foregoing, no vote or consent of the holders of Class A Preferred Stock shall be
required for (a) the creation of any indebtedness of any kind of the
Corporation, (b) the creation or designation of any class or series of Senior
Stock, Parity Stock or Junior Stock, or (c) any amendment to this Certificate
that would increase the number of authorized shares of Preferred Stock or the
number of authorized shares of Class A Preferred Stock or that would decrease
the number of authorized shares of Class A Preferred Stock or the number of
authorized shares of Class A Preferred Stock (but not below the number of shares
of Preferred Stock or Class A Preferred Stock, as the case may be, then
outstanding).
 
     (b) ELECTION OF DIRECTORS. The holders of the Class A Preferred Stock shall
have the right to vote at any annual or special meeting of stockholders for the
purpose of electing directors. Each share of Class A Preferred Stock shall have
one vote for such purpose, and shall vote as a single class with any other class
or series of capital stock of the Corporation entitled to vote in any general
election of directors, unless the instrument creating or evidencing such class
or series of capital stock otherwise expressly provides.
 
     7. Waiver.
 
     Any provision of this Section B which, for the benefit of the holders of
Class A Preferred Stock, prohibits, limits or restricts actions by the
Corporation, or imposes obligations on 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 a majority of the number of shares of Class A
Preferred Stock then outstanding (or such greater percentage thereof as may be
required by applicable law or any applicable rules of any national securities
exchange or national interdealer quotation system), either in writing or writing
or by vote at an annual meeting or a meeting called for such purpose at which
the holders of Class A Preferred Stock shall vote as a separate class.
 
     8. Method of Giving Notices.
 
     Any notice required or permitted by the provisions of this Section B to be
given to the holders of share of Class A Preferred Stock shall be deemed duly
given if deposited in the United States mail, first class mail, postage prepaid,
and addressed to each holder of record at his address appearing on the books of
the Corporation or supplied by him in writing to the Corporation for the purpose
of such notice.
 
     9. Exclusion of Other Rights.
 
     Except as may otherwise be required by law and except for the equitable
rights and remedies which may otherwise be available to holders of Class A
Preferred Stock, 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 Certificate.
 
                                      -12-
<PAGE>   14
 
     10. Heading of Subdivisions.
 
     The headings of the various subdivisions of this Section are for
convenience of reference only and shall not affect the interpretation of any of
the provisions of this Section.
 
                                   SECTION C
 
                 CLASS B 6% CUMULATIVE REDEEMABLE EXCHANGEABLE
                             JUNIOR PREFERRED STOCK
 
     The Class B 6% Cumulative Redeemable Exchangeable Junior 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 Section C, the
meanings herein specified:
 
     "Average Market Price" as of any Record Date or Special Record Date for a
dividend payment declared by the Board of Directors means the average of the
daily Current Market Prices of the Class A Common Stock for a period of 20
consecutive trading days ending on the tenth trading day prior to such Record
Date or Special Record Date, appropriately adjusted to take into account any
stock dividends on the Class A Common Stock, or any stock splits,
reclassifications or combinations of the Class A Common Stock, during the period
following the first of such 20 trading days and ending on the last full trading
day immediately preceding the Dividend Payment Date or other date fixed for the
payment of dividends to which such Record Date or Special Record Date, as the
case may be, relates.
 
     "Class A Common Stock" shall mean the Class A Common Stock, par value $1.00
per share, of the Corporation, which term shall include, where appropriate, in
the case of any reclassification, recapitalization or other change in the Class
A Common Stock, or in the case of a consolidation or merger of the Corporation
with or into another Person affecting the Class A Common Stock, such capital
stock to which a holder of Class A Common Stock shall be entitled upon the
occurrence of such event.
 
     "Class A Preferred Stock" shall mean the Class A Preferred Stock, par value
$.01 per share, of the Corporation.
 
     "Class B Common Stock" shall mean the Class B Common Stock, par value $1.00
per share, of the Corporation, which term shall include, where appropriate, in
the case of any reclassification, recapitalization or other change in the Class
B Common Stock, or in the case of a consolidation or merger of the Corporation
with or into another Person affecting the Class B Common Stock, such capital
stock to which a holder of Class B Common Stock shall be entitled upon the
occurrence of such event.
 
                                      -13-
<PAGE>   15
 
     "Class B Preferred Stock" shall mean the Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock, par value $.01 per share, of the
Corporation.
 
     "Current Market Price" of a share of Class A Common Stock on any day means
the last reported per share sale price (or, if no sale price is reported, the
average of the high and low bid prices) of the Class A Common Stock on such day
on the Nasdaq National Market or as quoted by the National Quotation Bureau
Incorporated, or if the Class A Common Stock is listed on an exchange, on the
principal exchange on which the Class A Common Stock is listed. In the event
that no such quotation is available for any day, the Board of Directors shall be
entitled to determine the Current Market Price on the basis of such quotations
as it considers appropriate.
 
     "Dividend Payment Date" shall mean, for any Dividend Period, the last day
of such Dividend Period which shall be the first day of March of each year,
commencing with March 1, 995, or the next succeeding Business Day if any such
day is not a Business Day.
 
     "Dividend Period" shall mean the period from the Initial Accrual Date to
and including the first Dividend Payment Date and each annual period between
consecutive Dividend Payment Dates.
 
     "Initial Accrual Date", when used with respect to the shares of Class B
Preferred Stock, shall mean March 2, 1994.
 
     "Issue Date" shall mean the date on which shares of Class B Preferred Stock
are first issued.
 
     "Junior Exchange Notes" shall mean junior subordinated debt securities of
the Corporation of a series to be issued under the Junior Exchange Note
Indenture in exchange for shares of Class B Preferred Stock as contemplated by
paragraphs 4(d) and (f) of this Section C.
 
     "Junior Exchange Note Indenture" shall mean an indenture substantially in
the form annexed as Exhibit 4.5 to the S-4 Registration Statement, as
supplemented by a supplemental indenture substantially in the form annexed as
Exhibit 1 to such form of indenture, as said indenture and supplemental
indenture may be amended or further supplemented from time to time (subject to
any applicable restrictions of this Certificate) and, unless the context
indicates otherwise, shall include the form and terms of the Junior Exchange
Notes established as contemplated thereunder.
 
     "Junior Stock" shall mean (i) the Class A Common Stock, (ii) the Class B
Common Stock, (iii) any other class or series of capital stock, whether now
existing or hereafter created, of the Corporation, other than (A) the Class B
Preferred Stock, (B) the Class A Preferred Stock, (C) any class or series of
Parity Stock (except to the extent provided under clause (iv) hereof) and (D)
any Senior Stock, and (iv) any class or series of Parity Stock to the extent
that it ranks junior to the Class B Preferred Stock as to dividend rights,
rights of redemption or rights on liquidation, as the case may be. For purposes
of clause (iv) above, a class or series of Parity
 
                                      -14-
<PAGE>   16
 
Stock shall rank junior to the Class B Preferred Stock as to dividend rights,
rights of redemption or rights on liquidation if the holders of shares of Class
B 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.
 
     "Liquidation Preference" measured per share of the Class B Preferred Stock
as of any date in question (the "Determination Date") shall mean an amount equal
to the sum of (a) the Stated Liquidation Value of such share, plus (b) an amount
equal to all dividends accrued on such share which pursuant to paragraph 2(b) of
this Section C have been added to and remain a part of the Liquidation
Preference as of the Determination Date, plus (c) for purposes of determining
the amounts payable pursuant to paragraph 3 and paragraph 4 of this Section C
and the definition of Redemption Price, an amount equal to all unpaid dividends
accrued on such share during the period from the immediately preceding Dividend
Payment Date (or the Initial Accrual Date if the Determination Date is on or
prior to the first Dividend Payment Date) through and including the
Determination Date, and, in the case of clauses (b) and (c) hereof, whether or
not such unpaid dividends have been earned or declared or there are any
unrestricted funds of the Corporation legally available for the payment of
dividends. In connection with the determination of the Liquidation Preference of
a share of Class B Preferred Stock upon redemption or upon liquidation,
dissolution or winding up of the Corporation, the Determination Date shall be
the applicable date of redemption or the date of distribution of amounts payable
to stockholders in connection with any such liquidation, dissolution or winding
up.
 
     "1933 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.
 
     "Optional Exchange Date" shall mean the date fixed for the exchange of
shares of Class Be Preferred Stock pursuant to paragraph 4(d) of this Section C,
provided that such date will not be the Optional Exchange Date unless on or
before such date all conditions to the issuance and delivery of Junior Exchange
Notes upon such exchange contained in paragraph 4(f) of this Section C have been
satisfied.
 
     "Parity Stock" shall mean any class or series of capital stock, whether now
existing or hereafter created, of the Corporation ranking on a parity basis with
the Class B Preferred Stock as to dividend rights, rights of redemption or
rights on liquidation. Capital stock of any class or series shall rank on a
parity as to dividend rights, rights of redemption or rights on liquidation with
the Class B 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 different from those of the Class B 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 B Preferred Stock. No class or
series of capital stock that ranks junior to the Class B Preferred
 
                                      -15-
<PAGE>   17
 
Stock as to rights on liquidation shall rank or be deemed to rank on a parity
basis with the Class B Preferred Stock as to dividend rights of redemption,
unless the instrument creating or evidencing such class or series of capital
stock otherwise expressly provides.
 
     "Record Date" for the dividends payable on any Dividend Payment Date means
the fifteen day of the month preceding the month during which such Dividend
Payment Date shall occur, or if any such day is not a Business Day, then on the
next preceding Business Day, as and if designated by the Board of Directors.
 
     "Redemption Agent" has the meaning ascribed to such term in paragraph 4(c)
of this Section C.
 
     "Redemption Date" as to any share of Class B Preferred Stock shall mean the
date fixed for redemption of such share pursuant to paragraph 4(a) of this
Section C, provided that no such date will be a Redemption Date unless the
applicable Redemption Price is actually paid in full on such date or the
consideration sufficient for the payment thereof, and for no purpose, has been
set apart or deposited in trust as contemplated by paragraph 4(c) of this
Section C.
 
     "Redemption Price" as to any share of Class B Preferred Stock which is to
be redeemed on any Redemption Date shall mean the Liquidation Preference thereof
on such Redemption Date.
 
     "S-4 Registration Statement" shall mean the Corporation's Registration
Statement on Form S-4 (Reg. No. 33-54263) filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 and declared effective on June
28, 1994.
 
     "Senior Stock" shall mean (i) the Class A Preferred Stock and (ii) any
other class or series of capital stock, whether now existing or hereafter
created, of the Corporation ranking prior to the Class B 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 B 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 B Preferred Stock. No class or series of
capital stock that ranks on a parity basis with or junior to the Class B
Preferred Stock as to rights on liquidation shall rank or be deemed to rank
prior to the Class B 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 B Preferred Stock, unless the instrument
creating or evidencing such class or series of capital stock otherwise expressly
provides.
 
     "Special Record Date" has the meaning ascribed to such term in paragraph
2(b) of this Section C.
 
     "Stated Liquidation Value" of a share of Class B Preferred Stock means
$100.
 
                                      -16-
<PAGE>   18
 
     "Subsidiary" of any Person 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 such Person
and/or one or more Subsidiaries of such Person and (ii) any other Person (other
than a corporation) in which such Person and/or one or more Subsidiaries of such
Person, directly or indirectly, has (x) a majority ownership interest or (y) the
power to elect or direct the election of a majority of the members of the
governing body of such first-named Person.
 
     "TIA" shall mean the Trust Indenture Act of 1939 (or any successor statute)
as in effect on the date the Junior Exchange Note Indenture is or is required to
be qualified thereunder in accordance with paragraph 4 of this Section C.
 
     2. Dividends.
 
     (a) DIVIDEND RIGHTS; DIVIDEND PAYMENT DATES. Subject to the prior
preferences and other rights of any Senior Stock and the provisions of paragraph
5 hereof, the holders of Class B Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors, out of unrestricted funds
legally available therefor, cumulative dividends, in preference to dividends on
any Junior Stock, that shall accrue on each share of Class B Preferred Stock at
the rate of 6.0% per annum of the Stated Liquidation Value of such share from
the Initial Accrual Date to and including the date on which the Liquidation
Preference of such share is made available (whether on liquidation, dissolution,
or winding up of the Corporation or, in the case of paragraph 4 of this Section
C, upon the applicable Redemption Date or Optional Exchange Date. Accrued
dividends on the Class B Preferred Stock will be payable, as provided in
paragraph 2(c) below, annually on each Dividend Payment Date to the holders of
record of the Class B Preferred Stock as of the close of business on the Record
Date for such dividend payment. Dividends shall be fully cumulative and shall
accrue (without interest or compounding) on a daily basis without regard to the
occurrence of a Dividend Payment Date and whether or not such dividends are
declared and whether or not there are any unrestricted funds of the Corporation
legally available for the payment of dividends. The amount of dividends
"accrued" as of the first Dividend Payment Date and as of any date that is not a
Dividend Payment Date shall be calculated on the basis of the foregoing rate per
annum for the actual number of days elapsed from the Initial Accrual 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 and including the date as of which such determination is
to be made, based on a 365- or 366-day year, as the case may be.
 
     (b) SPECIAL RECORD DATE. On each Dividend Payment Date, all dividends that
have accrued on each share of Class B Preferred Stock during the immediately
preceding Dividend Period shall, to the extent not paid as provided in paragraph
2(c) below on such Dividend Payment Date for any reason (whether or not such
unpaid dividends have been earned or declared or there are any unrestricted
funds of the Corporation legally available for the payment of dividends), be
added to the Liquidation Preference of such share and will remain a part thereof
until such dividends are paid as provided in paragraph 2(c) below. No interest
or additional dividends will accrue or be payable (whether in cash, shares of
Class A Common Stock
 
                                      -17-
<PAGE>   19
 
or otherwise) with respect to any dividend payment on the Class B Preferred
Stock that may be in arrears or with respect to that portion of any other
payment on the Class B Preferred Stock that is in arrears which consists of
accumulated or accrued and unpaid dividends. Such accumulated or accrued and
unpaid dividends may be declared and paid at any time (subject to the rights of
any Senior Stock and, if applicable, to the concurrent satisfaction of any
dividend arrearages then existing with respect to any Parity Stock which ranks
on a parity basis with the Class B Preferred Stock as to the payment of
dividends) without reference to any regular Dividend Payment Date, to holders of
record as of the close of business on such date, not more than 45 days nor less
than 10 days preceding the payment date thereof, as may be fixed by the Board of
Directors (the "Special Record Date"). Notice of each Special Record Date shall
be given, not more than 45 days nor less than 10 days prior thereto, to the
holders of record of the shares of Class B Preferred Stock.
 
     (c) METHOD OF PAYMENT. All dividends payable with respect to the shares of
Class B Preferred Stock may be declared and paid, in the sole discretion of the
Board of Directors, in cash, through the issuance of shares of Class A Common
Stock or in any combination of the foregoing, provided, however, that if on any
Dividend Payment Date or other date fixed for the payment of dividends declared
by the Board of Directors, the Corporation pursuant to applicable law or
otherwise is prohibited or restricted from paying in cash the full amount of
dividends declared payable to the holders of Class B Preferred Stock on such
date, then the portion of such dividends the payment of which in cash is so
prohibited or restricted (or such greater portion of such dividends as the Board
of Directors may determine) shall be paid through the issuance of shares of
Class A Common Stock. If any dividend payment declared by the Board of Directors
with respect to the shares of Class B Preferred Stock is to be paid in whole or
in part through the issuance of shares of Class A Common Stock, the amount of
such dividend payment to be paid per share of Class B Preferred Stock in shares
of Class A Common Stock (the "Stock Dividend Amount") shall be satisfied and
paid by the delivery to the holders of record of such shares of Class B
Preferred Stock on the Record Date or Special Record Date, as the case may be,
for such dividend payment, of a number of shares of Class A Common Stock
determined by dividing the Stock Dividend Amount by the Average Market Price of
a share of Class A Common Stock as of such Record Date or Special Record Date.
The Corporation shall not be required to issue any fractional share of Class A
Common Stock to which any holder of Class B Preferred Stock may become entitled
pursuant to this paragraph 2(c). The Board of Directors may elect to settle any
final fraction of a share of Class A Common Stock which a holder of one or more
shares of Class B Preferred Stock would otherwise be entitled to receive
pursuant to this paragraph 2(c) by having the Corporation pay to such holder, in
lieu of issuing such fractional share, cash in an amount (rounded upward to the
nearest whole cent) equal to the same fraction of the Average Market Price of a
share of Class A Common Stock as of the Record Date or Special Record Date, as
the case may be, for the dividend payment with respect to which such shares of
Class A Common Stock are being delivered. Such election, if made, shall be made
as to all holders of Class B Preferred Stock who would otherwise be entitled to
receive a fractional share of Class A Common Stock on the Dividend Payment Date
or other date fixed for the payment of such dividend.
 
                                      -18-
<PAGE>   20
 
     All dividends paid with respect to the shares of Class B Preferred Stock
pursuant to this paragraph 2 shall be paid pro rata to all the holders of shares
of Class B Preferred Stock outstanding on the applicable Record Date or Special
Record Date, as the case may be.
 
     3. Distributions Upon Liquidation, Dissolution or Winding Up.
 
     Subject to the prior payment in full of the preferential amounts to which
any Senior Stock is entitled, in the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
Class B Preferred Stock shall be entitled to receive from the assets of the
Corporation available for distribution to stockholders, before any payment or
distribution shall be made to the holders of any Junior Stock, an amount in cash
or property at its fair market value, as determined by the Board of Directors in
good faith, or a combination thereof, per share, equal to the Liquidation
Preference of a share of Class B Preferred Stock of the date of payment or
distribution, which payment or distribution shall be made pari passu with any
such payment or distribution made to the holders of any Parity Stock ranking on
a parity basis with the Class B Preferred Stock with respect to distributions
upon liquidation, dissolution or winding up of the Corporation. The holders of
Class B Preferred Stock shall be entitled to no other or further distribution of
or participation in any remaining assets of the Corporation's assets in
liquidation, dissolution or winding up, the assets of the Corporation to be
distributed among the holders of the Class B Preferred Stock and to all holders
of any Parity Stock ranking on a parity basis with the Class B Preferred Stock
with respect to distributions upon liquidation, dissolution or winding up shall
be insufficient to permit payment in full to such holders of the respective
preferential amounts to which they are entitled, then the entire assets of the
Corporation to be distributed to holders of the Class B Preferred Stock and such
Parity Stock shall be distributed pro rata to such holders based upon the
aggregate of the full preferential amounts to which the shares of Class B
Preferred Stock and such Parity Stock would otherwise respectively be entitled.
Neither the consolidation or merger of the Corporation with or into any other
corporation or corporations nor the sale, transfer or lease of all or
substantially all of the assets of the Corporation shall itself be deemed to be
a liquidation, dissolution or winding up of the Corporation within the meaning
of this paragraph 3. Notice of the liquidation, dissolution or winding up of the
Corporation shall be given, not less than 20 days prior to the date on which
such liquidation, dissolution or winding up is expected to take place or become
effective, to the holders of record of the shares of Class B Preferred Stock.
 
     4. Redemption or Exchange.
 
     (a) OPTIONAL REDEMPTION. Subject to the rights of any Senior Stock and the
provisions of paragraph 5 of this Section C, the shares of Class B Preferred
Stock may be redeemed, at the option of the Corporation by the action of the
Board of Directors, in whole or from time to time in part, on any Business Day
occurring after the Issue Date, at the Redemption Price on the Redemption Date.
If less than all outstanding shares of Class B Preferred Stock are to be
redeemed on any Redemption Date, the shares of Class B Preferred Stock to be
redeemed shall be chosen by lot or by such other method as the Board of
Directors
 
                                      -19-
<PAGE>   21
 
considers fair and appropriate (and which complies with the requirements, if
any, of any national securities exchange or national interdealer quotation
system on which the Class B Preferred Stock may be listed or admitted to trading
or quoted). The Corporation shall not be required to register a transfer of (i)
any shares of Class B Preferred Stock for a period of 15 days next preceding any
selection of shares of Class B Preferred Stock to be redeemed or (ii) any shares
of Class B Preferred Stock selected or called for redemption.
 
     (b) NOTICE OF REDEMPTION. Notice of redemption shall be given by or on
behalf of the Corporation, not more than 60 days nor less than 30 days prior to
the Redemption Date, to the holders of record of the shares of Class B Preferred
Stock to be redeemed; but no defect in such notice or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any shares of
Class B Preferred Stock. In addition to any information required by law or by
the applicable rules of any national securities exchange or national interdealer
quotation system on which the Class B Preferred Stock may be listed or admitted
to trading or quoted, such notice shall set forth the Redemption Price, the
Redemption Date, the number of shares to be redeemed and the place at which the
shares called for redemption will, upon presentation and surrender of the stock
certificates evidencing such shares, be redeemed, and if the Corporation has
elected to deposit the Redemption Price with a Redemption Agent in accordance
with paragraph 4(c) below, shall state the name and address of the Redemption
Agent and the date on which such deposit was or will be made. In the event that
fewer than the total number of shares of Class B Preferred Stock represented by
a certificate are redeemed, a new certificate representing the number of
unredeemed shares will be issued to the holder thereof without cost to such
holder.
 
     (c) DEPOSIT OF REDEMPTION PRICE. If notice of any redemption by the
Corporation pursuant to this paragraph 4 shall have been given as provided in
paragraph 4(b) above, and if on or before the Redemption Date specified in such
notice an amount in cash sufficient to redeem in full on the Redemption Date at
the Redemption Price all shares of Class B Preferred Stock called for redemption
shall have been set apart so as to be available for such purpose and only for
such purpose, then effective as of the close of business on the Redemption Date,
the shares of Class B Preferred Stock called for redemption, notwithstanding
that any certificate therefor shall not have been surrendered for cancellation,
shall no longer be deemed outstanding, and the holders thereof shall cease to be
stockholders with respect to such shares and all rights with respect to such
shares shall forthwith cease and terminate, except the right of the holders
thereof to receive the Redemption Price of such shares, without interest, upon
the surrender of certificates representing the same.
 
     At its election, the Corporation on or prior to the Redemption Date (but no
more than 60 days prior to the Redemption Date) may deposit immediately
available funds in an amount equal to the aggregate Redemption Price of the
shares of Class B Preferred Stock called for redemption 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 notice of redemption as soon as
practicable after receipt of such
 
                                      -20-
<PAGE>   22
 
irrevocable instructions (or to complete such mailing previously commenced, if
it has not already been completed) and to pay, on and after the Redemption Date
or prior thereto, the Redemption Price of the shares of Class B 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 B Preferred Stock to be redeemed and from and after the close of business
on the date of such deposit (although prior to the Redemption Date), the shares
of Class B 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 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. Any interest accrued on the funds so deposited shall be
paid to the Corporation from time to time. Any funds so deposited with the
Redemption Agent which shall remain unclaimed by the holders of such shares of
Class B Preferred Stock at the end of one year after the Redemption Date shall
be returned by the Redemption Agent to the Corporation, after which repayment
the holders of such shares of Class B Preferred Stock called for redemption
shall look only to the Corporation for the payment thereof, without interest,
unless an applicable escheat or abandoned property law designates another
Person.
 
     (d) OPTIONAL EXCHANGE FOR JUNIOR EXCHANGE NOTES. Subject to the rights of
any Senior Stock and the provisions of paragraph 5 of this Section C, the shares
of Class B Preferred Stock may be exchanged, out of funds legally available
therefor, at the option of the Corporation by action of the Board of Directors,
in whole but not in part, on any Business Day occurring after the Issue Date,
for Junior Exchange Notes. Each holder of outstanding shares of Class B
Preferred Stock shall be entitled to receive, in exchange for his shares of
Class B Preferred Stock pursuant to this paragraph 4(d), newly issued Junior
Exchange Notes of a series authorized and established for the purpose of such
exchange, the aggregate principal amount of which shall be equal to the
aggregate Liquidation Preference on the Optional Exchange Date of the shares of
Class B Preferred Stock so exchanged by such holder, provided that the Junior
Exchange Notes will be issuable only in principal amounts of $100 or any
integral multiple thereof and an adjustment will be paid by the Corporation, in
cash or by its check, in an amount equal to any excess principal amount
otherwise issuable.
 
     (e) NOTICE OF EXCHANGE. Notice of the Corporation's election to exercise
its optional exchange right pursuant to paragraph 4(d) (an "Optional Exchange
Notice") shall be given by or on behalf of the Corporation, not more than 60
days nor less than 30 days prior to the Optional Exchange Date, to the holders
of record of the shares of Class B Preferred Stock; but no defect in such notice
or in the mailing thereof shall affect the validity of the proceedings for the
exchange of any shares of Class B Preferred Stock. In addition to any
information required by law or by the applicable rules of any national
securities exchange or national interdealer quotation system on which the shares
of Class B Preferred Stock may be listed or admitted to trading or quoted, such
notice shall set forth the Optional Exchange Date, the place at which shares of
Class B Preferred Stock will, upon presentation and surrender of the stock
certificates evidencing such shares, be exchanged for Junior Exchange Notes, and
the material terms (or, as to the rate per annum at which the Junior Exchange
Notes will bear
 
                                      -21-
<PAGE>   23
 
interest, and, if applicable, as to any other of such terms, the method of
determining the same), consistent with the provisions hereof and of the Junior
Exchange Note Indenture, of the series of Junior Exchange Notes to be issued
upon such exchange.
 
     Upon determination of the rate per annum at which the Junior Exchange Notes
to be issued upon such exchange will bear interest and any other terms of such
Junior Exchange Notes, the method of determining which was set forth in the
Optional Exchange Notice, the Corporation shall promptly give notice of such
determination to the holders of shares of Class B Preferred Stock, which notice
may be given by (or, if required by applicable law, shall be given by)
publication of such determination in a daily newspaper of national circulation.
 
     (f) CONDITIONS TO EXCHANGE FOR JUNIOR EXCHANGE NOTE. Prior to the giving of
an Optional Exchange Notice, the Corporation shall execute and deliver, with a
bank or trust company selected by the Corporation, the Junior Exchange Note
Indenture, substantially in the form annexed to the S-4 Registration Statement
with only such changes as (i) are necessary to comply with law, any applicable
rules of any securities exchange or usage, (ii) are requested by the Corporation
and which would make any provisions of the Junior Exchange Note Indenture, or of
the Junior Exchange Notes of the series established thereunder for the purpose
of such exchange, more restrictive to the Corporation or beneficial to the
holders of the Junior Exchange Notes of such series, as determined by the Board
of Directors in good faith, such determination to be conclusive, (iii) are
requested by the Corporation to add to the covenants and agreements of the
Corporation contained in the Junior Exchange Note Indenture or to remove any
right or power therein reserved to or conferred upon the Corporation, (iv) are
requested by the Corporation in the event of any amendment to this Certificate
that effects a change in the terms of the Class B Preferred Stock, to conform
(as nearly as may be taking into account the differences between debt securities
and equity securities) the provisions of the Junior Exchange Note Indenture
(including, without limitation, the provisions relating to the establishment of
the terms of any series of Junior Exchange Notes authorized to be issued
thereunder) to the terms of the Class B Preferred Stock as so changed, (v) are
consented to by the holders of at least a majority of the number of shares of
Class B Preferred Stock then outstanding (or such greater percentage thereof as
may be required by applicable law or any applicable rules of any national
securities exchange or national interdealer quotation system), either in writing
or by vote at a meeting called for that purpose at which the holders of Class B
Preferred Stock shall vote as a separate class, or (vi) would not adversely
affect the rights of the holders of Junior Exchange Notes of such series
issuable thereunder.
 
     Prior to the Optional Exchange Date, the Corporation shall (i) establish in
the manner contemplated by the Junior Exchange Note Indenture the terms of the
series of Junior Exchange Notes to be issued thereunder on the Optional Exchange
Date, and (ii) file at the office of the exchange agent for the Class B
Preferred Stock (or with the books of the Corporation if there is no exchange
agent) an opinion of counsel to the effect that (A) the Junior Exchange Note
Indenture has been duly authorized, executed and delivered by the Corporation,
and constitutes a valid and binding instrument enforceable against the
Corporation in accordance with its terms (subject, as to enforceability, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general principles of equity
and
 
                                      -22-
<PAGE>   24
 
except that the Corporation may be prohibited from making payments on the Junior
Exchange Notes of the series to be issued if and to the extent it would at the
time be prohibited from redeeming capital stock and subject to other
qualifications as are then customarily contained in opinions of counsel
experienced in such matters); (B) that the Junior Exchange Notes of such series
have been duly authorized and, when executed and authenticated in accordance
with the provisions of the Junior Exchange Note Indenture and delivered in
exchange for the shares of Class B Preferred Stock, will constitute valid and
binding obligations of the Corporation entitled to the benefits of the Junior
Exchange Note Indenture (subject as aforesaid); (C) that the issuance and
delivery of the Junior Exchange Notes of such series in exchange for the shares
of Class B Preferred Stock will not violate the laws of the state of
incorporation of the Corporation; and (D) that (x) the Junior Exchange Note
Indenture has been duly qualified under the TIA (or that such qualification is
not necessary) and (y) that the issuance and delivery of the Junior Exchange
Notes of such series in exchange for the shares of Class B Preferred Stock is
exempt from the registration or qualification requirements of the 1933 Act and
applicable state securities laws or, if no such exemption is available, that the
Junior Exchange Notes of such series have been duly registered or qualified for
such exchange under the 1933 Act and such applicable state securities laws.
 
     (g) METHOD OF EXCHANGE. If an Optional Exchange Notice shall have been
given by the Corporation pursuant to paragraph 4(e) of this Section C, and if
the Corporation shall have satisfied the conditions to such exchange contained
in paragraph 4(f), then effective as of the close of business on the Optional
Exchange Date, the shares of Class B Preferred Stock, notwithstanding that any
certificate therefor shall not have been surrendered for cancellation, shall no
longer be deemed outstanding, and the holders thereof shall cease to be
stockholders with respect to such shares and all rights with respect to such
shares shall forthwith cease and terminate, except the right of the holders
thereof upon the surrender of certificates evidencing the same to receive the
Junior Exchange Notes exchangeable therefor, and the cash adjustment, if any, in
lieu of Junior Exchange Notes in other than authorized denominations, without
interest.
 
     Before any holder of shares of Class B Preferred Stock called for exchange
shall be entitled to receive the Junior Exchange Notes deliverable in exchange
therefor, such holder shall surrender the certificate or certificates
representing the shares to be exchanged at such place as the Corporation shall
have specified in the Optional Exchange Notice, which certificate or
certificates shall be duly endorsed to the Corporation or in blank (or
accompanied by duly executed instruments to 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 a written notice
to the Corporation, specifying the name or names (with addresses) in which the
Junior Exchange Notes are to be issued. If any transfer is involved in the
issuance or delivery of any Junior Exchange Notes in a name other than that of
the registered holder of the shares of Class B Preferred Stock surrendered for
exchange, such holder shall also deliver to the Corporation a sum sufficient for
all taxes 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.
 
                                      -23-
<PAGE>   25
 
     As soon as practicable after the later of the Optional Exchange Date and
the proper surrender of the certificate(s) for such shares of Class B Preferred
Stock as provided above, the Corporation shall deliver at the place specified in
the Optional Exchange Notice, to the holder of the shares of Class B Preferred
Stock so surrendered, or to his nominee(s) or, subject to compliance with
applicable law, transferee(s), a Junior Exchange Note or Notes (of authorized
denominations) in the principal amount to which he shall be entitled upon such
exchange, together with a check in the amount of any cash adjustment as provided
in paragraph 4(d). The Person in whose name any Junior Exchange Note is issued
upon an exchange pursuant to paragraph 4(d) shall be treated for all purposes as
the holder of record thereof as of the close of business on the Optional
Exchange Date.
 
     (h) STATUS OF REDEEMED SHARES. All shares of Class B Preferred Stock
redeemed, exchanged, purchased or otherwise acquired by the Corporation shall be
retired and shall not be reissued.
 
     5. Limitations on Dividends and Redemptions.
 
     If at any time the Corporation shall have failed to pay, or declare and set
aside the consideration sufficient to pay, full cumulative dividends for all
prior dividend periods on any Parity Stock which by the terms of the instrument
creating or evidencing such Parity Stock is entitled to the payment of such
cumulative dividends prior to the redemption, exchange, purchase or other
acquisition of the Class B Preferred Stock, and until full cumulative dividends
on such Parity Stock for all prior dividend periods are paid, or declared and
the consideration sufficient to pay the same in full is set aside so as to be
available for such purpose and no other purpose, neither the Corporation nor any
Subsidiary thereof shall redeem, exchange, purchase or otherwise acquire any
shares of Class B Preferred Stock, Parity Stock or Junior Stock, or set aside
any money or assets for any such purpose, pursuant to paragraph 4 hereof, a
sinking fund or otherwise, unless all then outstanding shares of Class B
Preferred Stock, of such Parity Stock and of any other class of series of Parity
Stock that by the terms of the instrument creating or evidencing such Parity
Stock is required to be redeemed under such circumstances are redeemed or
exchanged pursuant to the terms hereof and thereof.
 
     If at any time the Corporation shall have failed to pay, or declare and set
aside the consideration sufficient to pay, full cumulative dividends on the
Class B Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date, and until full cumulative dividends
on the Class B Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date are paid, or declared and the
consideration sufficient to pay the same in full is set aside so as to be
available for such purpose and no other purpose, neither the Corporation nor any
Subsidiary thereof shall redeem, exchange, purchase or otherwise acquire any
shares of Class B Preferred Stock, Parity Stock or Junior Stock, or set aside
any money or assets for any such purpose, pursuant to paragraph 4 hereof, a
sinking fund or otherwise, unless all then outstanding shares of Class B
Preferred Stock and of any other class or series of Parity Stock that by the
terms of the instrument creating or evidencing such Parity Stock is required to
be redeemed under such circumstances are redeemed or exchanged pursuant to the
terms hereof and thereof.
 
                                      -24-
<PAGE>   26
 
     If at any time the Corporation shall have failed to pay, or declare and set
aside the consideration sufficient to pay, full cumulative dividends on the
Class B Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date, and until the full cumulative
dividends on the Class B Preferred Stock for all Dividend Periods ending on or
before the immediately preceding Dividend Payment Date are paid, or declared and
the consideration sufficient to pay the same in full is set aside for such
purpose and no other purpose, the Corporation shall not declare or pay any
dividend on or make any distribution with respect to any Junior Stock or Parity
Stock or set aside any money or assets for any such purpose, except that the
Corporation may declare and pay a dividend on any Parity Stock ranking on a
parity basis with the Class B Preferred Stock with respect to the right to
receive dividend payments, contemporaneously with the declaration and payment of
a dividend on the Class B Preferred Stock, provided that such dividends are
declared and paid pro rata so that the amount of dividends declared and paid per
share of the Class B Preferred Stock and such Parity Stock shall in all cases
bear to each other the same ratio that accumulated and accrued and unpaid
dividends per share on the Class B Preferred Stock and such Parity Stock bear to
each other.
 
     If the Corporation shall fail to redeem or exchange on any date fixed for
redemption or exchange pursuant to paragraph 4(a) or 4(d) hereof any shares of
Class B Preferred Stock called for redemption or exchange on such date, and
until such shares are redeemed or exchanged in full, the Corporation shall not
redeem or exchange any Parity Stock or Junior Stock or declare or pay any
dividend on or make any distribution with respect to any Junior Stock, or set
aside any money or assets for any such purpose, and neither the Corporation nor
any Subsidiary thereof shall purchase or otherwise acquire any Class B Preferred
Stock, Parity Stock or Junior Stock, or set aside any money or assets for any
such purpose.
 
     Neither the Corporation nor any Subsidiary thereof shall redeem, exchange,
purchase or otherwise acquire any Parity Stock or Junior Stock, or set aside any
money or assets for any such purpose, if after giving effect to such redemption,
exchange, purchase or other acquisition, the amount (as determined by the Board
or Directors in good faith) that would be available for distribution to the
holders of the Class B Preferred Stock upon liquidation, dissolution or winding
up of the Corporation if such liquidation, dissolution or winding up were to
occur on the date fixed for such redemption, exchange, purchase or other
acquisition of such Parity Stock or Junior Stock would be less than the
aggregate Liquidation Preference as of such date of all shares of Class B
Preferred Stock then outstanding.
 
     Nothing contained in the first, fourth or fifth paragraph of this paragraph
5 shall prevent (i) the payment of dividends on any Junior Stock solely in
shares of Junior Stock 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 (but only in the case of the first and fifth
paragraphs hereof) through the application of the proceeds from the sale of,
shares of Junior Stock; or (ii) the payment of dividends on any Parity Stock
solely in shares of Parity Stock and/or Junior Stock or the redemption,
exchange, purchase or other acquisition of Class B Preferred Stock or Parity
Stock solely in exchange for (together with a cash adjustment for fractional
shares, if any), or (but only in the case of the first and fifth paragraphs
hereof) through the application of the proceeds from the sale of, shares of
Parity Stock and/or Junior Stock.
 
                                      -25-
<PAGE>   27
 
     The provisions of the first paragraph of this paragraph 5 are for the sole
benefit of the holders of Class B Preferred Stock and Parity Stock having the
terms described therein and accordingly, at any time when there are no shares of
any such class or series of Parity Stock outstanding or if the holders of each
such 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 such provisions
(either generally or in the specific instance), then the provisions of the first
paragraph of this paragraph 5 shall not (to the extent waived, in the case of
any partial waiver) restrict the redemption, exchange, purchase or other
acquisition of any shares of Class B Preferred Stock, Parity Stock or Junior
Stock. All other provisions of this paragraph 5 are for the sole benefit of the
holders of Class B Preferred Stock and accordingly, if the holders of shares of
Class B Preferred Stock shall have waived (as provided in paragraph 7 of this
Section C) in whole or in part the benefit of the applicable provisions, either
generally or in the specific instance, such provision shall not (to the extent
of such waiver, in the case of a partial waiver) restrict the redemption,
exchange, purchase or other acquisition of, or declaration, payment or making of
any dividends or distributions on the Class B Preferred Stock, any Parity Stock
or any Junior Stock.
 
     6. Voting
 
     (a) VOTING RIGHTS. The holders of Class B preferred Stock shall have no
voting rights whatsoever, except as required by law and except for the voting
rights described in this paragraph 6; provided, however, that the number of
authorized shares of Class B Preferred Stock may be increased or decreased (but
not below the number of shares of Class B Preferred Stock then outstanding) by
the affirmative vote of the holders of at least 66 2/3% of the total voting
power of the then outstanding Voting Securities (as defined in Section C of
Article V of this Certificate), voting together as a single class as provided in
Article IX of this Certificate. Without limiting the generality of the
foregoing, no vote or consent of the holders of Class B Preferred Stock shall be
required for (a) the creation of any indebtedness of any kind of the
Corporation, (b) the creation or designation of any class or series of Senior
Stock, Parity Stock or Junior Stock, or (c) any amendment to this Certificate
that would increase the number of authorized shares of Preferred Stock or the
number of authorized shares of Class B Preferred Stock or that would decrease
the number of authorized shares of Preferred Stock or the number of authorized
shares of Class B Preferred Stock (but not below the number of shares of
Preferred Stock or Class B Preferred Stock, as the case may be, then
outstanding).
 
     (b) ELECTION OF DIRECTORS. The holders of the Class B Preferred Stock shall
have the right to vote at any annual or special meeting of stockholders for the
purpose of electing directors. Each share of Class B Preferred Stock shall have
one vote for such purpose, and shall vote as a single class with any other class
or series of capital stock of the Corporation entitled to vote in any general
election of directors, unless the instrument creating or evidencing such class
or series of capital stock otherwise expressly provides.
 
                                      -26-
<PAGE>   28
 
     7. Waiver.
 
     Any provision of this Section C which, for the benefit of the holders of
Class B Preferred Stock, prohibits, limits or restricts actions by the
Corporation, or imposes obligations on 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 a majority of the number of shares of Class B
Preferred Stock then outstanding (or such greater percentage thereof as may be
required by applicable law or any applicable rules of any national securities
exchange or national interdealer quotation system), either in writing or by vote
at an annual meeting or a meeting called for such purpose at which the holders
of Class B Preferred Stock shall vote as a separate class.
 
     8. Method of Giving Notices.
 
     Any notice required or permitted by the provisions of this Section C to be
given to the holders of shares of Class B Preferred Stock shall be deemed duly
given if deposited in the United States mail, first class mail, postage prepaid,
and addressed to each holder of record at his address appearing on the books of
the Corporation or supplied by him in writing to the Corporation for the purpose
of such notice.
 
     9. Exclusion of Other Rights.
 
     Except as may otherwise be required by law and except for the equitable
rights and remedies which may otherwise be available to holders of Class B
Preferred Stock, the shares of Class B Preferred Stock shall not have any
designations, preferences, limitations or relative rights other than those
specifically set forth in this Certificate.
 
     10. Heading of Subdivisions.
 
     The headings of the various subdivisions of this Section C are for
convenience of reference only and shall not affect the interpretation of any of
the provisions of this Section C.
 
                                   SECTION D
 
                             SERIES PREFERRED STOCK
 
     The Series Preferred Stock may be issued, from time to time, in one or more
series, with such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in a resolution or
resolutions providing for the issue of such series adopted by the Board of
Directors. The Board of Directors, in such resolution or resolutions (a copy of
which shall be filed and recorded as required by law), is also expressly
authorized to fix:
 
                                      -27-
<PAGE>   29
 
          (i) 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;
 
          (ii) the annual dividend rate, if any, for the particular series, and
     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:
 
          (iii) the redemption price or prices for the particular series:
 
          (iv) the right, if any, of the holders of a particular series to
     convert or exchange such stock into or for other classes of stock or
     indebtedness of the Corporation, and the terms and conditions of such
     conversion;
 
          (v) the voting rights, if any, of the holders of a particular series;
     and
 
          (vi) the obligation, if any, of the Corporation to purchase and retire
     and redeem shares of a particular series as a sinking fund or redemption or
     purchase account, the terms thereof and the redemption price or prices per
     share for such series redeemed pursuant to the sinking fund or redemption
     account.
 
     All shares of any one series of the Series Preferred Stock shall be alike
in every particular and all series shall rank equally and be identical in all
respects except insofar as they may vary with respect to the matters which the
Board of Directors is hereby expressly authorized to determine in the resolution
or resolutions providing for the issue of any series of the Series Preferred
Stock.
 
                                   SECTION E
 
                 CLASS A COMMON STOCK AND CLASS B COMMON STOCK
 
     Each share of the Class A Common Stock, par value $1.00 per share (the
"Class A Common Stock"), and each share of the Class B Preferred Stock, par
value $1.00 per share (the "Class B Common Stock"), of the Corporation shall,
except as otherwise provided in this Section E, be identical in all respects and
shall have equal rights and privileges.
 
     1. Voting Rights.
 
     Holders of Class A Common Stock shall be entitled to one vote for each
share of such stock held, and holders of Class B Preferred Stock shall be
entitled to ten votes 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 or in the instrument creating or evidencing any class
or series of Preferred Stock the holders of shares of Class A Common Stock
 
                                      -28-
<PAGE>   30
 
and the holders of shares of Class B Common Stock shall vote with the holders of
Preferred Stock, if any, 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 limitations, 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 class or series of Preferred
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, the
holders of shares of Class B Common Stock or the holders of shares of Preferred
Stock shall be required for the approval of any such matter.
 
     2. Conversion Rights.
 
     Each share of Class B Common Stock shall be convertible, at the option of
the holder thereof, into one share of Class A Common Stock. Any such conversion
may be effected by any holder of Class B Common Stock by surrendering such
holder's certificate or certificates for the Class B Common Stock to be
converted, duly endorsed, at the office of the Corporation or any transfer agent
for the Class B Common Stock, together with a written notice to the Corporation
at such office that such holder elects to convert all or a specified number of
shares of Class B Common Stock represented by such certificate and stating the
name or names in which such holder desires the certificate or certificates for
Class A Common Stock to be issued. If so required by the Corporation, any
certificate for shares surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder of such shares or the duly authorized representative of such
holder. Promptly thereafter, the Corporation shall issue and deliver to such
holder or such holder's nominee or nominees, a certificate or certificates for
the number of shares of Class A Common Stock to which such holder shall be
entitled as herein provided. Such conversion shall be deemed to have been made
at the close of business on the date of receipt by the Corporation or any such
transfer agent of the certificate or certificates, notice and, if required,
instruments of transfer referred to above, and the person or persons entitled to
receive the Class A Common Stock issuable on such conversion shall be treated
for all purposes as the record holder or holders of such Class A Common Stock on
that date. A number of shares of Class A Common Stock equal to the number of
shares of Class B Common Stock outstanding from time to time shall be set aside
and reserved for issuance upon conversion of shares of Class B Common Stock.
Shares of Class B Common Stock that have been converted hereunder shall remain
treasury shares to be disposed of by resolution of the Board of Directors.
Shares of Class A Common Stock shall not be convertible into shares of Class B
Common Stock.
 
     3. Dividends. Subject to paragraph 4 of this Section E, whenever a dividend
is paid to the holders of Class A Common Stock, the Corporation also shall pay
to the holders of Class B Common Stock a dividend per share at least equal to
the dividend per share paid to the holders of the Class A Common Stock. Subject
to paragraph 4 of this Section E, whenever a dividend is paid to the holders of
Class B Common Stock, the Corporation shall also pay to the holders of the Class
A Common Stock a dividend per share at least 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.
 
                                      -29-
<PAGE>   31
 
     4. Share Distributions. If at any time a distribution on the Class A Common
Stock or Class B Common Stock is to be paid in Class A Common Stock, Class B
Common Stock or any other securities of the Corporation (hereinafter sometimes
called a "share distribution"), such share distribution may be declared and paid
only as follows:
 
     (a) a share distribution consisting of Class A Common Stock to holders of
Class A Common Stock and Class B Common Stock, on an equal per share basis; or
to holders of Class A Common Stock only, but in such event there shall also be a
simultaneous share distribution to holders of Class B Common Stock consisting of
shares of Class B Common Stock on an equal per share basis:
 
     (b) a share distribution consisting of Class B Common Stock to holders of
Class B Common Stock and Class A Common Stock, on an equal per share basis; or
to holders of Class B Common Stock only, but in such event there shall also be a
simultaneous share distribution to holders of Class A Common Stock consisting of
shares of Class A Common Stock on an equal per share basis; and
 
     (c) a share distribution consisting of any class of securities of the
Corporation other than Common Stock, to the holders of Class A Common Stock and
the holders of Class B Common Stock on an equal per share basis.
 
     The Corporation shall not reclassify, subdivide or combine one class of its
Common Stock without reclassifying, subdividing or combining the other class of
Common Stock, on an equal per share basis.
 
     5. Liquidation and Mergers. 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
equally, on a share for share basis, in any distribution of the Corporation's
assets upon any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, after payment or provisions for payment of the
debts and other liabilities of the Corporation. Neither the consolidation or
merger of the Corporation with or into any other corporation or corporations nor
the sale, transfer or lease of all or substantially all of the assets of the
Corporation shall itself be deemed to be a liquidation, dissolution or winding
up of the Corporation within the meaning of this paragraph 5.
 
                                   SECTION F
 
                              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
 
                                      -30-
<PAGE>   32
 
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.
Subject to any rights of the holders of any class or series of Preferred Stock
to elect additional 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
 
                          CLASSIFICATION OF THE BOARD
 
     Except as otherwise fixed by or pursuant to the provisions of Article IV
hereof relating to the rights of the holders of any class or series of Preferred
Stock to separately elect additional directors, which additional directors are
not required to be classified pursuant to the terms of such class or series of
Preferred Stock, the Board of Directors of the Corporation shall be divided into
three classes: Class I, Class II and Class III. Each class shall consist, as
nearly as possible, of a number of directors equal to one-third (33 1/3%) of the
then authorized number of members of the Board of Directors. The term of office
of the initial Class I directors shall expire at the annual meeting of
stockholders in 1995; the term of office of the initial Class II directors shall
expire at the annual meeting of stockholders in 1996; and term of office of the
initial Class III directors shall expire at the annual meeting of stockholders
in 1997. At each annual meeting of stockholders of the Corporation the
successors of that class of directors whose term expires at that meeting shall
be elected to hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of their election. The
directors of each class will hold office until their respective successors are
elected and qualified.
 
                                   SECTION C
 
                              REMOVAL OF DIRECTORS
 
     Subject to the rights of the holders of any class or series of Preferred
Stock, directors may be removed from office only for cause (as hereinafter
defined) upon the affirmative vote of the
 
                                      -31-
<PAGE>   33
 
holders of at least 66 2/3% of the total voting power of the then outstanding
Voting Securities (as hereinafter defined), voting together as a single class.
Except as may otherwise to provided by law, "cause" for removal, for purposes of
this Section C, shall exist only if: (i) the director whose removal is proposed
has been convicted of a felony, or has been granted immunity to testify in an
action where another has been convicted of a felony, by a court of competent
jurisdiction and such conviction is no longer subject to direct appeal; (ii)
such director has become mentally incompetent, whether or not so adjudicated,
which mental incompetence directly affects his ability as a director of the
Corporation, as determined by at least 66 2/3% of the members of the Board of
Directors then in office (other than such director); or (iii) such director's
actions or failure to act have been determined by at least 66 2/3% of the
members of the Board of Directors then in office (other than such director) to
be in derogation of the director's duties. The term "Voting Securities" shall
include the Class A Common Stock, the Class B Common Stock and any class or
series of Preferred Stock entitled to vote with the holders of Common Stock
generally upon all matters which may be submitted to a vote of stockholders at
any annual meeting or special meeting thereof.
 
                                   SECTION D
 
                   NEWLY CREATED DIRECTORSHIPS AND VACANCIES
 
     Subject to the rights of the holders of any class or series of Preferred
Stock, 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 for the remainder of the full term of the class of
directors in which the vacancy occurred or to which the new directorship is
apportioned, 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, except as may be
provided in the terms of any class or series of Preferred Stock with respect to
any additional director elected by the holders of such class or series of
Preferred Stock.
 
                                   SECTION E
 
                  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
 
                                      -32-
<PAGE>   34
 
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 E. The Corporation shall be
required to indemnify 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.
 
                                      -33-
<PAGE>   35
 
     3. Amendment or Repeal.
 
     Any repeal or modification of the foregoing provisions of this Section E
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.
 
                                   SECTION F
 
                              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 75% 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.
 
                                   ARTICLE VI
 
                                      TERM
 
     The term of existence of this Corporation shall be perpetual.
 
                                  ARTICLE VII
 
                              STOCK NOT ASSESSABLE
 
     The capital stock of this Corporation shall not be assessable. It shall be
issued as fully paid, and the private property of the stockholders shall not be
liable for the debts, obligations or liabilities of this Corporation. This
Certificate shall not be subject to amendment in this respect.
 
                                  ARTICLE VIII
 
                            MEETINGS OF STOCKHOLDERS
 
                                   SECTION A
 
                          ANNUAL AND SPECIAL MEETINGS
 
     Subject to the rights of the holders of any class or series of Preferred
Stock, stockholder action may be taken only at an annual or special meeting.
Except as otherwise provided in the
 
                                      -34-
<PAGE>   36
 
terms of any class or series of Preferred Stock or unless otherwise prescribed
by law or by another provision of this Certificate, special meetings of the
stockholders of the Corporation, for any purpose or purposes, shall be called by
the Secretary of the Corporation (i) upon the written request of the holders of
not less than 66 2/3% of the total voting power of the outstanding Voting
Securities (as defined in Section C of Article V of this Certificate) or (ii) at
the request of at least 75% of the members of the Board of Directors then in
office.
 
                                   SECTION B
 
                          ANNUAL AND SPECIAL MEETINGS
 
     Except as otherwise provided in the terms of any class or series of
Preferred Stock, no action required to be taken or which may be taken at any
annual meeting or special meeting of stockholders may be taken without a
meeting, and the power of stockholders to consent in writing, without a meeting,
is specifically denied.
 
                                   ARTICLE IX
 
                ACTIONS REQUIRING SUPERMAJORITY STOCKHOLDER VOTE
 
     Subject to the rights of the holders of any class or series of Preferred
Stock, the affirmative vote of the holders of at least 66 2/3% of the total
voting power of the then outstanding Voting Securities (as defined in Section C
of Article V of this Certificate), voting together as a single class at a
meeting specifically called for such purpose, shall be required in order for the
Corporation to take any action to authorize:
 
     (a) the amendment, alteration or repeal of any provision of this
Certificate or the addition or insertion of other provisions herein;
 
     (b) the adoption, amendment or repeal of any provision of the Bylaws of the
Corporation; provided, however, that this clause (b) shall not apply to, and no
vote of the stockholders of the Corporation shall be required to authorize, the
adoption, amendment or repeal of any provision of the Bylaws of the Corporation
by the Board of Directors in accordance with the power conferred upon it
pursuant to Section F of Article V of this Certificate;
 
     (c) the merger or consolidation of this Corporation with or into any other
corporation; provided, however, that this clause (c) shall not apply to any
merger or consolidation (i) as to which the laws of the State of Delaware, as
then in effect, do not require the consent of this Corporation's stockholders,
or (ii) which at least 75% of the members of the Board of Directors then in
office have approved;
 
     (d) the sale, lease or exchange of all, or substantially all, of the
property and assets of the Corporation; or
 
                                      -35-
<PAGE>   37
 
     (e) the dissolution of the Corporation.
 
     All rights at any time conferred upon the stockholders of the Corporation
pursuant to this Certificate are granted subject to the provisions of this
Article IX.
 
                                    # # # #
 
                                      -36-
<PAGE>   38
 
     IN WITNESS WHEREOF, the undersigned has signed this Restated Certificate of
Incorporation this 4th DAY OF August, 1994.
 
                                            TCI/LIBERTY HOLDING COMPANY
 
                                            By:     /s/  Brendan R. Clouston
                                                         Brendan R. Clouston
                                              Title: Executive Vice President
 
ATTEST:
 
By:     /s/  Stephen M. Brett
             Stephen M. Brett
          Title: Secretary
 
                                      -37-
<PAGE>   39
                               STATE OF DELAWARE
                      OFFICE OF THE SECRETARY OF STATE                   PAGE 1

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

         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE FOURTH
DAY OF AUGUST, A.D. 1994, AT 4:18 O'CLOCK P.M.

         A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT
COUNTY RECORDER OF DEEDS FOR RECORDING.



                              [SEAL]
                                             /s/ EDWARD J. FREEL
                                     EDWARD J. FREEL, SECRETARY OF STATE
                                      
                                     AUTHENTICATION:
                                                             7202383
                                                       DATE: 08-04-94
<PAGE>   40
                          TELE-COMMUNICATIONS, INC.

                          CERTIFICATE OF DESIGNATION

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

                     SETTING FORTH A COPY OF A RESOLUTION
                    CREATING AND AUTHORIZING THE ISSUANCE
                  OF A SERIES OF PREFERRED STOCK DESIGNATED
                       AS "CONVERTIBLE PREFERRED STOCK,
                 SERIES C" ADOPTED BY THE BOARD OF DIRECTORS
                         OF TELE-COMMUNICATIONS, INC.

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

         The undersigned Executive Vice President of Tele-Commumcations, Inc.,
a Delaware corporation (the "Corporation"), hereby certifies that the Board of
Directors duly adopted the following resolutions creating a series of preferred
stock designated as "Convertible Preferred Stock, SERIES C":

         "BE IT RESOLVED, that, pursuant to authority expressly granted by the
provisions of the Restated Certificate of Incorporation of this Corporation,
the Board of Directors hereby creates and authorizes the issuance of a series
of preferred stock, par value $1.00 per share, of this Corporation, to consist
of 80,000 shares, and hereby fixes the designations, dividend rights, voting
powers, rights on liquidation and other preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof of the shares of such series (in addition
to the designations, preferences and relative, participating, limitations or
restrictions thereof set forth in the Restated Certificate of Incorporation
that are applicable to preferred stock of all series) as follows:

         1.      Designation. The designation of the series of preferred stock,
par value $1.00 per share, of this Corporation authorized hereby is
"Convertible Preferred Stock, Series C" (the "Convertible Preferred Stock").

         2.      Certain Definitions. Unless the context otherwise requires,
the terms defined in this Section 2 shall have the meanings herein specified:

         Affiliate: As defined in Section 7(b).
<PAGE>   41
         Board of Directors: The Board of Directors of this Corporation and any
authorized committee thereof.

         Capital Stock: Any and all shares, interests, participations or other
equivalents (however designated) of corporate stock of this Corporation.

         Class A Common Stock: The Class A Common Stock, par value $1.00 per
share, of this Corporation as such exists on the date of this Certificate of
Designations, and Capital Stock of any other class into which such Class A
Common Stock may thereafter have been changed.

         Class B Common Stock: The Class B Common Stock, par value $1.00 per
share, of this Corporation as such exists on the date of this Certificate of
Designations, and Capital Stock of any other class into which such Class B
Common Stock may thereafter have been changed.

         Conversion Rate: As defined in Section 5(b).

         Convertible Preferred Holder: As defined in Section 7(a).

         Convertible Securities: Securities, other than the Class B Common
Stock, that are convertible into Class A Common Stock.

         Debt Instrument: Any bond, debenture, note, indenture, guarantee or
other instrument or agreement evidencing any Indebtedness, whether existing
at the Issue Date or thereafter created, incurred, assumed or guaranteed.

         Dividend Payment Date: As defined in Section 3(b).

         Dividend Period: The period from but excluding the First Accrual Date
to and including the first Dividend Payment Date and each three-month period
from but excluding the Dividend Payment Date for the preceding Dividend Period
to and including the Dividend Payment Date for such Dividend Period.

         First Accrual Date: August 8, 1994.

         Indebtedness: Any (i) liability, contingent or otherwise, of this
Corporation (x) for borrowed money whether or not the recourse of the lender is
to the whole of the assets of this Corporation or only to a portion thereof),
(y) evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given other than in connection with the acquisition of
inventory or similar property in the ordinary course of business, or (z) for
the payment of money relating to an obligation under a lease that is required
to be capitalized for financial accounting purposes in accordance with
generally accepted accounting principles; (ii) liability of others described in
the preceding clause (i) which this Corporation has guaranteed or which is
otherwise its legal liability; (iii) obligations secured by a mortgage,
pledge, lien, charge or other encumbrance

                                       2
<PAGE>   42
to which the property or assets of this Corporation are subject whether or not
the obligations secured thereby shall have been assumed by or shall otherwise
be this Corporation's legal liability; and (iv) any amendment, renewal,
extension or refunding of any liability of the types referred to in clauses
(i), (ii) and (iii) above.

         Issue Date: The first date on which any shares of the Convertible
Preferred Stock are first issued or deemed to have been issued.

         Junior Securities: All shares of Class A Common Stock, Class B Common
Stock, and any other class or series of stock of this Corporation not entitled
to receive any dividends unless all dividends required to have been paid or
declared and set apart for payment on the Convertible Preferred Stock shall
have been so paid or declared and set apart for payment and, for purposes of
Section 4 hereof. any class or series of stock of this Corporation not entitled
to receive any assets upon liquidation, dissolution or winding up of the
affairs of this Corporation until the Convertible Preferred Stock shall have
received the entire amount to which such stock is entitled upon such
liquidation, dissolution or winding up.

         Liquidation Value: Measured per Share of the Convertible Preferred
Stock as of any particular date, the sum of(i) $2.375 plus an amount equal to
all dividends accrued on such Share through the Dividend Payment Date
immediately preceding the date on which the Liquidation Value is being
determined, which pursuant to Section 3(c) have been added to and remain a part
of the Liquidation Value as of such date, plus (iii), for purposes of
determining amounts payable pursuant to Sections 4 and 6 hereof, an amount
equal to all unpaid dividends accrued on the sum of the amounts specified in
clauses (i) and (ii) above to the date as of which the Liquidation Value is
being determined.

         Original Holder: As defined in Section 7(a).

         Parity Securities: Any class or series of stock of this Corporation
entitled to receive payment of dividends on a parity with the Convertible
Preferred Stock or entitled to receive assets upon liquidation, dissolution or
winding up of the affairs of this Corporation on a parity with the Convertible
Preferred Stock.

         Permitted Transferee: As defined in Section 7(a).

         Record Date: For dividends payable on any Dividend Payment Date, the
fifteenth day of the month preceding the month during which such Dividend
Payment Date shall occur.

         Redemption Date: As to any Share, the date fixed for redemption of
such Share as specified in the notice of redemption given in accordance with
Section 6(c), provided that no such date will be a Redemption Date unless the
applicable Redemption Price is actually paid on such date or the consideration
sufficient for the payment thereof, and for no other purpose, has been set
apart, and if the Redemption Price is not so paid in full or the consideration
sufficient therefor so set apart

                                       3
<PAGE>   43
then the Redemption Date will be the date on which such Redemption Price is
fully paid or the consideration sufficient for the payment thereof, and for no
other purpose, has been set apart.

         Redemption Price: As to any Share that is to be redeemed on any
Redemption Date, the Liquidation Value as in effect on such Redemption Date.

         Senior Securities: Any class or series of stock of this Corporation
ranking senior to the Convertible Preferred Stock in respect of the right to
receive payment of dividends or the right to participate in any distribution
upon liquidation, dissolution or winding up of the affairs of this Corporation.

         Share: As defined in Section 3(a).

         Special Record Date: As defined in Section 3(C).

         3.   Dividends.

         (a)     Subject to the rights of any Parity Securities with respect to
dividends, the holders of the Convertible Preferred Stock shall be entitled to
receive, and, subject to any prohibition or restriction contained in any Debt
Instrument, this Corporation shall be obligated to pay, but only out of funds
legally available therefor, preferential cumulative cash dividends which shall
accrue as provided herein. Except as otherwise provided in Sections 3(c) or
3(d) hereof, dividends on each share of Convertible Preferred Stock
(hereinafter referred to as a "Share") shall accrue on a daily basis at the
rate of 5 1/2% per annum of the Liquidation Value to and including the date of
conversion thereof pursuant to Section 5 or the date on which the Liquidation
Value or Redemption Price of such Share is made available pursuant to Section 4
or 6 hereof, respectively. Dividends on the Convertible Preferred Stock shall
accrue as provided herein, whether or not such dividends have been declared and
whether or not there are profits, surplus or other funds of the Corporation
legally or contractually available for the payment of dividends.

         (b)     Accrued dividends on the Convertible Preferred Stock shall be
payable quarterly on the first day of each January, April, July and October, or
the immediately preceding business day if such first day is a Saturday, Sunday
or legal holiday (each such payment date being hereinafter referred to as a
"Dividend Payment Date"), commencing on October 1, 1994 to the holders of
record of the Convertible Preferred Stock as of the close of business on the
applicable Record Date. For purposes of determining the amount of dividends
"accrued" 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 in Section 3(a) for
actual days elapsed from but excluding the First Accrual Date (in the case of
any date prior to the first Dividend Payment Date) or the last preceding
Dividend Payment Date (in the case of any other date) to and including the date
as of which such determination is to be made, based on a 365-day year.

                                       4
<PAGE>   44
         (c)     If on any Dividend Payment Date this Corporation pursuant to
applicable law or the terms of any Debt Instrument shall be prohibited or
restricted from paying in cash the full dividends to which holders of the
Convertible Preferred Stock and any Parity Securities shall be entitled, the
amount available for such payment pursuant to applicable law and which is not
restricted by the terms of any Debt instrument shall be distributed among the
holders of the Convertible Preferred Stock and such Parity Securities ratably
in proportion to the full amounts to which they would otherwise be entitled. To
the extent not paid on each Dividend Payment Date, all dividends which have
accrued on each Share during the Dividend Period ending on such Dividend
Payment Date will be added cumulatively to the Liquidation Value of such Share
and will remain a part thereof until such dividends are paid. In the event that
dividends are not paid in full on two consecutive Dividend Payment Dates,
dividends on that portion of the Liquidation Value of each Share which consists
of accrued dividends that have theretofore been or thereafter are added to, and
remain a part of, the Liquidation Value in accordance with the preceding
sentence shall accrue cumulatively on a daily basis at the rate of fifteen
percent (15%) per annum, from and after such second consecutive Dividend
Payment Date to and including the date of conversion of such Share pursuant to
Section 5 or the date on which the Liquidation Value or Redemption Price of
such Share is made available pursuant to Section 4 or 6 hereof, respectively,
unless such portion of the Liquidation Value that consists of accrued unpaid
dividends shall be earlier paid in full. Such portion of the Liquidation Value
as consists of accrued unpaid dividends, may be declared and paid at any time
without reference to any regular Dividend Payment Date, to holders of record as
of the close of business on such date, not more than 50 days nor less than 10
days preceding the payment date thereof, as may be fixed by the Board of
Directors of this Corporation (the "Special Record Date").

         (d)     In the event that on any date fixed for redemption of Shares
pursuant to Section 6 (other than on any date fixed for a redemption of Shares
pursuant to Section 6(a)), this Corporation shall fail to pay the Redemption
Price due and payable upon presentation and surrender of the stock certificates
evidencing Shares to be redeemed, then dividends on such Shares shall accrue
cumulatively on a daily basis at the rate of fifteen percent (15%) per annum of
the Liquidation Value thereof from and after such Redemption date to and
including the date of conversion of such Shares pursuant to Section 5 or the
date on which the Liquidation Value or Redemption Price of such Shares is made
available pursuant to Section 4 or 6 hereof, respectively.

         (e)     Notice of each Special Record Date shall be mailed, in the
manner provided in Section 6(c), to the holders of record of the Convertible
Preferred Stock not less than 15 days prior thereto.

         (f)  As long as any Convertible Preferred Stock shall be outstanding,
no dividend, whether in cash or property, shall be paid or declared, nor shall
any other distribution be made, on any Junior Security, nor shall any shares
of any Junior Security be purchased, redeemed, or otherwise acquired for value
by the Corporation, unless the holders of the Convertible Preferred Stock shall
have received all dividends to which they are entitled pursuant to Section 3(a)
hereof for all the Dividend Periods preceding the date on which such dividend
on the Junior Securities is to

                                       5
<PAGE>   45
occur, or such dividends shall have been declared and the consideration
sufficient for the payment thereof set apart so as to be available for the
payment in full thereof and for no other purpose. The provisions of this
Section 3(f) shall not apply (i) to a dividend payable in any Junior Security,
or (ii) to the repurchase, redemption or other acquisition of shares of any
Junior Security solely through the issuance of Junior Securities (together
with a cash adjustment for tractional shares, if any) or through the
application of the proceeds from the sale of Junior Securities.

         4.      Liquidation. Upon any liquidation, dissolution or winding up
of this Corporation, whether voluntary or involuntary, the holders of
Convertible Preferred Stock shall be entitled to be paid an amount in cash
equal to the aggregate Liquidation Value at the date fixed for liquidation of
all Shares outstanding before any distribution or payment is made upon any
Junior Securities, which payment shall be made pari passu with any such payment
made to the holders of any Parity Securities. The holders of Convertible
Preferred Stock shall be entitled to no other or further distribution of or
participation in any remaining assets of this Corporation after receiving the
Liquidation Value per Share. If upon such liquidation, dissolution or winding
up, the assets of this Corporation to be distributed among the holders of
Convertible Preferred Stock and to all holders of Parity Securities are
insufficient to permit payment in full to such holders of the aggregate
preferential amounts which they are entitled to be paid, then the entire assets
of this Corporation to be distributed to such holders shall be distributed
ratably among them based upon the full preferential amounts to which the shares
of Convertible Preferred Stock and such Parity Securities would otherwise
respectively be entitled. Upon any such liquidation, dissolution or winding up,
after the holders of Convertible Preferred Stock and Parity Securities have
been paid in full the amounts to which they are entitled, the remaining assets
of this Corporation may be distributed to the holders of Junior Securities.
This Corporation shall mail written notice of such liquidation, dissolution or
winding up to each record holder of Convertible Preferred Stock not less than
30 days prior to the payment date stated in such written notice. Neither the
consolidation or merger of this Corporation into or with any other corporation
or corporations, nor the sale, transfer or lease by this Corporation of all or
any part of its assets, shall be deemed to be a liquidation, dissolution or
winding up of this Corporation within the meaning of this Section 4.

         5.   Conversion.

         (a)     Unless previously called for redemption as provided in Section
6 hereof, the Convertible Preferred Stock may be converted at any time or from
time to time, in such manner and upon such terms and conditions as hereinafter
provided in this Section 5 into fully paid and nonassessable full shares of
Class A Common Stock. In the case of Shares called for redemption by this
Corporation pursuant to Section 6(a) hereof, the conversion right provided by
this Section 5 shall terminate at the close of business on the fifteenth day
preceding the date fixed for redemption.  In the case of Shares required to be
redeemed pursuant to Section 6(b), the conversion right provided by this
Section 5 shall terminate immediately upon receipt by this Corporation of a
notice given pursuant to said Section. In case cash, securities or property
other than Class A Common Stock shall be payable, deliverable or issuable upon
conversion as provided herein, then all references to Class A

                                       6
<PAGE>   46
Common Stock in this Section 5 shall be deemed to apply, so far as appropriate
and as nearly as may be, to such cash, property or other securities.

         (b)     Subject to the provisions for adjustment hereinafter set forth
in this Section 5, the Convertible Preferred Stock may be convened into Class A
Common Stock at the initial conversion rate of 100 fully paid and
non-assessable shares of Class A Common Stock for one share of the Convertible
Preferred Stock. (This conversion rate as from time to time adjusted
cumulatively pursuant to the provisions of this Section is hereinafter referred
to as the "Conversion Rate").

         (c)  In case this Corporation shall (i) pay a dividend or make a
distribution on its outstanding shares of Class A Common Stock in shares of its
Capital Stock, (ii) subdivide the then outstanding shares of Class A Common
Stock into a greater number of shares of Class A Common Stock, (iii) combine
the then outstanding shares of Class A Common Stock into a smaller number of
shares of Class A Common Stock, or (iv) issue by reclassification of its shares
of Class Common Stock any shares of any other class of Capital Stock of this
Corporation (including any such reclassification in connection with a merger in
which this Corporation is the continuing corporation), then the Conversation
Rate in effect immediately prior to the opening of business on the record date
for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted so that the holder of each
share of the Convertible Preferred Stock thereafter surrendered for conversion
shall be entitled to receive the number and kind of shares of Capital Stock of
this Corporation that such holder would have owned or been entitled to receive
immediately following such action had such shares of Convertible Preferred
Stock been converted immediately prior to such time. An adjustment made
pursuant to this Section 5(c) for a dividend or distribution shall become
effective immediately after the record date for the dividend or distribution
and an adjustment made pursuant to this Section 5(c) for a subdivision,
combination or reclassification shall become effective immediately after the
effective date of the subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any action listed above shall be
taken.

         (d)     In case this Corporation shall issue any rights or warrants to
all holders of shares of Class A Common Stock entitling them (for a period
expiring within 45 days after the record date for the determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Class A Common Stock (or Convertible Securities) at a price
per share of Class A Common Stock (or having an initial exercise price or
conversion price per share of Class A Common Stock) less than the then current
market price per share of Class A Common Stock (as determined in accordance
with the provisions of Section 5(f) below) on such record date, the number of
shares of Class A Common Stock into which each Share shall thereafter be
convertible shall be determined by multiplying the number of shares of Class A
Common Stock into which such Share was theretofore convertible immediately
prior to such record date by a fraction of which the numerator shall be the
number of shares of Class A Common Stock outstanding on such record date plus
the number of additional shares of Class A Common Stock offered for
subscription or purchase (or into which the Convertible Securities so offered
are initially convertible) and of

                                       7
<PAGE>   47
which the denominator shall be the number of shares of Class A Common Stock
outstanding on such record date plus the number of shares of Class A Common
Stock which the aggregate offering price of the total number of shares of Class
A Common Stock so offered (or the aggregate initial conversion or exercise
price of the Convertible Securities so offered) would purchase at the then
current market price per share of Class A Common Stock (as determined in
accordance with the provisions of Section 5(f) below) on such record date. Such
adjustment shall be made successively whenever any such rights or warrants are
issued and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants. In
the event that all of the shares of Class A Common Stock (or all of the
Convertible Securities) subject to such rights or warrants have not been issued
when such rights or warrants expire (or, in the case of rights or warrants to
purchase Convertible Securities which have been exercised, all of the shares of
Class A Common Stock issuable upon conversion of such Convertible Securities
have not been issued prior to the expiration of the conversion right thereof),
then the Conversion Rate shall be readjusted retroactively to be the Conversion
Rate which would then be in effect had the adjustment upon the issuance of such
rights or warrants been made on the basis of the actual number of shares of
Class A Common Stock (or Convertible Securities) issued upon the exercise of
such rights or warrants (or the conversion of such Convertible Securities); but
such subsequent adjustment shall not affect the number of shares of Class A
Common Stock issued upon the conversion of any Share prior to the date such
subsequent adjustment is made.

         (e)     In case this Corporation shall distribute to all holders of
shares of Class A Common Stock (including any such distribution made in
connection with a merger in which this Corporation is the continuing
corporation, other than a merger to which Section 5(g) is applicable) any
evidences of its indebtedness or assets (other than cash dividends or Capital
Stock) or rights or warrants to purchase shares of Class A Common Stock or
Class B Common Stock or securities convertible into shares of Class A Common
Stock or Class B Common Stock (excluding those referred to in Section 5(d)
above), then in each such case the number of shares of Class A Common Stock
into which each Share shall thereafter be convertible shall be determined by
multiplying the number of shares of Class A Common Stock into which such Share
was theretofore convertible immediately prior to the record date for the
determination of stockholders entitled to receive the distribution by a
fraction of which the numerator shall be the then current market price per share
of Class A Common Stock (as determined accordance with the provisions of
Section 5(f) below) on such record date and of which the denominator shall be
such current market price per share of Class A Common Stock less the fair
market value on such record date (as determined by the Board of Directors of
this Corporation, whose determination shall be conclusive) of the portion of
the assets or evidences of indebtedness or rights and warrants so to be
distributed applicable to one share of Class A Common Stock. Such adjustment
shall be made successively whenever any such distribution is made and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.

         (f)     For the purpose of any computation under Section 5(d), (e) or
(k), the current market price per share of Class A Common Stock at any date
shall be deemed to be the average of the daily closing prices for a share of
Class A Common Stock for the ten (10) consecutive trading

                                       8
<PAGE>   48
days before the day in question. The closing price or each day shall be the
last reported sale price regular way or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked prices
regular way, in either case on the composite tape, or if the shares of Class A
Common Stock are not quoted on the composite tape, on the principal United
States securities exchange registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on which the shares of Class A Common
Stock are listed or admitted to trading, or if they are not listed or admitted
to trading on any such exchange, the last reported sale price (or the average
of the quoted closing bid and asked prices if there were no reported sales) as
reported by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or any comparable system, or if the Class A Common Stock is
not quoted on NASDAQ or any comparable system, the average of the closing bid
and asked prices as furnished by any member of the National Association of
Securities Dealers, Inc. selected from time to time by this Corporation for
that purpose or, in the absence of such quotations, such other method of
determining market value as the Board of Directors shall from time to time deem
to be fair.

         (g)     In case of any reclassification or change in the Class A
Common Stock (other than any reclassification or change referred to in Section
5(c) and other than a change in par value) or in case of any consolidation of
this Corporation with any other corporation or any merger of this Corporation
into another corporation or of another corporation into this Corporation (other
than a merger in which this Corporation is the continuing corporation and which
does not result in any reclassification or change (other than a change in par
value or any reclassification or change to which Section 5(c) is applicable) in
the outstanding Class A Common Stock), or in case of any sale or transfer to
another corporation or entity (other than by mortgage or pledge) of all or
substantially all of the properties and assets of this Corporation, this
Corporation (or its successor in such consolidation or merger) or the purchaser
of such properties and assets shall make appropriate provision so that the
holder of a Share shall have the right thereafter to convert such Share into
the kind and amount of shares of stock and other securities and property that
such holder would have owned immediately after such reclassification, change,
consolidation, merger, sale or transfer if such holder had converted such Share
into Class A Common Stock immediately prior to the effective date of such
reclassification, change, consolidation, merger, sale or transfer (assuming for
this purpose (to the extent applicable) that such holder failed to exercise any
rights of election and received per share of Class A Common Stock the kind and
amount of shares of stock and other securities and property received per share
by a plurality of the non-electing shares), and the holders of the Convertible
Preferred Stock shall have no other conversion rights under these provisions;
provided, that effective provision shall be made, in the Articles or
Certificate of Incorporation of the resulting or surviving corporation or
otherwise or in any contracts of sale or transfer, so that the provisions set
forth herein for the protection of the conversion rights of the Convertible
Preferred Stock shall thereafter be made applicable, as nearly as reasonably
may be to any such other shares of stock and other securities and property
deliverable upon conversion of the Convertible Preferred Stock remaining
outstanding or other convertible preferred stock or other Convertible
Securities received by the holders of Convertible Preferred Stock in place
thereof; and provided, further, that any such resulting or surviving
corporation or purchaser shall expressly assume the obligation to deliver, upon
the exercise of the conversion privilege, such shares, securities or property
as the holders of the

                                       9
<PAGE>   49
Convertible Preferred Stock remaining outstanding, or other convertible
preferred stock or other convertible securities received by the holders in
place thereof, shall be entitled to receive pursuant to the provisions hereof,
and to make provisions for the protection of the conversion rights as above
provided.

         (h)     Whenever the Conversion Rate or the conversion privilege shall
be adjusted as provided in Sections 5(c), (d), (e) or(g), this Corporation
shall promptly cause a notice to be mailed to the holders of record of the
Convertible Preferred Stock describing the nature of the event requiring such
adjustment, the Conversion Rate in effect immediately thereafter and the kind
and amount of stock or other securities or property into which the
Convertible Preferred Stock shall be convertible after such event. Where
appropriate, such notice may be given in advance and included as a part of a
notice required to be mailed under the provisions of Section 5(j).

         (i)     This Corporation may, but shall not be required to, make any
adjustment of the Conversion Rate if such adjustment would require an increase
or decrease of less than 1% in such Conversion Rate; provided, however, that
any adjustments which by reason of this Section 5(i) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 5 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. In any case in
which this Section 5(i) shall require that an adjustment shall become effective
immediately after a record date for such event, the Corporation may defer until
the occurrence of such event (x) issuing to the holder of any shares of
Convertible Preferred Stock converted after such record date and before the
occurrence of such event the additional shares of Class A Common Stock or other
Capital Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Class A Common Stock, or
other Capital Stock issuable upon such conversion before giving effect to such
adjustment and (y) paying to such holder cash in lieu of any fractional
interest to which such holder is entitled pursuant to Section 5(n); provided,
however, that, if requested by such holder, this Corporation shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares of Class A Common Stock or other
Capital Stock, and such cash, upon the occurrence of the event requiring such
adjustment.

         (j)     In case at any time:

                 (i)      this Corporation shall take any action which would
         require an adjustment in the Conversion Rate pursuant to this Section;

                 (ii)     there shall be any capital reorganization or
         reclassification of the Class A Common Stock (other than a change in
         par value), or any consolidation or merger to which the Corporation is
         a party and for which approval of any shareholders of this Corporation
         is required, or any sale, transfer or lease of all or substantially
         all of the properties and assets of the Corporation, or a tender offer
         for shares of Class A Common Stock representing,

                                       10
<PAGE>   50
         together with any shares of Class B Common Stock tendered for in such
         tender offer, at least a majority of the total voting power
         represented by the outstanding shares of Class A Common Stock and
         Class B Common Stock which has been recommended by the Board of
         Directors as being in the best interests of the holders of Class A
         Common Stock; or

                 (iii)    there shall be a voluntary or involuntary
         dissolution, liquidation or winding up of this Corporation;

then, in any such event, this Corporation shall give written notice, in the
manner provided in Section 6(c) hereof, to the holders of the Convertible
preferred Stock at their respective addresses as the same appear on the books
of the Corporation, at least twenty days (or ten days in the case of a
recommended tender offer as specified in clause (ii) above) prior to any record
date for such action, dividend or distribution or the date as of which it is
expected that holders of Class A Common Stock of record shall be entitled to
exchange their shares of Class A Common Stock for securities or other property,
if any, deliverable upon such reorganization, reclassification, consolidation,
merger, sale, transfer, lease, tender offer, dissolution, liquidation or
winding up; provided, however, that any notice required by any event described
in clause (ii) of this Section 5(j) shall be given in the manner and at the
time that such notice is given to the holders of Class A Common Stock. Without
limiting the obligations of this Corporation to provide notice of corporate
actions hereunder, the failure to give the notice required by this Section 5(j)
or any defect therein shall not affect the legality or validity of any such
corporate action of the Corporation or the vote upon such action.

         (k)     Before any holder of Convertible Preferred Stock shall be
entitled to convert the same into Class A Common Stock, such holder shall
surrender the certificate or certificates for such Convertible Preferred Stock
at the office of this Corporation or at the office of the transfer agent for
the Convertible Preferred Stock, which certificate or certificates, if this
Corporation shall so request, shall be duly endorsed to this Corporation or in
blank or accompanied by proper instruments of transfer to this Corporation or
in blank (such endorsements or instruments of transfer to be in form
satisfactory to this Corporation), and shall given written notice to this
Corporation at said office that it elects to convert all or a part of the
Shares represented by said certificate or certificates in accordance with the
terms of this Section 5, and shall state in writing therein the name or names
in which such holder wishes the certificates for Class A Common Stock to be
issued. Every such notice of election to convert shall constitute a contract
between the holder of such Convertible Preferred Stock and the Corporation,
whereby the holder of such Convertible Preferred Stock shall be deemed to
subscribe for the amount of Class A Common Stock which such holder shall be
entitled to receive upon conversion of the number of shares of Convertible
Preferred Stock to be converted, and, in satisfaction of such subscription, to
deposit the shares of Convertible Preferred Stock to be converted, and thereby
this Corporation shall be deemed to agree that the surrender of the shares of
Convertible Preferred Stock to be converted shall constitute full payment of
such subscription for Class A Common Stock to be issued upon such conversion.
This Corporation will as soon as practicable after such deposit of a
certificate or certificates for Convertible Preferred

                                      11
<PAGE>   51
Stock, accompanied by the written notice and the statement above prescribed,
issue and deliver at the office of this Corporation or of said transfer agent
to the person for whose account such Convertible Preferred Stock was so
surrendered, or to his nominee(s) or, subject to compliance with applicable
law, transferee(s), a certificate or certificates for the number of full shares
of Class A Common Stock to which such holder shall be entitled, together with
cash in lieu of any fraction of a share as hereinafter provided. If surrendered
certificates for Convertible Preferred Stock are converted only in part, this
Corporation will issue and deliver to the holder, or to his nominee(s) without
charge therefor, a new certificate or certificates representing the aggregate
of the unconverted Shares. Such conversion shall be deemed to have been made as
of the date of such surrender of the Convertible Preferred Stock to be
converted; and the person or persons entitled to receive the Class A Common
Stock issuable upon conversion of such Convertible Preferred Stock shall be
treated for all purposes as the record holder or holders of such Class A Common
Stock on such date.

         Upon the conversion of any Share, this Corporation shall pay, to the
holder of record of such Share on the immediately preceding Record Date, all
accrued but unpaid dividends on such Share to the date of the surrender of such
Share for conversion. Such payment shall be made in cash or, at the election of
this Corporation, the issuance of certificates representing such number of
shares of Class A Common Stock as have an aggregate current market price (as
determined in accordance with Section 5(f)) on the date of issuance equal to
the amount of such accrued but unpaid dividends. Upon the making of such
payment to the person entitled thereto as determined pursuant to the first
sentence of this paragraph, no further dividends shall accrue on such Share or
be payable to any other person.

         The issuance of certificates for shares of Class A Common Stock upon
conversion of shares of Convertible Preferred Stock shall be made without
charge for any issue, stamp or other similar tax in respect of such issuance,
provided, however, if any such certificate is to be issued in a name other than
that of the registered holder of the share or shares of Convertible Preferred
Stock converted, the person or persons requesting the issuance thereof shall
pay to this Corporation the amount of any tax which may be payable in respect
of any transfer involved in such issuance or shall establish to the
satisfaction of this Corporation that such tax has been paid.

         This Corporation shall not be required to convert any shares of
Convertible Preferred Stock, and no surrender of Convertible Preferred Stock
shall be effective for that purpose, while the stock transfer books of this
Corporation are closed for any purpose; but the surrender of Convertible
Preferred Stock for conversion during any period while such books are so closed
shall become effective for conversion immediately upon the reopening of such
books, as if the conversion had been made on the date such Convertible
Preferred Stock was surrendered.

         (l)     This Corporation shall at all times reserve and keep
available, solely for the purpose of issuance upon conversion of the
outstanding shares of Convertible Preferred Stock, such number of shares of
Class A Common Stock as shall be issuable upon the conversion of all
outstanding Shares, provided that nothing contained herein shall be construed
to preclude this

                                       12
<PAGE>   52
Corporation from satisfying its obligations in respect of the conversion of the
outstanding shares of Convertible Preferred Stock by delivery of shares of
Class A Common Stock which are held in the treasury of this Corporation. This
Corporation shall take all such corporate and other actions as from time to
time may be necessary to insure that all shares of Class A Common Stock
issuable upon conversion of shares of Convertible Preferred Stock at the
Conversion Rate in effect from time to time will, upon issue, be duly and
validly authorized and issued, fully paid and nonassessable and free of any
preemptive or similar rights.

         (m)     All shares of Convertible Preferred Stock received by this
Corporation upon conversion thereof into Class A Common Stock shall be retired
and shall be restored to the status of authorized and issued shares of
preferred stock (and may be reissued as part of another series of the preferred
stock of this Corporation, but such shares shall not be reissued as Convertible
Preferred Stock).

         (n)     This Corporation shall not be required to issue fractional
shares of Class A Common Stock or scrip upon conversion of the Convertible
Preferred Stock. As to any final fraction of a share of Class A Common Stock
which a holder of one or more Shares would otherwise be entitled to receive
upon conversion of such Shares in the same transaction, this Corporation shall
pay a cash adjustment in respect of such final fraction in an amount equal to
the same fraction of the market value of a full share of Class A Common Stock.
For purposes of this Section 5(n), the market value of a share of Class A
Common Stock shall be the last reported sale price regular way on the business
day immediately preceding the date of conversion, or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way on such day, in either case on the composite tape, or if the
shares of Class A Common Stock are not quoted on the composite tape, on the
principal United States securities exchange registered under the Exchange Act
on which the shares of Class A Common Stock are listed or admitted to trading,
or if the shares of Class A Common Stock are not listed or admitted to trading
on any such exchange, the last reported sale price (or the average of the
quoted last reported bid and asked prices if there were no reported sales) as
reported by NASDAQ or any comparable system, or if the Class A Common Stock is
not quoted on NASDAQ or any comparable system, the average of the closing bid
and asked prices as furnished by any member of the National Association of
Securities Dealers, Inc. selected from time to time by this Corporation for
that purpose or, in the absence of such quotations, such other method of
determining market value as the Board of Directors shall from time to time deem
to be fair.

         6.  Redemption.

         (a)     Subject to the provisions of Section 6(f), the shares of
Convertible Preferred Stock may be redeemed out of funds legally available
therefor, at the option of this Corporation by action of the Board of
Directors, in whole or from time to time in part, at any time after August 8.
2001 at the Redemption Price per share as of the applicable Redemption Date. If
less than all outstanding Shares are to be redeemed, Shares shall be redeemed
ratably among the holders thereof.

                                       13
<PAGE>   53
         (b)     Subject to the rights of any Parity Securities and the
provisions of Section 6(f) and subject to any prohibitions or restrictions
contained in any Debt Instrument, at any time on or after August 8,2001, any
holder shall have the right, at such holder's option, to require redemption by
this Corporation at the Redemption Price per Share as of the applicable
Redemption Date of all or any portion of his Shares having an aggregate
Liquidation Value in excess of $1,000,000, by written notice to this
Corporation stating the number of Shares to be redeemed. This Corporation shall
redeem, out of funds legally available therefor and not restricted in
accordance with the first sentence of this Section 6(b), the Shares so
requested to be redeemed on such date within 60 days following this
Corporation's receipt of such notice as this Corporation shall state in its
notice given pursuant to Section 6(c). If the funds of this Corporation legally
available for redemption of Shares and not restricted in accordance with the
first sentence of this Section 6(b) are insufficient to redeem the total number
of shares required to be redeemed pursuant to this Section 6(b), those funds
which are legally available for redemption of such Shares and not so restricted
will be used to redeem the maximum possible number of such Shares ratably among
the holders who have required Shares to be redeemed under this Section 6(b). At
any time thereafter when additional funds of this Corporation are legally
available and not so restricted for such purpose, such funds will immediately
be used to redeem the Shares this Corporation failed to redeem on such
Redemption Date until the balance of such Shares are redeemed.

         (c)     Notice of any redemption pursuant to this Section shall be
mailed, first class, postage prepaid, not less than 30 days nor more than 60
days prior to the Redemption Date, to the holders of record of the shares of
Convertible Preferred Stock to be redeemed, at their respective addresses as
the same appear upon the books of this Corporation or are supplied by them in
writing to this Corporation for the purpose of such notice (with telephonic or
facsimile confirmation of notice to Bill Daniels so long as he is a holder of
record); but no failure to mail such notice or any defect therein or in the
mailing thereof shall affect the validity of the proceedings for the redemption
of any shares of the Convertible Preferred Stock. Such notice shall set forth
the Redemption Price, the Redemption Date, the number of Shares to be redeemed
and the place at which the Shares called for redemption will, upon presentation
and surrender of the stock certificates evidencing such Shares, be redeemed. In
case fewer than the total number of shares of Convertible Preferred Stock
represented by any certificate are redeemed, a new certificate representing the
number of unredeemed Shares will be issued to the holder thereof without cost
to such holder.

         (d)     If notice of any redemption by this Corporation pursuant to
this Section 6 shall have been mailed as provided in Section 6(c) and if on or
before the Redemption Date specified in such notice the consideration necessary
for such redemption shall have been set apart so as to be available therefor
and only therefor, then on and after the close of business on the Redemption
Date, the Shares called for redemption, notwithstanding that any certificate
therefor shall not have been surrendered for cancellation, shall no longer be
deemed outstanding, and all rights with respect to such Shares shall forthwith
cease and terminate, except the right of the holders thereof to receive upon
surrender of their certificates the consideration payable upon redemption
thereof.

                                       14
<PAGE>   54
         (e)     All shares of Convertible Preferred Stock redeemed, retired,
purchased or otherwise acquired by this Corporation shall be retired and shall
be restored to the status of authorized and unissued shares of preferred stock
(and may be reissued as part of another series of the preferred stock of this
Corporation, but such shares shall not be reissued as Convertible Preferred
Stock).

         (f)     If at any time this Corporation shall have failed to pay, or
declare and set apart the consideration sufficient to pay, all dividends
accrued up to and including the immediately preceding Dividend Payment Date on
the Convertible Preferred Stock, and until all dividends accrued up to and
including the immediately preceding Dividend Payment Date on the Convertible
Preferred Stock shall have been paid or declared and set apart so as to be
available for the payment in full thereof and for no other purpose, this
Corporation shall not redeem, pursuant to a sinking fund or otherwise, any
shares of Convertible Preferred Stock or Junior Securities, unless all then
outstanding shares of Convertible Preferred Stock are redeemed, and shall not
purchase or otherwise acquire any shares of Convertible Preferred Stock or
Junior Securities. If and so long as this Corporation shall fail to redeem on a
Redemption Date pursuant to Section 6(b) all shares of Convertible Preferred
Stock required to be redeemed on such date, this Corporation shall not redeem,
or discharge any sinking fund obligation with respect to, any Junior
Securities, unless all then outstanding shares of Convertible Preferred Stock
are redeemed, and shall not purchase or otherwise acquire any shares of
Convertible Preferred Stock or Junior Securities. Nothing contained in this
Section 6(f) shall prevent the purchase or acquisition of shares of Convertible
Preferred Stock pursuant to a purchase or exchange offer or offers made to
holders of all outstanding shares of Convertible Preferred Stock, provided that
as to holders of all outstanding shares of Convertible Preferred Stock, the
terms of the purchase or exchange offer for all such shares are identical.  The
provisions of this Section 6(f) are for the benefit of holders of Convertible
Preferred Stock and accordingly the provisions of this Section 6(f) shall not
restrict any redemption by this Corporation of Shares held by any holder,
provided that all other holders of Shares shall have waived in writing the
benefits of this provision with respect to such redemption.

         7.  Transfer.

         (a)     Without the prior written consent of this Corporation, no
person holding shares of Convertible Preferred Stock of record (hereinafter
called a "Convertible Preferred Holder") may transfer, and this Corporation
shall not register the transfer of, such shares of Convertible Preferred Stock,
whether by sale, assignment, or otherwise, except to a Permitted Transferee.

                 (i)      In the case of a Convertible Preferred Holder
         acquiring record and beneficial ownership of the shares of Convertible
         Preferred Stock in question upon initial issuance by this Corporation
         (an "Original Holder"), a "Permitted Transferee" shall mean:

                          (x)     any Affiliate (as defined in Section 7(b)) of
                                  such Original Holder.

                                       15
<PAGE>   55
                          (y)     any other Original Holder (or any Affiliate 
                                  of any such other Original Holder), or

                          (z)     any person or entity to whom Shares are
                                  transferred by an Original Holder pursuant to
                                  a gift or bequest or pursuant to the laws of
                                  intestacy.

                 (ii)     In the case of a Convertible Preferred Holder which
         is a Permitted Transferee of an Original Holder, a "Permitted
         Transferee" shall mean:

                          (x)     any Original Holder,

                          (y)     any Permitted Transferee of an Original
                                  Holder, except any transferee referred to in
                                  clause (i)(z) above, or

                          (z)     any person or entity to whom Shares are
                                  transferred by a Permitted Transferee
                                  pursuant to a gift or bequest or pursuant to
                                  the laws of intestacy.

         (b)     For purposes of this Section 7, the term "Affiliate" shall
mean (i) any person or corporation that owns beneficially and of record at
least a majority of the outstanding securities representing the right, other
than as affected by events of default, to vote for the election of directors
("voting securities") of an Original Holder or (ii) any person or corporation
at least a majority of the voting securities of which are owned beneficially
and of record by an Original Holder, where in the case of both (i) and (ii),
voting securities will be deemed "owned" by a person or corporation if either
owned directly or if owned indirectly through one or more intermediary
corporations at least a majority of the voting securities of which are owned
beneficially and of record by that person or corporation or by an intermediary
corporation in such a majority or more chain of ownership.

         (c)     This Corporation may, in connection with preparing a list of
stockholders entitled to vote at any meeting of stockholders, or as a condition
to the transfer or the registration of shares of Convertible Preferred Stock on
this Corporation's books, require the furnishing of such affidavits or other
proof as it deems necessary to establish that any person is the beneficial
owner of shares of Convertible Preferred Stock or is a Permitted Transferee.

         (d)     Shares of Convertible Preferred Stock shall be registered in
the names of the beneficial owners thereof and not in "street" or "nominee"
name. For this purpose, a "beneficial owner" of any shares of Convertible
Preferred Stock shall mean a person who, or any entity which, possesses the
power, either singly or jointly, to direct the voting or disposition of such
shares. Certificates for shares of Convertible Preferred Stock shall bear a
legend referencing the restrictions on transfer imposed by this Section 7.

                                       16
<PAGE>   56
         8.      Voting Rights. The holders of the Convertible Preferred Stock
shall be entitled to vote on all matters submitted to a vote of the holders of
the Capital Stock of this Corporation which is entitled to vote generally on
the election of directors. Each Share shall entitle the registered holder
thereof to such number of votes as is equal to the number of shares of Class A
Common Stock into which such Share is then convertible. Holders of Convertible
Preferred Stock shall vote together with holders of common stock and shall not
be entitled to vote as a class except as otherwise required by law or this
Corporation's Restated Certificate of Incorporation.

         9.      Amendment. No amendment or modification of the designation,
rights, preferences, and limitations of the Shares set forth herein shall be
binding or effective without the prior consent of the holders of record of
Shares representing 66 2/3% of the Liquidation Value of all Shares outstanding
at the time such action is taken.

         10.     Preemptive RightS. The holders of the Convertible Preferred
Stock will not have any preemptive right to subscribe for or purchase any
shares of stock or any other securities which may be issued by this
Corporation.

         11.     Senior Securities. The Convertible Preferred Stock shall not
rank junior to any other classes or series of stock of this Corporation in
respect of the right to receive dividends or the right to participate in any
distribution upon liquidation, dissolution or winding up of this Corporation.
Without the prior consent of the holders of record of Shares representing 
66 2/3% of the Liquidation Value of all Shares then outstanding, this 
Corporation shall not issue any Senior Securities.

         12.     Exclusion of Other Rights. Except as may otherwise be required
by law and for the equitable rights and remedies that may otherwise be
available to holders of Convertible Preferred Stock, the shares of Convertible
Preferred Stock shall not have any designations, preferences, limitations or
relative rights, other than those specifically set forth in these resolutions
(as such resolutions may, subject to Section 9, be amended from time to time)
and in the Restated Certificate of Incorporation of this Corporation.

         13.     Headings. The headings of the various sections and subsections
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.

                                       17
<PAGE>   57
         FURTHER RESOLVED, that the appropriate officers of this Corporation
are hereby authorized to execute and acknowledge a certificate setting forth
these resolutions and to cause such certificate to be filed and recorded, in
accordance with the requirements of Section 151(g) of the General Corporation
Law of the State of Delaware."


                               /s/ FRED A VIERRA
                                 Fred A. Vierra
                            Executive Vice President

                                       18
<PAGE>   58

                               STATE OF DELAWARE

                       OFFICE OF THE SECRETARY OF STATE                 PAGE 1

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

         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
CORRECTION OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE
TWENTY-SECOND DAY OF AUGUST, A.D. 1994, AT 9 O'CLOCK A.M.




                                      [SEAL]
                                                   /s/ Edward J. Freel
                                             Edward J. Freel, Secretary Of State

                                             AUTHENTICATION: 7278684
                                             DATE:  10-24-94

2371729  8100

944202094
<PAGE>   59
                                                           STATE OF DELAWARE
                                                          SECRETARY OF STATE
                                                       DIVISION OF CORPORATIONS
                                                       FILED 09:00 AM 08/22/1994
                                                          944156379 - 2371729

                           CERTIFICATE OF CORRECTION
                        Filed pursuant to Section 103(f)
                    of the Delaware General Corporation Law
                               with respect to a

                           CERTIFICATE OF DESIGNATION
                                       of

                           TELE-COMMUNICATIONS, INC.

         Whereas, on August 4, 1994, Tele-Communications, Inc. (the
"Corporation") filed with the Delaware Secretary of State a Certificate of
Designation (the "Certificate of Designation") authorizing the issuance of a
series of preferred stock of the Corporation designated "Convertible Preferred
Stock, Series C;"

         Whereas, such Certificate of Designation inaccurately stated that the
par value of the Convertible Preferred Stock, Series C, is $1.00 per share,
when in fact the par value of the Convertible Preferred Stock, Series C, is
S.01 per share;

         Therefore, the Certificate of Designation is hereby corrected in
accordance with the provisions of Section 103(f) of the Delaware General
Corporation Law as follows:

         1. The words "par value $l.00 per share" shall be deleted from the
third line of the second (unnumbered) paragraph of the Certificate of
Designation and the words "par value S.01 per share" shall be substituted in
their place.

         2. The words "par value $1.00 per share" shall be deleted from
paragraph number 1 of the Certificate of Designation and the words "par value
$.O1 per share" shall be substituted in their place.

         Executed on the date set forth below by the undersigned duly
authorized officer of the Corporation.

Date:  August 16, 1994
                                                Signature:  /s/ Stephen M. Brett
                                                             Stephen M. Brett

                                                Title:  Executive Vice President
<PAGE>   60
                              State of Delaware

                       Office of the Secretary of State                   PAGE 1

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


         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE
ELEVENTH DAY OF OCTOBER, A.D. 1994, AT 4 O'CLOCK P.M.

         A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT
COUNTY RECORDER OF DEEDS FOR RECORDING.












                               (SEAL)     /s/ Edward J. Freel
                                         ------------------------------------
                                          Edward J. Freel, Secretary of State

                                          AUTHENTICATION: 7265951

2371729  8100                                       DATE: 10-12-94

944192934

<PAGE>   61
                                                          STATE OF DELAWARE
                                                         SECRETARY OF STATE
                                                      DIVISION OF CORPORATIONS
                                                     FILED 04:00 PM 10/11/1994
                                                        944192934 - 2371729



                          TELE-COMMUNICATIONS, INC.

                          CERTIFICATE OF DESIGNATION


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

                     SETTING FORTH A COPY OF A RESOLUTION
                    CREATING AND AUTHORIZING THE ISSUANCE
                  OF A SERIES OF PREFERRED STOCK DESIGNATED
                 AS "REDEEMABLE CONVERTIBLE PREFERRED STOCK,
                 SERIES E" ADOPTED BY THE BOARD OF DIRECTORS
                         OF TELE-COMMUNICATIONS, INC.

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

         The undersigned Executive Vice President of Tele-Communications, Inc.,
a Delaware corporation (the "Corporation"), hereby certifies that the Board of
Directors duly adopted the following resolutions creating a series of preferred
stock designated as "Redeemable Convertible Preferred Stock, Series E":

         BE IT RESOLVED, that pursuant to authority expressly granted by the
provisions of Article IV, Section D of the Restated Certificate of
Incorporation of the Corporation, the Board of Directors hereby creates and
authorizes the issuance of a series of preferred stock, par value $.01 per
share, of the Corporation, to consist of 400,000 shares, and hereby fixes the
designations, dividend rights, voting powers, rights on liquidation, conversion
rights, redemption rights and other preferences and relative, particiating,
optional or other special rights and the qualifications, limitations or
restrictions of the shares of such series (in addition to the designations,
preferences and relative, participating, limitations or restrictions thereof
set forth in the Restated Certificate of Incorporation that are applicable to
preferred stock of all series) as follows:

         1.   Designation.  The designation of the series of preferred stock,
par value $1.00 per share, of the Corporation authorized hereby is "Redeemable
Convertible Preferred Stock, Series E" (the "Series E Preferred Stock").

         2.   Certain Definitions.  Unless the context otherwise requires, the
terms defined in this paragraph 2 shall have, for all purposes, the meanings
herein specified;

         "Amendment Date" shall mean the date of the effectiveness under
applicable law of a duly approved amendment to the Corporation's Restated
Certificate of Incorporation 




<PAGE>   62
increasing the number of shares of capital stock and the number of shares of
capital stock designated as "Class A Common Stock" to an amount which, after
giving effect to the exercise, exchange or conversion of all Convertible
Securities then outstanding and the conversion of all shares of Class B Common
Stock then outstanding into shares of Class A Common Stock, would be sufficient
to permit the conversion, at the then applicable Conversion Rate, of all shares
of Series E Preferred Stock then outstanding into shares of Class A Common
Stock.

         "Average Quoted Price", when used with respect to the Class A Common
Stock, shall mean the average of the Quoted Prices of the Class A Common Stock
for the most recent period of five trading days on which shares of such class
trade ending three Business Days prior to the Redemption Date, appropriately
adjusted to take into account the actual occurrence, during the period
following the first of such five trading days and ending on the Business Day
immediately preceding such Special Redemption Date, of any event of a type
described in paragraph 7. The "Quoted Price" of a share of Class A Common Stock
on any day means the last sale price (or, if no sale price is reported, the
average of the high and low bid prices) of the Class A Common Stock, on such
day as reported on the National Association of Securities Dealers, Inc.
Automated Quotation System, or if the Class A Common Stock is listed on an
exchange, as reported in the composite transactions for the principal exchange
on which such stock is listed.

         "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 Denver, Colorado are not required to be
open.

         "Capital stock shall mean any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock.

         "Certificate" shall mean the Restated Certificate of Incorporation of
the Corporation, as it may from time to time hereafter be amended or restated.

         "Class A Common Stock" shall mean the Class A Common Stock, par value
$1.00 per share, of the Corporation, which term shall include, where
appropriate, in the case of any reclassification, recapitalization or other
change in the Class A Common Stock, or in the case of a consolidation or merger
of the Corporation with or into another Person affecting the Class A Common
Stock, such capital stock to which a holder of Class A Common Stock shall be
entitled upon the occurrence of such event.

         "Class A Preferred Stock shall mean the Class A Preferred Stock, par
value $.01 per share, of the Corporation.




                                      -2-
<PAGE>   63
         "C[ass B Common Stock" shall mean the Class B Common Stock, par value
$1.00 per share, of the Corporation, which term shall include, where
appropriate, in the case of any reclassification, recapitalization or other
change in the Class B Common Stock, or in the case of a consolidation or merger
of the Corporation with or into another Person affecting the Class B Common
Stock, such capital stock to which a holder of Class B Common Stock shall be
entitled upon the occurrence of such event.

         "Class B Preferred Stock" shall mean the Class B 6% Cumulative
Redeemable Exchangeable Junior Preferred Stock, par value $.O1 per share, of
the Corporation.

         "Convertible Securities" shall mean securities, other than the Class B
Common Stock, that are convertible into or exchangeable for Class A Common
Stock.

         "Dividend Payment Date" shall mean, for any Dividend Period, the last
day of such Dividend Period which shall be the first day of March of each year,
commencing with March 1, 1995, 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 and
including the first Dividend Payment Date and each annual period between
consecutive Dividend Payment Dates.

         "Issue Date" shall mean the date on which shares of Series E Preferred
Stock are first issued.

         "Junior Stock" shall mean (i) the Class A Common Stock, (ii) the Class
B Common Stock, (iii) the Class B Preferred Stock, (iv) any other class or
series of capital stock, whether now existing or hereafter created, of the
Corporation, other than (A) the Series E Preferred Stock, (B) any class or
series of Parity Stock (except to the extent provided under clause (v) hereof)
and (C) any Senior Stock, and (v) any class or series of Parity Stock to the
extent that it ranks junior to the Series E Preferred Stock as to dividend
rights, rights of redemption or rights on liquidation, as the case may be. For
purposes of clause (v) above, a class or series of Parity Stock shall rank
junior to the Series E Preferred Stock as to dividend rights, rights of
redemption or rights on liquidation if the holders of shares of Series E
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.

         "Liquidation Preference" measured per share of the Series E Preferred
Stock as of any date in question (the "Determination Date") shall mean an
amount equal to the sum of (a) the Stated Liquidation Value of such share, plus
(b) an amount equal to all dividends accrued on such share which pursuant to
paragraph 3(b) have been added to and remain a part of the Liquidation
Preference as of the Determination Date, plus (c) for purposes of determining
the amounts payable pursuant to paragraph 4 and paragraph 5 and the definition
of Redemption Price, an amount equal to all unpaid dividends accrued on such
share during the period from the immediately preceding Dividend Payment Date
(or the Issue Date if the Determination Date is




                                      -3-
<PAGE>   64
on or prior to the first Dividend Payment Date) through and including the
Determination Date, and, in the case of clauses (b) and (c) hereof, whether or
not such unpaid dividends have been earned or declared or there are any
unrestricted funds of the Corporation legally available for the payment of
dividends. In connection with the determination of the Liquidation Preference
of a share of Series E Preferred Stock upon redemption or upon liquidation,
dissolution or winding up of the Corporation, the Determination Date shall be
the applicable date of redemption or the date of distribution of amounts
payable to stockholders in connection with any such liquidation, dissolution or
winding up.

         "1933 Act" shall mean the Securities Act of 1933, as amended.

         "Officers' Certificate" shall mean a certificate signed by the
Chairman of the Board or the President of the Corporation and by the Treasurer
of the Corporation.

         "Opinion of Counsel" shall mean a written opinion from legal counsel
selected by the Corporation. The counsel may be an employee of or counsel to
the Corporation.

         "Parity Stock" shall mean any class or series of capital stock,
whether now existing or hereafter created, of the Corporation ranking on a
parity basis with the Series E Preferred Stock as to dividend rights, rights of
redemption or rights on liquidation. Capital stock of any class or series shall
rank on a parity as to dividend rights, rights of redemption or rights on
liquidation with the Series E 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 different from
those of the Series E 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 Series
E Preferred Stock. No class or series of capital stock that ranks junior to the
Series E Preferred Stock as to rights on liquidation shall rank or be deemed to
rank on a parity basis with the Series E Preferred Stock as to dividend rights
or rights of redemption, unless the instrument creating or evidencing such
class or series of capita[ stock otherwise expressly provides.

         "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
government or agency or political subdivision thereof, or other entity, whether
acting in an individual, fiduciary, or other capacity.

         "Record Date" for the dividends payable on any Dividend Payment Date
means the fifteenth day of the month preceding the month during which such
Dividend Payment Date shall occur, or if any such day is not a Business Day,
then on the next preceding Business Day, as and if designated by the Board of
Directors.




                                      -4-
<PAGE>   65
         "Redemption Date" as to any share of Series E Preferred Stock shall
mean the date fixed for redemption of such share pursuant to paragraph 5(a),
provided that no such date will be a Redemption Date unless the applicable
Redemption Price is actually paid in full on such date.

         "Redemption Price" as to any share of Series E Preferred Stock which
is to be redeemed on any Redemption Date shall mean the Liquidation Preference
thereof on such Redemption Date.

         "Senior Stock" shall mean any class or series of capital stock,
whether now existing or hereafter created, of the Corporation ranking prior to
the Series E 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 Series E 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
Series E Preferred Stock.  No class or series of capital stock that ranks on a
parity basis with or junior to the Series E Preferred Stock as to rights on
liquidation shall rank or be deemed to rank prior to the Series E 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 Series
E Preferred Stock, unless the instrument creating or evidencing such class or
series of capital stock otherwise expressly provides.

         "Share" shall mean one share of Series E Preferred Stock of the
Corporation.

         "Special Record Date" has the meaning ascribed to such term in
paragraph 3(b).

         "Stated Liquidation Value" of a share of Series E Preferred Stock
means $22,303.

         "Subsidiary" of any Person 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 such Person
and/or one or more Subsidiaries of such Person and (ii) any other Person (other
than a corporation) in which such Person and/or one or more Subsidiaries of
such Person, directly or indirectly, has (x) a majority ownership interest or
(y) the power to elect or direct the election of a majority of the members of
the governing body of such first-named Person.

         "TCI Holder" shall mean the Corporation and each Subsidiary of the
Corporation.

         3.      Dividends.

                          (a)     Dividends Rights; Dividend Payment Dates.
Subject to the prior preferences and other rights of any Senior Stock and the
provisions of Paragraph 6 hereof, the holders of Series E Preferred Stock shall
be entitled to receive, when and as declared by the




                                      -5-
<PAGE>   66
Board of Directors, out of unrestricted funds legally available therefor,
cumulative dividends, in preference to dividends on any Junior Stock, that
shall accrue on each share of Series E Preferred Stock at the rate of 5.0% per
annum of the Stated Liquidation Value of such share from the Issue Date to and
including the date on which the Liquidation Preference of such share is made
available (whether on liquidation, dissolution, or winding up of the
Corporation or, in the case of paragraph 5, upon the applicable Redemption
Date). Accrued dividends on the Series E Preferred Stock will be payable, as
provided in paragraph 3(c) below, annually on each Dividend Payment Date to the
holders of record of the Series E Preferred Stock as of the close of business
on the Record Date for such dividend payment. Dividends shall be fully
cumulative and shall accrue (without interest or compounding) on a daily basis
without regard to the occurrence of a Dividend Payment Date and whether or not
such dividends are declared and whether or not there are any unrestricted funds
of the Corporation legally available for the payment of dividends. The amount
of dividends "accrued" as of the first Dividend Payment Date and as of any date
that is not a Dividend Payment Date shall be calculated on the basis of the
foregoing rate per annum for the actual number of 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 and including the date as of which such
determination is to be made, based on a 365- or 366-day year, as the case may
be.

                          (b)     SPECIAL RECORD DATE. On each Dividend Payment
Date, all dividends that have accrued on each share of Series E Preferred Stock
during the immediately preceding Dividend Period shall, to the extent not paid
as provided in paragraph 3(c) below on such Dividend Payment Date for any
reason (whether or not such unpaid dividends have been earned or declared or
there are any unrestricted funds of the Corporation legally available for the
payment of dividends), be added to the Liquidation Preference of such share and
will remain a part thereof until such dividends are paid as provided in
paragraph 3(c) below. No interest or additional dividends will accrue or be
payable with respect to any dividend payment on the Series E Preferred Stock
that may be in arrears or with respect to that portion of any other payment on
the Series E Preferred Stock that is in arrears which consist of accumulated or
accrued and unpaid dividends. Such accumulated or accrued and unpaid dividends
may be declared and paid at any time (subject to the rights of any Senior Stock
and, if applicable, to the concurrent satisfaction of any dividend arrearages
then existing with respect to any Parity Stock which ranks on a parity basis
with the Series E Preferred Stock as to the payment of dividends) without
reference to any regular Dividend Payment Date, to holders of record as of the
close of business on such date, not more than 45 days nor less than 10 days
preceding the payment date thereof, as may be fixed by the Board of Directors
(the "Special Record Date"). Notice of each Special Record Date shall be given,
not more than 45 days nor less than of days prior thereto, to the holders of
record of the shares of Series E Preferred Stock.

                          (c)     METHOD OF PAYMENT. AlI dividends payable with
respect to the shares of Series E Preferred Stock shall be declared and paid in
cash. All dividends paid with respect to the shares of Series E Preferred Stock
pursuant to this paragraph 3 shall be paid pro rata to all the holders of
shares of Series E Preferred Stock outstanding on the applicable Record Date or
Special Record Date, as the case may be.




                                      -6-
<PAGE>   67
         4.      Distributions Upon Liquidation Dissolution or Winding Up.

                 Subject to the prior payment in full of the preferential
amounts to which any Senior Stock is entitled, in the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary, or
involuntary, the holders of Series E Preferred Stock shall be entitled to
receive from the assets of the Corporation available for distribution to
stockholders, before any payment or distribution, shall be made to the holders
of any Junior Stock, an amount in cash or property, at its fair market value, as
determined by the Board of Directors in good faith, or a combination thereof,
per share, equal to the Liquidation Preference of a share of Series E Preferred
Stock as of the date of payment or distribution, which payment or distribution
shall be made pari passu with any such payment or distribution made to the
holders of any Parity Stock ranking on a parity basis with the Series E
Preferred Stock with respect to distributions upon liquidation, dissolution or
winding up of the Corporation. The holders of Series E Preferred Stock shall be
entitled to no other or further distribution of or participation in any
remaining assets of the Corporation after receiving the Liquidation Preference
per share. If, upon distribution of the Corporation's assets in liquidation,
dissolution or winding up, the assets of the Corporation to be distributed
among the holders of the Series E Preferred Stock and to all holders of any
Parity Stock ranking on a parity basis with the Series E Preferred Stock with
respect to distributions upon liquidation, dissolution or winding up shall be
insufficient to permit payment in full to such holders of the respective
preferential amounts to which they are entitled, then the entire assets of the
Corporation to be distributed to holders of the Series E Preferred Stock and
such Parity Stock shall be distributed pro rata to such holders based upon the
aggregate of the full preferential amounts to which the shares of Series E
Preferred Stock and such Parity Stock would otherwise respectively be entitled.
Neither the consolidation or merger of the Corporation with or into any other
corporation or corporations nor the sale, transfer or lease of all or
substantially all of the assets of the Corporation shall itself be deemed to be
a liquidation, dissolution or winding up of the Corporation within the meaning
of this paragraph 4. Notice of the liquidation, dissolution or winding up of
the Corporation shall be given, not less than 20 days prior to the date on
which such liquidation, dissolution or winding up is expected to take place or
become effective, to the holders of record of the shares of Series E Preferred
Stock.

         5.      Redemption.

                 (a)      OPTIONAL REDEMPTION. Subject to the rights of any
Senior Stock and the provisions of paragraph 6, the shares of Series E
Preferred Stock may be redeemed, at the option of the Corporation by the action
of the Board of Directors, in whole or from time to time in part, on any
Business Day occurring after the Issue Date, at the Redemption Price on the
Redemption Date. If less than all outstanding shares of Series E Preferred
Stock are to be redeemed on any Redemption Date, the shares of Series E
Preferred Stock to be redeemed shall be chosen pro rata among all holders of
Series E Preferred Stock. The Corporation shall not be required to register a
transfer of (i) any shares of Series E Preferred Stock for a period of 15 days
next preceding any selection of shares of Series E Preferred Stock to be
redeemed or (ii) any shares of Series E Preferred Stock selected or called for
redemption.




                                      -7-
<PAGE>   68
                 (b)      NOTICE OF REDEMPTION. Notice of redemption shall be
given by or on behalf of the Corporation, not more than 60 days nor less than 30
days prior to the Redemption Date, to the holders of record of the shares of
Series E Preferred Stock to be redeemed; but no defect in such notice or in the
mailing thereof shall affect the validity of the proceedings for the redemption
of any shares of Series E Preferred Stock. In addition to any information
required by law or by the applicable rules of any national securities exchange
or national interdealer quotation system on which the Series E Preferred Stock
may be listed or admitted to trading or quoted, such notice shall set forth the
Redemption Price, the Redemption Date, the number of shares to be redeemed, the
portion of the Redemption Price, if any, which the Corporation has elected to
pay through the issuance of Class A Common Stock and the place which the shares
called for redemption will, upon presentation and surrender of the stock
certificates evidencing such shares, be redeemed. In the event that fewer than
the total number of shares of Series E Preferred Stock represented by a
certificate are redeemed, a new certificate representing the number of
unredeemed shares will be issued to the holder thereof without cost to such
holder.

                 (c)      DEPOSIT OF REDEMPTION PRICE. If notice of any
redemption by the Corporation pursuant to this paragraph 5 shall have been
given as provided in paragraph 5(b) above, and if on or before the Redemption
Date specified in such notice an amount in cash sufficient to redeem in full on
the Redemption Date at the Redemption Price all shares of Series E Preferred
Stock called for redemption shall have been set apart so as to be available for
such purpose and only for such purpose, then effective as of the close of
business on the Redemption Date, the shares of Series E Preferred Stock called
for redemption, notwithstanding that any certificate therefor shall not have
been surrendered for cancellation, shall no longer be deemed outstanding, and
the holders thereof shall cease to be stockholders with respect to such shares
and all rights with respect to such shares shall forthwith cease and terminate,
except the right of the holders thereof to receive the Redemption Price of such
shares, without interest, upon the surrender of certificates representing the
same.

                 (d)      REDEMPTION BY ISSUANCE OF CLASS A COMMON STOCK.
Subject to compliance with the conditions contained in this paragraph 5(d), the
Corporation may elect to pay the Redemption Price (or designated portion
thereof) of the shares of Series E Preferred Stock called for redemption by
issuing to the holder thereof, in respect of his shares to be redeemed, a number
of shares of Class A Common Stock equal to the aggregate Redemption Price (or
designated portion thereof) of such shares divided by the Average Quoted Price
of a share of Class A Common Stock. No fractional shares of Class A Common
Stock or scrip shall be issued upon such redemption. As to any final fraction
of a share of Class A Common Stock that would otherwise be issuable to a holder
upon redemption of his shares of Series E Preferred Stock (determined on the
basis of the total number of such holder's shares of Series E Preferred Stock
in respect of which shares of Class A Common Stock are issuable), the
Corporation shall pay an amount in cash or by its check equal to the same
fraction of the Average Quoted Price of a share of Class A Common Stock.

         The Corporation's right to elect to pay the Redemption Price (or
designated portion thereof) of the shares of Series E preferred Stock through
the issuance of shares of Class A




                                     -8-
<PAGE>   69
Common Stock shall be conditioned upon: (i) the Corporation's having timely
given a Redemption Notice setting forth such election as provided in paragraph
5(b), (ii) the Corporation's having obtained and filed, on or before the
Redemption Date, at the office of the redemption agent for the Series E
Preferred Stock (or with the books of the Corporation if there is no redemption
agent) an Opinion of Counsel to the effect that (A) the shares of Class A
Common Stock to be issued upon such redemption have been duly authorized and,
when issued and delivered in payment of the Redemption Price (or designated
portion thereof) of the shares of Series E Preferred Stock to be redeemed, will
be validly issued, fully paid and non-assessable and free from preemptive
rights, (B) that the issuance and delivery of such shares of Class A Common
Stock upon such redemption of shares of Series E Preferred Stock will not
violate the laws of the state of incorporation of the Corporation and (C),
unless at the time the Redemption Notice is given all shares of the Series E
Preferred Stock are owned by one or more TCI Holders, that the issuance and
delivery of the shares of Class A Common Stock upon such redemption of shares
of Series E Preferred Stock is exempt from the resignation or qualification
requirements of the 1933 Act and applicable state securities laws or, if no
such exemption is available, that the shares of Class A Common Stock to be
issued have been duly registered or qualified under the 1933 Act and such
applicable state securities laws, and (iii) the Corporation's having filed, on
or before the Redemption Date, at the office of such redemption agent (or with
the books of the Corporation if there is no redemption agent), an Officers'
Certificate setting forth the number of shares of Class A Common Stock to be
issued in payment of the Redemption Price (or designated portion thereof) of
each share of Series E Preferred Stock and the method of determining the same
(consistent with the provisions hereof). If the foregoing conditions have not
been satisfied prior to or on the Redemption Date, the Redemption Price for the
shares of Series E Preferred Stock (or portion thereof designated to be paid
in Class A Common Stock) shall be paid in cash.

                 (e)      STATUS OF REDEEMED SHARES. All shares of Series E
Preferred Stock redeemed, exchanged, purchased or otherwise acquired by the
Corporation shall be retired and shall be restored to the status of authorized
and unissued shares of Series Preferred Stock (and may be reissued as part of
another series of the preferred stock of the Corporation, but such shares shall
not be reissued as Series E Preferred Stock).

         6.      Limitations on Dividends and Redemptions.

                 If at any time the Corporation shall have failed to pay, or
declare and set aside the consideration sufficient to pay, full cumulative
dividends for all prior dividend periods on any Parity Stock which by the terms
of the instrument creating or evidencing such Parity Stock is entitled to the
payment of such cumulative dividends prior to the redemption, exchange,
purchase or other acquisition of the Series E Preferred Stock, and until full
cumulative dividends on such Parity Stock for all prior dividend periods are
paid, or declared and the consideration sufficient to pay the same in full is
set aside so as to be available for such purpose and no other purpose, neither
the Corporation nor any Subsidiary thereof shall redeem, exchange, purchase or
otherwise acquire any shares of Series E Preferred Stock, Parity Stock or
Junior Stock, or set aside any money or assets for any such purpose pursuant to
paragraph 5 hereof. a sinking fund or otherwise, unless all then outstanding
shares of Series E Preferred Stock, of such Parity Stock




                                      -9-
<PAGE>   70
and of any other class of series of Parity Stock that by the terms of the
instrument creating or evidencing such Parity Stock is required to be redeemed
under such circumstances are redeemed or exchanged pursuant to the terms hereof
and thereof.

                 If at any time the Corporation shall have failed to pay, or
declare and set aside the consideration sufficient to pay, full cumulative
dividends on the Series E Preferred Stock for all Dividend Periods ending on or
before the immediately preceding Dividend Payment Date, and until full
cumulative dividends on the Series E Preferred Stock for all Dividend Periods
ending on or before the immediately preceding Dividend Payment Date are paid,
or declared and the consideration sufficient to pay the same in full is set
aside so as to be available for such purpose and no other purpose, neither the
Corporation nor any Subsidiary thereof shall redeem, exchange, purchase or
otherwise acquire any shares of Series E Preferred Stock, Parity Stock or
Junior Stock, or set aside any money or assets for any such purpose, pursuant
to paragraph 5 hereof, a sinking fund or otherwise, unless all then outstanding
shares of Series E Preferred Stock and of any other class or series of Parity
Stock that by the terms of the instrument creating or evidencing such Parity
Stock is required to be redeemed under such circumstances are redeemed or
exchanged pursuant to the terms hereof and thereof.

                 If at any time the Corporation shall have failed to pay, or
declare and set aside the consideration sufficient to pay, full cumulative
dividends on the Series E Preferred Stock for all Dividend Periods ending on or
before the immediately preceding Dividend Payment Date, and until full
cumulative dividends on the Series E Preferred Stock for all Dividend Periods
ending on or before the immediately preceding Dividend Payment Date are paid,
or declared and the consideration sufficient to pay the same in full is set
aside for such purpose and no other purpose, the Corporation shall not declare
or pay any dividend on or make any distribution with respect to any Junior
Stock or Parity Stock or set aside any money or assets for any such purpose,
except that the Corporation may declare and pay a dividend on any Parity Stock
ranking on a parity basis with the Series E Preferred Stock with respect to
the right to receive dividend contemporaneously with the declaration and
payment of a dividend on the Series E Preferred Stock, provided that such
dividends are declared and paid pro rata so that the amount of dividends
declared and paid per share of the Series E Preferred Stock and such Parity
Stock shall in all cases bear to each other the same ratio that accumulated and
accrued and unpaid dividends per share on the Series E Preferred Stock and such
Parity Stock bear to each other.

                 If the Corporation shall fail to redeem on any date fixed for
redemption or exchange pursuant to paragraph 5 hereof any shares of Series E
Preferred Stock called for redemption on such date, and until such shares are
redeemed in full, the Corporation shall not redeem or exchange any Parity Stock
or Junior Stock or declare or pay any dividend on or make any distribution
with respect to any Junior Stock, or set aside any money or assets for any such
purpose, and neither the Corporation nor any Subsidiary thereof shall purchase
or otherwise acquire any Series E Preferred Stock, Parity Stock or Junior
Stock, or set aside any money or assets for any such purpose.

                 Neither the Corporation nor any Subsidiary thereof shall
redeem, exchange, purchase or otherwise acquire any Parity Stock or Junior
Stock, or set aside any money or assets




                                     -10-
<PAGE>   71
for any such purpose, if after giving effect to such redemption, exchange,
purchase or other acquisition, the amount (as determined by the Board of
Directors in good faith) that would be available for distribution to the
holders of the Series E Preferred Stock upon liquidation, dissolution or
winding up of the Corporation if such liquidation, dissolution or winding up
were to occur on the date fixed for such redemption, exchange, purchase or
other acquisition of such Parity Stock or Junior Stock would be less than the
aggregate Liquidation Preference as of such date of all shares of Series E
Preferred Stock then outstanding.

                 Nothing contained in the first, fourth or fifth paragraph of
this paragraph 6 shall prevent (i) the payment of dividends on any Junior Stock
solely in shares of Junior Stock 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 (but only in the case of the
first and fifth paragraphs hereof) through the application of the proceeds from
the sale of, shares of Junior Stock; or (ii) the payment of dividends on any
Parity Stock solely in shares of Parity Stock and/or Junior Stock or the
redemption, exchange, purchase or other acquisition of Series E Preferred Stock
or Parity Stock solely in exchange for (together with a cash adjustment for
fractional shares, if any), or (but only in the case of the first and fifth
paragraphs hereof) through the application of the proceeds from the sale of,
shares of Parity Stock and/or Junior Stock.

                 The provisions of the first paragraph of this paragraph 6 are
for the sole benefit of the holders of Series E Preferred Stock and Parity
Stock having the terms described therein and accordingly, at any time when
there are no shares of any such class or series of Parity Stock outstanding or
if the holders of each such 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 such provisions (either generally or in the specific instance), then
the provisions of the first paragraph of this paragraph 6 shall not (to the
extent waived, in the case of any partial waiver) restrict the redemption,
exchange, purchase or other acquisition of any shares of Series E Preferred
Stock, Parity Stock or Junior Stock. All other provisions of this paragraph 6
are for the sole benefit of the holders of Series E Preferred Stock and
accordingly, if the holders of shares of Series E Preferred Stock shall have
waived (as provided in paragraph 9) in whole or in part the benefit of the
applicable provisions, either generally or in the specific instance, such
provision shall not (to the extent of such waiver, in the case of a partial
waiver) restrict the redemption, exchange, purchase or other acquisition of or
declaration, payment or making of any dividends or distributions on the Series
E Preferred Stock, any Parity Stock or any Junior Stock.

         7.      Conversion.

                 (a)      Unless previously called for redemption as provided
in Section 5 hereof, shares of Series E Preferred Stock shall be convertible,
at the option of the holder thereof, at any time subsequent to the Amendment
Date in such manner and upon such terms and conditions as hereinafter provided
in this paragraph 7, into fully paid and non-assessable full shares of Class A
Common Stock. No shares of Class A Common Stock shall be issued in respect of
the conversion of the Series E Preferred Stock after the fifteenth Business
Day (the "Cut-off Date") preceding the date fixed for redemption; provided that
the conversion of Shares




                                     -11-
<PAGE>   72
surrendered for conversion in accordance with paragraph 7 after the Cut-off
Date shall be given effect as of the date of such surrender if the Redemption
Price to be paid, or to be irrevocably set apart in trust for the benefit of
the holders of Shares to be so redeemed, has not been paid or so set apart on
or before such date fixed for redemption. In case cash, securities or property
other than Class A Common Stock shall be payable, deliverable or issuable upon
conversion as provided herein, then all references to Class A Common Stock in
this paragraph 7 shall be deemed to apply, so far as appropriate and as nearly
as may be, to such cash, property or other securities.

                 (b)      Subject to the provisions for adjustment hereinafter
set forth in this paragraph 7, the Series E Preferred Stock may be converted
into Class A Common Stock at the initial conversion rate of 1,000 fully paid
and non-assessable shares of Class A Common Stock for one share of the Series
E Preferred Stock. (This conversion rate as from time to time adjusted
cumulatively pursuant to the provisions of this paragraph is hereinafter
referred to as the "Conversion Rate").

                 (c)      In case after the Issue Date the Corporation shall
(i) pay a dividend or make a distribution on its outstanding shares of Class A
Common Stock in shares of its capital block or capital stock of any Subsidiary,
(ii) subdivide the then outstanding shares of Class A Common Stock into a
greater number of shares of Class A Common Stock, (iii) combine the then
outstanding shares of Class A Common Stock into a smaller number of shares of
Class A Common Stock, or (iv) issue by reclassification of its shares of Class
A Common Stock any shares of any other class of capital stock of the
Corporation (including any such reclassification in connection with a merger in
which the Corporation is the continuing corporation), then the Conversation
Rate in effect immediately prior to the opening of business on the record date
for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted so that the holder of each
share of the Series E Preferred Stock thereafter surrendered for conversion
shall be entitled to receive the number and kind of shares of capital stock of
the Corporation (or capital stock of a Subsidiary) that such holder would have
owned or been entitled to receive immediately following such action had such
shares of Series E Preferred Stock been converted immediately prior to such
time. An adjustment made pursuant to this paragraph 7(c) for a dividend or
distribution shall become effective immediately after the record date for the
dividend or distribution and an adjustment made pursuant to this paragraph 7(c)
for a subdivision, combination or classification shall become effective
immediately after the effective date of the subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any action
listed above shall be taken.

                 (d)      In case the Corporation shall after the Issue Date
issue any rights or warrants to all holders of shares of Class A Common Stock
entitling them (for a period expiring within 45 days after the record date for
the determination of stockholders entitled to receive such rights or warrants)
to subscribe for or purchase shares of Class A Common Stock (or Convertible
Securities) at a price per share of Class A Common Stock (or having an initial
exercise price or conversion price per share of Class A Common Stock) less than
the then current market price per share of Class A Common Stock (as determined
in accordance with the provisions of paragraph 7(f) below) on such record date,
the number of shares of Class A




                                     -12-
<PAGE>   73
Common Stock into which each Share shall thereafter be convertible shall be
determined by multiplying the number of shares of Class A Common Stock into
which such Share was theretofore convertible immediately prior to such record
date by a fraction of which the numerator shall be the number of shares of
Class A Common Stock outstanding on such record date plus the number of
additional shares of Class A Common Stock offered for subscription or purchase
(or into which the Convertible Securities so offered are initially
convertible) and of which the denominator shall be the number of shares of
Class A Common Stock outstanding on such record date plus the number of shares
of Class A Common Stock which the aggregate offering price of the total number
of shares of Class A Common Stock so offered (or the aggregate initial
conversion or exercise price of the Convertible Securities so offered) would
purchase at the then current market price per share of Class A Common Stock (as
determined in accordance with the provisions of paragraph 7(f) below) on such
record date. Such adjustment shall be made successively whenever any such
rights or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
rights or warrants. In the event that all of the shares of Class A Common Stock
(or all of the Convertible Securities) subject to such rights or warrants have
not been issued when such rights or warrants expire (or, in the case of rights
or warrants to purchase Convertible Securities which have been exercised, all
of the shares of Class A Common Stock issuable upon conversion of such
Convertible Securities have not been issued prior to the expiration of the
conversion right thereof), then the Conversion Rate shall be readjusted
retroactively to be the Conversion Rate which would then be in effect had the
adjustment upon the issuance of such rights or warrants been made on the basis
of the actual number of shares of Class A Common Stock (or Convertible
Securities) issued upon the exercise of such right or warrants (or the
conversion of such Convertible Securities); but such subsequent adjustment
shall not affect the number of shares of Class A Common Stock issued upon the
conversion of any Share prior to the date such subsequent adjustment is made.

                 (e)      In case the Corporation shall distribute after the
Issue Date to all holders of shares of Class A Common Stock (including any such
distribution made in connection with a merger in which the Corporation is the
continuing corporation, other than a merger to which paragraph 7(g) is
applicable) any securities, evidences of its indebtedness or assets (other than
cash dividends out of earnings since the Issue Date (determined without regard
to gains on the sale of significant capital assets) or capital stock in respect
of which an adjustment is made pursuant to paragraph 7(c) hereof) or rights or
warrants to purchase shares of Class A Common Stock or Class B Common Stock or
securities convertible into shares of Class A Common Stock or Class B Common
Stock (excluding those referred to in paragraph 7(d) above), then in each such
case the number of shares of Class A Common Stock into which each Share shall
thereafter be convertible shall be determined by multiplying the number of
shares of Class A Common Stock into which such Share was theretofore
convertible immediately prior to the record date for the determination of
stockholders entitled to receive the distribution by a fraction of which the
numerator shall be the then current market price per share of Class A Common
Stock (as determined accordance with the provisions of paragraph 7(f) below) on
such record date and of which the denominator shall be such current market
price per share of Class A Common Stock less the fair market value on such
record date (as determined by the Board of Directors of the Corporation whose
determination shall be conclusive) of the portion of the securities, assets or




                                     -13-
<PAGE>   74
evidences of indebtedness or rights and warrants so to be distributed
applicable to one share of Class A Common Stock. Such adjustment shall be made
successively whenever any such distribution is made and shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such distribution.

                 (f)      For the purpose of any computation under paragraph
7(d), (e) or (k), the current market price per share of Class A Common Stock at
any date shall be deemed to be the average of the daily closing prices for a
share of Class A Common Stock for the ten (10) consecutive trading days before
the day in question. The closing price for each day shall be the last reported
sale price regular way or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular way, in
either case on the composite tape, or if the shares of Class A Common Stock are
not quoted on the composite tape, on the principal United States securities
exchange registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") on which the shares of Class A Common Stock are listed or
admitted to trading, or if they are not listed or admitted to trading on any
such exchange, the last reported sale price (or the average of the quoted
closing bid and asked prices if there were no reported sales) as reported by
the National Association of Securities Dealers Automated Quotation System
("NASDAQ") or any comparable system, or if the Class A Common Stock is not
quoted on NASDAQ or any comparable system, the average of the closing bid and
asked prices as furnished by any member of the National Association of
Securities Dealers, Inc. selected from time to time by the Corporation for that
purpose or, in the absence of such quotations, such other method of determining
market value as the Board of Directors shall from time to time deem to be fair.

                 (g)      In case of any reclassification or change in the
Class A Common Stock (other than any reclassification or change referred to in
paragraph 7(c) and other than a change in par value) or in case of any
consolidation of the Corporation with any other corporation or any merger of
the Corporation into another corporation or of another corporation into the
Corporation (other than a merger in which the Corporation is the continuing
corporation and which does not result in any reclassification or change (other
than a change in par value or any reclassification or change to which paragraph
7(c) is applicable) in the outstanding Class A Common Stock), or in case of any
sale or transfer to another corporation or entity (other than by mortgage or
pledge) of all or substantially all of the properties and assets of the
Corporation, in any such case after the Issue Date, the Corporation (or its
successor in such consolidation or merger) or the purchaser of such properties
and assets shall make appropriate provision so that the holder of a Share shall
have the right thereafter to convert such Share into the kind and amount of
shares of stock and other securities and property that such holder would have
owned immediately after such reclassification, change, consolidation, merger,
sale or transfer if such holder had converted such Share into Class A Common
Stock immediately prior to the effective date of such reclassification, change,
consolidation, merger, sale or transfer (assuming for this purpose (to the
extent applicable) that such holder failed to exercise any, rights of election
and received per share of Class A Common Stock the kind and amount of shares of
stock and other securities and property received per share by a plurality of
the non-electing shares), and the holders of the Series E Preferred Stock shall
have no other conversion rights under these provisions; provided, that
effective provision shall be made, in the Articles or Certificate of




                                     -14-
<PAGE>   75
Incorporation of the resulting or surviving corporation or otherwise or in any
contracts of sale or transfer, so that the provisions set forth herein for the
protection of the conversion rights of the Series E Preferred Stock shall
thereafter be made applicable, as nearly as reasonably may be to any such other
shares of stock and other securities and property deliverable upon conversion
of the Series E Preferred Stock remaining outstanding or other convertible
preferred stock or other Convertible Securities received by the holders of
Series E Preferred Stock in place thereof; and provided, further, that any such
resulting or surviving corporation or purchaser shall expressly assume the
obligation to deliver, upon the exercise of the conversion privilege, such
shares, securities or property as the holders of the Series E Preferred Stock
remaining outstanding or other convertible preferred stock or other
convertible securities received by the holders in place thereof, shall be
entitled to receive pursuant to the provisions hereof, and to make provisions
for the protection of the conversion rights as above provided.

                 (h)      Whenever the Conversion Rate or the conversion
privilege shall be adjusted as provided in paragraphs 7(c), (d), (e) or (g),
the Corporation shall promptly cause a notice to be mailed to the holders of
record of the Series E Preferred Stock describing the nature of the event
requiring such adjustment, the Conversion Rate in effect immediately thereafter
and the kind and amount of stock or other securities or property into which the
Series E Preferred Stock shall be convertible after such event. Where
appropriate, such notice may be given in advance and included as a part of a
notice required to be mailed under the provisions of paragraph 7(j).

                 (i)      The Corporation may, but shall not be required to,
make any adjustment of the Conversion Rate if such adjustment would require an
increase or decrease of less than 1% in such Conversion Rate; provided however,
that any adjustments which by reason of this paragraph 7(i) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this paragraph 7 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. In any case
in which this paragraph 7(i) shall require that an adjustment shall become
effective immediately after a record date for such event, the Corporation may
defer until the occurrence of such event (x) issuing to the holder of any
shares of Series E Preferred Stock converted after such record date and before
the occurrence of such event the additional shares of Class A Common Stock or
other capital stock issuable upon such conversion by reason of the adjustment
required by such event over and above the shares of Class A Common Stock, or
other capital stock issuable upon such conversion before giving effect to such
adjustment and (y) paying to such holder cash in lieu of any fractional
interest to which such holder is entitled pursuant to paragraph 7(n); provided,
however, that, if requested by such holder, 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 Class A Common Stock or other
capital stock, and such cash, upon the occurrence of the event requiring such
adjustment.

                 (j)      In case at any time:

                          (i)     the Corporation shall take any action which
         would require an adjustment in the Conversion Rate pursuant to this
         paragraph;




                                     -15-
<PAGE>   76
                          (ii)    there shall be any capital reorganization or
         reclassification of the Class A Common Stock (other than a change in
         par value), or any consolidation or merger to which the Corporation is
         a party and for which approval of any shareholders of the Corporation
         is required, or any sale, transfer or lease of all or substantially
         all of the properties and assets of the Corporation, or a tender offer
         for shares of Class A Common Stock representing, together with any
         shares of Class B Common Stock tendered for in such tender offer, at
         least a majority of the total voting power represented by the
         outstanding shares of Class A Common Stock and Class B Common Stock
         which has been recommended by the Board of Directors as being in the
         best interests of the holders of Class A Common Stock; or

                          (iii)   there shall be a voluntary or involuntary
         dissolution, liquidation or winding up of the Corporation;

then, in any such event, the Corporation shall give written notice, in the
manner provided in paragraph 5 hereof, to the holders of the Series E Preferred
Stock at their respective addresses as the same appear on the books of the
Corporation, at least twenty days (or ten days in the case of a recommended
tender offer as specified in clause (ii) above) prior to any record date for
such action, dividend or distribution or the date as of which it is expected
that holders of Class A Common Stock of record shall be entitled to exchange
their shares of Class A Common Stock for securities or other property, if any,
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, transfer, lease, tender offer, dissolution, liquidation or winding up;
provided, however, that any notice required by any event described in clause
(ii) of this paragraph 7(j) shall be given in the manner and at the time that
such notice is given to the holders of Class A Common Stock. Without limiting
the obligations of the Corporation to provide notice of corporate actions
hereunder, the failure to give the notice required by this paragraph 7(j) or
any defect therein shall not affect the legality or validity of any such
corporate action of the Corporation or the vote upon such action.

                 (k)      Before any holder of Series E Preferred Stock shall
be entitled to convert the same in Class A Common Stock, such holder shall
surrender the certificate or certificates for such Series E Preferred Stock at
the office of the Corporation or at the office of the transfer agent for the
Series E Preferred Stock, which certificate or certificates, if the Corporation
shall so request, shall be duly endorsed to the Corporation or in blank or
accompanied by proper instruments of transfer to the Corporation or in blank
(such endorsements or instruments of transfer to be in form satisfactory to the
Corporation), and shall give written notice to the Corporation at said office
that such holder elects to convert all or a part of the Shares represented by
said certificate or certificates in accordance with the terms of this paragraph
7, and shall state in writing therein the name or names in which such holder
wishes the certificates for Class A Common Stock to be issued. Every such
notice of election to convert shall constitute a contract between the holder of
such Series E Preferred Stock and the Corporation, whereby the holder of such
Series E Preferred Stock shall be deemed to subscribe for the amount of Class A
Common Stock which such holder shall be entitled to receive upon




                                     -16-
<PAGE>   77
conversion of the number of shares of Series E Preferred Stock to be converted,
and, in satisfaction of such subscription, to deposit the shares of Series E
Preferred Stock to be converted, and thereby the Corporation shall be deemed to
agree that the surrender of the shares of Series E Preferred Stock to be
converted shall constitute full payment of such subscription for Class A Common
Stock to be issued upon such conversion. The Corporation will as soon as
practicable after such deposit of a certificate or certificates for Series E
Preferred Stock, accompanied by the written notice and the statement above
prescribed, issue and deliver at the office of the Corporation or of said
transfer agent to the person for whose account such Series E Preferred Stock
was so surrendered, or to his nominee(s) or, subject to compliance with
applicable law, transferee(s), a certificate or certificates for the number of
full shares of Class A Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share as hereinafter provided.
If surrendered certificates for Series E Preferred Stock are converted only in
part, the Corporation will issue and deliver to the holder, or to his
nominee(s), without charge therefor, a new certificate or certificates
representing the aggregate of the unconverted Shares. Such conversion shall be
deemed to have been made as of the date of such surrender of the Series E
Preferred Stock to be converted; and the person or persons entitled to receive
the Class A Common Stock issuable upon conversion of such Series E Preferred
Stock shall be treated for all purposes as the record holder or holders of such
Class A Common Stock on such date.

                 Upon the conversion of any Share, the Corporation shall pay,
to the holder of record of such Share on the immediately preceding Record Date,
all accrued but unpaid dividends on such Share to the date of the surrender of
such Share for conversion. Such payment shall be made in cash or, at the
election of the Corporation, the issuance of certificates representing such
number of shares of Class A Common Stock as have an aggregate current market
price (as determined in accordance with paragraph 7(f)) on the date of issuance
equal to the amount of such accrued but unpaid dividends. Upon the making of
such payment to the person entitled thereto as determined pursuant to the first
sentence of this paragraph, no further dividends shall accrue on such Share or
to be payable to any other person.

                 The issuance of certificates for shares of Class A Common
Stock upon conversion of shares of Series E Preferred Stock shall be made
without charge for any issue, stamp or other similar tax in respect of such
issuance, provided, however, if any such certificate is to be issued in a name
other than that of the registered holder of the share or shares of Series E
Preferred Stock converted, the person or persons requesting the issuance
thereof shall pay to the Corporation the amount of any tax which may be payable
in respect of any transfer involved in such issuance or shall establish to the
satisfaction of the Corporation that such tax has been paid.

                 The Corporation shall not be required to convert any shares of
Series E Preferred Stock, and no surrender of Series E Preferred Stock shall be
effective for that purpose, while the stock transfer books of the Corporation
are closed for any purpose; but the surrender of Series E Preferred Stock for
conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if
the conversion had been made on the date such Series E Preferred Stock was
surrendered.




                                     -17-
<PAGE>   78
                 (l)      Promptly following the Amendment Date the Corporation
shall reserve and keep available at all times thereafter, solely for the
purpose of issuance upon conversion of the outstanding shares of Series E
Preferred Stock, such number of shares of Class A Common Stock as shall be
issuable upon the conversion of all outstanding Shares, provided that nothing
contained herein shall be construed to preclude the Corporation from satisfying
its obligations in respect of the conversion of the outstanding shares of
Series E Preferred Stock by delivery of shares of Class A Common Stock which
are held in the treasury of the Corporation. Promptly following the Amendment
Date, the Corporation shall take all such corporate and other actions as from
time to time may be necessary to insure that all shares of Class A Common
Stock issuable upon conversion of shares of Series E Preferred Stock at the
Conversion Rate in effect from time to time will, upon issue, be duly and
validly authorized and issued, fully paid and nonassessable and free of any
preemptive or similar rights.

                 (m)      All shares of Series E Preferred Stock received by
the Corporation upon conversion thereof into Class A Common Stock shall be
retired and shall be restored to status of authorized and unissued shares of
preferred stock (and may be reissued as part of another series of the preferred
stock of the Corporation), but such shares shall not be reissued as Series E
Preferred Stock

                 (n)      The Corporation shall not be required to issue
fractional shares of Class A Common Stock or scrip upon conversion of the
Series E Preferred Stock. As to any final fraction of a share of Class A Common
Stock which a holder of one or more Shares would otherwise be entitled to
receive upon conversion of such Shares in the same transaction, the Corporation
shall pay a cash adjustment in respect of such final fraction in an amount
equal to the same fraction of the market value of a full share of Class A
Common Stock. For purposes of this paragraph 7(n), the market value of a share
of Class A Common Stock shall be the last reported sale price regular way on
the business day immediately preceding the date of conversion, or, in case no
such reported sale takes place on such day, the average of the reported closing
bid and asked prices regular way on such day, in either case on the composite
tape, or if the shares of Class A Common Stock are not quoted on the composite
tape, on the principal United States securities exchange registered under the
Exchange Act on which the shares of Class A Common Stock are listed or admitted
to trading, or if the shares of Class A Common Stock are not listed or admitted
to trading on any such exchange, the last reported sale price (or the average of
the quoted last reported bid and asked prices if there were no reported sales)
as reported by NASDAQ or any comparable system, or if the Class A Common Stock
is not quoted on NASDAQ or any comparable system, the average of the closing
bid and asked prices as furnished by any member of the National Association of
Securities Dealers, Inc. selected from time to time by the Corporation for that
purpose or, in the absence of such quotations, such other method of determining
market value as the Board of Directors shall from time to time deem to be fair.

                 (o)      If any shares of Class A Common Stock which would be 
issuable upon conversion of Shares require registration with or approval of any
governmental authority before such shares may be issued upon conversion, the
Corporation will in good faith and as expeditiously as possible cause such
shares to be duly registered or approved, as the case may be. The Corporation
will endeavor to list the shares of Class A Common Stock required to be




                                     -18-
<PAGE>   79
delivered upon conversion of Shares prior to such delivery upon the principal
national securities exchange upon which the outstanding, Class A Common Stock
is listed at the time of such delivery.

         8.      Voting

                 (a)      VOTING RIGHTS. The holders of Series E Preferred
Stock shall have no voting rights whatsoever, except as required by law and
except for the voting rights described in this paragraph 8; provided, however,
that the number of authorized shares of Series E Preferred Stock may be
increased or decreased (but not below the number of shares of Series E
Preferred Stock then outstanding) by the affirmative vote of the holders of
at least 66 2/3 of the total voting power of the then outstanding Voting
Securities (as defined in Article V, Section C of the Corporation's Restated
Certificate of Incorporation), voting together as a single class as provided in
Article IX of the Certificate. Without limiting the generality of the
foregoing, no vote or consent of the holders of Series E Preferred Stock shall
be required for (a) the creation of any indebtedness of any kind of the
Corporation (b) the creation or designation of any class or series of Senior
Stock, Parity Stock or Junior Stock, or (c) any amendment to the Certificate
that would increase the number of authorized shares of Preferred Stock or the
number of authorized shares of Series E Preferred Stock or that would decrease
the number of authorized shares of Preferred Stock or the number of authorized
shares of Series E Preferred Stock (but not below the number of shares of
Preferred Stock or Series E Preferred Stock, as the case may be, then
outstanding).

                 (b)      ELECTION OF DIRECTORS. The holders of the Series E
Preferred Stock shall have the right to vote at any annual or special meeting
of stockholders for the purpose of electing directors. Each share of Series E
Preferred Stock shall have one vote for such purpose, and shall vote as a
single class with any other class or series of capital stock of the Corporation
entitled to vote in any general election of directors, unless the instrument
creating or evidencing such class or series of capital stock otherwise
expressly provides.

         9.      Waiver.

                 Any provision which for the benefit of the holders of Series
E Preferred Stock, prohibits, limits or restricts actions by the Corporation,
or imposes obligations on 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 a majority of the number of shares of Series E Preferred
Stock then outstanding (or such greater percentage thereof as may be required
by applicable law or any applicable rules of any national securities exchange
or national interdealer quotation system), either in writing or by vote at an
annual meeting or a meeting called for such purpose at which the holders of
Series E Preferred Stock shall vote as a separate class.




                                     -19-
<PAGE>   80
         10.     Method of Giving Notices.

                 Any notice required or permitted hereby to be given to the
holders of shares of Series E Preferred Stock shall be deemed duly given if
deposited in the United States mail, first class mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of the
Corporation or supplied by him in writing to the Corporation for the purpose
of such notice.

         11.     Exclusion of Other Rights.

                 Except as may otherwise be required by law and except for the
equitable rights and remedies which may otherwise be available to holders of
Series E Preferred Stock, the shares of Series E Preferred Stock shall not have
any designations, preferences, limitations or relative rights other than those
specifically set forth herein.

         12.     Heading of Subdivisions.

                 The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.




                                     -20-
<PAGE>   81
         FURTHER RESOLVED, that the appropriate officers of the Corporation are
hereby authorized to execute and acknowledge a certificate setting forth these
resolutions and to cause such certificate to be filed and recorded, in
accordance with the requirements of Section 151(g) of the General Corporation
Law of the State of Delaware.

         IN WITNESS WHEREOF, the undersigned, duly authorized officer has
executed this certificate on this 11 day of October, 1994.


                                                        /s/ Larry Romrell
                                                Name:   Larry Romrell
                                                Title:  Executive Vice President


Attest:         /s/ Stephen M. Brett
       Name:    Stephen M. Brett
       Title:   Secretary
<PAGE>   82
                               STATE OF DELAWARE
                                                                          PAGE 1
                        OFFICE OF THE SECRETARY OF STATE

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



         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF 
CORRECTION OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE 
TWENTY-FOURTH DAY OF OCTOBER, A.D. 1994, AT 8:30 O'CLOCK A.M.

         A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT
COUNTY RECORDER OF DEEDS FOR RECORDING.





                                             [Seal]

                                                  /s/ Edward J. Freel
                                             Edward J. Freel, Secretary of State

                                    
                                             AUTHENTICATION:   7278574
                                                                                
                                                       DATE:   10-24-94  
                                    
<PAGE>   83
                                                           STATE OF DELAWARE
                                                          SECRETARY OF STATE
                                                       DIVISION OF CORPORATIONS
                                                       FILED 08:30 AM 10/24/1994
                                                         944202081 - 2371729

                           CERTIFICATE OF CORRECTION
                        Filed pursuant to Section 103(f)
                    of the Delaware General Corporation Law
                               with respect to a

                           CERTIFICATE OF DESIGNATION

                                       of

                           TELE-COMMUNICATIONS, INC.


                 Whereas, on October 11, 1994, Tele-Communications, Inc. (the
"Corporation") filed with the Delaware Secretary of State a Certificate of
Designation (the "Certificate of Designation") authorizing the issuance of a
series of preferred stock of the Corporation designated "Redeemable Convertible
Preferred Stock, Series E;"

                 Whereas, such Certificate of Designation inaccurately stated
that the par value of the Redeemable Convertible Preferred Stock, Series E, is
$1.00 per share, when in fact the par value of the Redeemable Convertible
Preferred Stock, Series E, is $.01 per share;

                 Therefore, the Certificate of Designation is hereby corrected
in accordance with the provisions of Section 103(f) of the Delaware General
Corporation Law as follows:

                 1.       The words "par value $1.00 per share" shall be
deleted from paragraph number 1 of the Certificate of Designation and the words
"par value $.01 per share" shall be substituted in their place.

                 Executed on the date set forth below by the undersigned duly
authorized officer of the Corporation.

Date:    October 21, 1994               Signature:       /s/ Stephen M. Brett
                                                  Name:    Stephen M. Brett
                                                  Title:   Executive President
                                                             and General Counsel
<PAGE>   84
                               STATE OF DELAWARE
                                                                          PAGE 1
                        OFFICE OF THE SECRETARY OF STATE

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

         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF 
DESIGNATION OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE 
TWENTY-SIXTH DAY OF JANUARY, A.D. 1995, AT 10:55 O'CLOCK A.M.

         A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT
COUNTY RECORDER OF DEEDS FOR RECORDING.




                                       [SEAL]
                                                  /s/ Edward J. Freel
                                             Edward J. Freel, SECRETARY OF STATE

                                             AUTHENTICATION:  7387640
                                             DATE:  01-26-95
                          
<PAGE>   85
                                                           STATE OF DELAWARE
                                                           SECRETARY OF STATE
                                                        DIVISION OF CORPORATIONS
                                                       FILED lO:55 AM 01/26/1995
                                                             950019173 - 2371729

                           TELE-COMMUNICATIONS, INC.

                           CERTIFICATE OF DESIGNATION

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

                      SETTING FORTH A COPY OF A RESOLUTION
                     CREATING AND AUTHORIZING THE ISSUANCE
                   OF A SERIES OF PREFERRED STOCK DESIGNATED
                        AS "CONVERTIBLE PREFERRED STOCK,
                  SERIES D" ADOPTED BY THE BOARD OF DIRECTORS
                          OF TELE-COMMUNICATIONS, INC.

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

         The undersigned Executive Vice President of Tele-Communications, Inc.,
a Delaware corporation (the "Corporation"), hereby certifies that the Board of
Directors duly adopted the following resolutions creating a series of preferred
stock designated as "Convertible Preferred Stock, Series D":

         "BE IT RESOLVED, that, pursuant to authority expressly granted by the
provisions of the Restated Certificate of Incorporation of this Corporation,
the Board of Directors hereby creates and authorizes the issuance of a series
of preferred stock, par value $.01 per share, of this Corporation, to consist
of 1,000,000 shares, and hereby fixes the designations, dividend rights, voting
powers, rights on liquidation and other preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions of the shares of such series (in addition to the
designations, preferences and relative, participating, limitations or
restrictions thereof set forth in the Restated Certificate of Incorporation
that are applicable to preferred stock of all series) as follows:

         1.      Designation. The designation of the series of preferred stock,
par value $.01 per share, of this Corporation authorized hereby is "Convertible
Preferred Stock, Series D" (the "Convertible Preferred Stock").

         2.      Certain Definitions. Unless the context otherwise requires,
the terms defined this Section 2 shall have the meanings herein specified:

         Affiliate: As to any person or, entity, any other person or entity
which. directly or indirectly, controls, or is under common control with, or is
controlled by, such person or entity. As
<PAGE>   86
used in this definition, "control" (including, with its correlative meanings,
"controlling," "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a Person (whether through the ownership
of securities, or partnership or other ownership interest, by contract or
otherwise).

         Board of Directors: The Board of Directors of this Corporation and any
authorized committee thereof.

         Business Day: Any day other than a Saturday, Sunday, or holiday in
which banking institutions in Denver, Colorado, are closed for business.

         Capital Stock: Any and all shares, interests, participations or other
equivalents (however designated) of corporate stock of this Corporation.

         Class A Common Stock: The Class A Common Stock, par value $1.00 per
share, of this Corporation as such exists on the date of this Certificate of
Designation, and Capital Stock of any other class into which such Class A
Common Stock may thereafter have been changed.

         Class B Common Stock: The Class B Common Stock, par value $1.00 per
share, of this Corporation as such exists on the date of this Certificate of
Designation, and Capital Stock of any other class into which such Class B
Common Stock may thereafter have been changed.

         Class B Preferred Stock: The Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock, par value $.01 per share of the
Corporation.

         Class C Preferred Stock: The Convertible Preferred Stock, Series C, 
par value $.01 per share, of the Corporation.

         Class E Preferred Stock: The Convertible Preferred Stock, Series E,
par value $.01 per share, of the Corporation.

         Common Stock: The Class A Common Stock. Class B Common Stock and any
other class of Capital Stock of this Corporation designated as Common Stock.

         Conversion Rate: As defined in Section 5(b).

         Convertible Securities: Securities, other than the Class B Common
Stock, that are convertible into or exchangeable for Class A Common Stock.

         Debt Instrument: Any bond, debenture, note, indenture, guarantee or
other instrument or agreement evidencing any Indebtedness of this Corporation,
whether existing at the Issue Date or thereafter created, incurred, assumed or
guaranteed.

                                       2
<PAGE>   87
         Dividend Payment Date: As defined in Section 3(b).

         Dividend Period: The period from but excluding the First Accrual Date
to and including the first Dividend Payment Date and each six-month period from
but excluding the Dividend Payment Date for the preceding Dividend Period to
and including the Dividend Payment Date for such Dividend Period.

         Exchange Option. As defined in Section 7(a).

         Expiration Date. As defined in Section 7(d).

         First Accrual Date: The Issue Date.

         Indebtedness: Any (i) liability, contingent or otherwise, of this
Corporation (x) for borrowed money whether or not the recourse of the lender is
to the whole of the assets of this Corporation or only to a portion thereof),
(y) evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given other than in connection with the acquisition of
inventory or similar property in the ordinary course of business, or (z) for
the payment of money relating to an obligation under a lease that is required
to be capitalized for financial accounting purposes in accordance with
generally accepted accounting principles; (ii) liability of others described in
the preceeding clause (i) which this Corporation has guaranteed or which is
otherwise its legal liability; (iii) obligations secured by a mortgage, pledge,
lien, charge or other encumbrance to which the property or assets of this
Corporation are subject whether or not the obligations secured thereby shall
have been assumed by or shall otherwise be this Corporation's legal liability;
and (iv) any amendment, renewal, extension or refunding of any liability of the
types referred to in clauses (i), (il) and (iii) above.

         Issue Date: The first date on which any shares of the Convertible
Preferred Stock are first issued or deemed to have been issued.

         Junior Securities: All shares of Common Stock, Class B Preferred Stock
and any other class or series of stock of this Corporation not entitled to
receive any dividends unless all dividends required to have been paid or
declared and set apart for payment on the Convertible Preferred Stock shall
have been so paid or declared and set apart for payment and, for purposes of
Section 4 hereof, any class or series of stock of this Corporation not entitled
to receive any assets upon liquidation, dissolution or winding up of the
affairs of this Corporation until the Convertible Preferred Stock shall have
received the entire amount to which such stock is entitled upon such
liquidation, dissolution or winding up.

         Liquidation Value: Measured per Share of the Convertible Preferred
Stock as of any particular date, the sum of (i) S300 plus (ii) an amount equal
to all dividends accrued on such Share through the Dividend Payment Date
immediately preceding the date on which the Liquidation Value is being
determined, which pursuant to Section 3(c) or (d) have been added to and remain
a part of

                                       3
<PAGE>   88
the Liquidation Value as of such date, plus (iii), for purposes of determining
amounts payable pursuant to Sections 4 and 6 hereof, an amount equal to all
unpaid dividends accrued on the sum of the amounts specified in clauses (i) and
(ii) above to the date as of which the Liquidation Value is being determined.

         Merger Agreement: The Agreement and Plan of Merger, dated as of August
8, 1994 among this Corporation, TCI Communications, Inc. and TeleCable
Corporation.

         Mirror Preferred Stock. As defined in Section 7(c).

         Option Notice. As defined in Section 7(d).

         Parity Securities: Any class or series of stock of this Corporation
entitled to receive payment of dividends on a parity with the Convertible
Preferred Stock or entitled to receive assets upon liquidation, dissolution or
winding up of the affairs of this Corporation on a parity with the Convertible
Preferred Stock. The Class A Preferred Stock, the Class C Preferred Stock and
Class E Preferred Stock rank on a parity basis with the Convertible Preferred
Stock.

         Record Date: For dividends payable on any Dividend Payment Date, the
fifteenth day of the month preceding the month during which such Dividend
Payment Date shall occur.

         Redemption Date: As to any Share, the date fixed for redemption of
such Share as specified in the notice of redemption given in accordance with
Section 6(d), provided that no such date will be a Redemption Date unless the
applicable Redemption Price is actually paid on such date or the consideration
sufficient for the payment thereof, and for no other purpose, has been
irrevocably set apart in trust for the benefit of the holders of Shares to be
redeemed, and if the Redemption Price is not so paid in full or the
consideration sufficient therefor so irrevocably set apart in trust for the
benefit of the holders of Shares to be redeemed, then the Redemption Date will
be the date on which such Redemption Price is fully paid or the consideration
sufficient for the payment thereof, and for no other purpose, has been
irrevocably set apart in trust for the benefit of the holders of Shares to be
redeemed; and provided, further that for purposes of Section 6(c) hereof, the
date fixed for redemption of Shares which are required to be redeemed pursuant
to such Section shall be the Business Day which is 20 Business Days after the
date this Corporation receives the notice referred to in such Section from the
holder of Shares therein specified.

         Redemption Price: As to any Share that is to be redeemed on any
Redemption Date, the Liquidation Value as in effect on such Redemption Date;
provided, however, that for purposes of Section 5(p) hereof (but not Section
5(a) as it may refer to Section 5(p)) and this definition, the date otherwise
fixed for redemption of such Shares shall be deemed the Redemption Date in
respect of such Shares.

         Rights. As defined in Section 7(a).

                                       4
<PAGE>   89
         Senior Securities: Any class or series of stock of this Corporation
ranking senior to the Convertible Preferred Stock in respect of the right to
receive payment of dividends or the right to participate in any distribution
upon liquidation, dissolution or winding up of the affairs of this Corporation.

         Share: As defined in Section 3(a).

         Special Liquidation Value: In respect of any Dividend Payment Date and
Shares, all accrued dividends not paid or irrevocably set apart in trust for
the benefit of the holders of Shares on or before such date.

         Special Securities: Capital Stock (other than Class A Common Stock or
Class B Common Stock) of this Corporation or a Subsidiary thereof which (a) is
common stock of the issuer thereof or (b) participates in one or more business
operations of the issuer thereof in such a manner that if such operations were
owned by a corporation and such Capital Stock were issued thereby such Capital
Stock would be common stock of such corporation.

         Special Record Date: As defined in Section 3(c).

         Subsidiary: With respect to any person or entity, any corporation or
partnership more than 50% of whose outstanding voting securities or partnership
interests, as the case may be, are directly or indirectly owned by such person
or entity.

         Successor Interest: As defined in Section S(g).

         3.      Dividends.

         (a)     Subject to the rights of any Parity Securities with respect to
dividends, the holders of the Convertible Preferred Stock shall be entitled to
receive, and, subject to any prohibition or restriction contained in any Debt
Instrument, this Corporation shall be obligated to pay, but only out of funds
legally available therefor, preferential cumulative cash dividends which shall
accrue as provided herein. Except as otherwise provided in Sections 3(c) or
3(d) hereof, dividends on each share of Convertible Preferred Stock
(hereinafter referred to as a "Share") shall accrue on a daily basis at the
rate of 51/2% per annum of the Liquidation Value to and including the date of
conversion thereof pursuant to Section 5 or the date on which the Liquidation
Value or Redemption Price of such Share is made available pursuant to Section 4
or 6 hereof, respectively. Dividends on the Convertible Preferred Stock shall
accrue as provided herein, whether or not such dividends have been declared and
whether or not there are profits, surplus or other funds of the Corporation
legally or contractually available for the payment of dividends and regardless
of the provisions of any Parity Securities or Debt Instrument.

         (b)     Accrued dividends on the Convertible Preferred Stock shall be
payable semiannually on the first day of each January and July or the
immediately succeeding Business Day.

                                       5
<PAGE>   90
if such first day is not a Business Day (each such payment date being
hereinafter referred to as a "Dividend Payment Date"), commencing on July I,
1995 to the holders of record of the Convertible Preferred Stock as of the
close of business on the applicable Record Date. For purposes of determining
the amount of dividends "accrued" 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 in Section 3(a) for actual days elapsed from but excluding the First
Accrual Date (in the case of any date prior to the first Dividend Payment Date)
or the last preceding Dividend Payment Date in respect of which dividends were
fully paid or irrevocably set apart in trust for the benefit of the holders of
Shares (or shares of Class A Common Stock were issued in respect of the Special
Liquidation Value as provided in Section 5(o) hereof), in the case of any other
date, to and including the date as of which such determination is to be made,
based on a 365-day year.

         (c)     If on any Dividend Payment Date this Corporation pursuant to
applicable law or the terms of any Debt Instrument shall be prohibited or
restricted from paying in cash the full dividends to which holders of the
Convertible Preferred Stock and any Parity Securities shall be entitled, the
amount available for such payment pursuant to applicable law and which is not
restricted by the terms of any Debt Instrument shall be distributed among the
holders of the Convertible Preferred Stock and such Parity Securities ratably
in proportion to the full amounts to which they would otherwise be entitled
except for the issuance of the Class A Common Stock issued in respect of the
partial conversion of Shares pursuant to Section 5(o) hereof. To the extent not
paid on each Dividend Payment Date, all dividends which have accrued on each
Share during the Dividend Period ending on such Dividend Payment Date will be
added cumulatively to the Liquidation Value of such Share and will remain a
part thereof until such dividends are paid. In the event that dividends are
not paid in full on two consecutive Dividend Payment Dates, dividends on that
portion of the Liquidation Value of each Share which consists of accrued
dividends that have theretofore been or thereafter are added to, and remain a
part of, the Liquidation Value in accordance with the preceding sentence shall
accrue cumulatively on a daily basis at the rate of ten percent (10%) per
annum, from and after such second consecutive Dividend Payment Date to and
including the date of conversion of such Share pursuant to Section 5 or the
date on which the Liquidation Value or Redemption Price of such Share is made
available pursuant to Section 4 or 6 hereof, respectively, unless such portion
of the Liquidation Value that consists of accrued unpaid dividends shall be
earlier paid in full. Such portion of the Liquidation Value as consists of
accrued unpaid dividends, may be declared and paid at any time on any Business
Day without reference to any regular Dividend Payment Date, to holders of
record as of the close of business on such date, not more than 50 days nor less
than 10 days preceding the payment date thereof, as may be fixed by the Board
of Directors of this Corporation (the "Special Record Date").

         (d)     In the event that on any date fixed for redemption of Shares
pursuant to Section 6 this Corporation shall fail to pay the Redemption Price
due and payable upon presentation and surrender of the stock certificates
evidencing Shares to be redeemed, then dividends on such Shares shall accrue
cumulatively on a daily basis at the rate of ten percent (10%) per annum of the
Liquidation Value thereof from and after such date fixed for redemption to and
including the date

                                       6
<PAGE>   91
of conversion of such Shares pursuant to Section 5 or the date on which the
Liquidation Value or Redemption Price of such Shares is made available pursuant
to Section 4 or 6 hereof, respectively.

         (e)     Notice of each Special Record Date shall be mailed, in the
manner provided in Section 6(d), to the holders of record of the Convertible
Preferred Stock not less than 15 days prior thereto.

         (f)     As long as any Convertible Preferred Stock shall be 
outstanding, no dividend, whether in cash or property, shall be paid or
declared, nor shall any other distribution be made, on any Junior Security, nor
shall any shares of any Junior Security be purchased, redeemed, or otherwise
acquired for value by this Corporation, unless the holders of the Convertible
Preferred Stock shall have received all dividends to which they are entitled
pursuant to Section 3(a) hereof for all the Dividend Periods preceding the date
on which such dividend on the Junior Securities is to occur, or such dividends
shall have been declared and the consideration sufficient for the payment
thereof irrevocably set apart in trust for the benefit of the holders of Shares
so as to be available for the payment in full thereof and for no other purpose.
The provisions of this Section 3(f) shall not apply (i) to a dividend payable
in any junior Security, or (ii) to the repurchase, redemption or other
acquisition of shares of any Junior Security solely through the issuance of
Junior Securities (together with a cash adjustment for fractional shares, if
any) or through the application of the proceeds from the sale of Junior
Securities. This Corporation shall not permit a Subsidiary thereof to take any
action which this Corporation is prohibited by this Section 3(f) from taking.

         4.  Liquidation. Upon any liquidation, dissolution or winding up of
this Corporation, whether voluntary or involuntary, the holders of Convertible
Preferred Stock shall be entitled to be paid an amount in cash equal to the
aggregate Liquidation Value at the date fixed for liquidation of all Shares
outstanding before any distribution or payment is made upon any Junior
Securities, which payment shall be made pari passu with any such payment made
to the holders of any Parity Securities. The holders of Convertible Preferred
Stock shall be entitled to no other or further distribution of or participation
in any remaining assets of this Corporation after receiving the Liquidation
Value per Share. If upon such liquidation, dissolution or winding up, the
assets of this Corporation to be distributed among the holders of Convertible
Preferred Stock and to all holders of Parity Securities are insufficient to
permit payment in full to such holders of the aggregate preferential amounts
which they are entitled to be paid, then the entire assets of this Corporation
to be distributed to such holders shall be distributed ratably among them based
upon the full preferential amounts to which the shares of Convertible Preferred
Stock and such Parity Securities would otherwise respectively be entitled. Upon
any such liquidation, dissolution or winding up, after the holders of
Convertible Preferred Stock and Parity Securities have been paid in full the
amounts to which they are entitled, the remaining assets of this Corporation
may be distributed to holders of Junior Securities. This Corporation shall mail
written notice of such liquidation, dissolution or winding up to each record
holder of Convertible Preferred Stock not less than 30 days prior to the
payment date stated in such written notice. Neither the consolidation or merger
of this Corporation into or with any other corporation or corporations, nor the
sale, transfer or lease by this

                                       7
<PAGE>   92
Corporation of all or any part of its assets, shall be deemed to be a
liquidation, dissolution or winding up of this Corporation within the meaning
of this Section 4.

         5.      Conversion.

         (a)     Unless previously called for, or otherwise subject to,
redemption as provided in Section 6 hereof, the Convertible Preferred Stock may
be converted at any time or from time to time, in such manner and upon such
terms and conditions as hereinafter provided in this Section 5 into fully paid
and non-assessable full shares of Class A Common Stock. No Share of Class A
Common Stock shall be issued in respect of the conversion of the Convertible
Preferred Stock (other than pursuant to Section 5(o) or 5(p) hereof) after the
fifteenth Business Day (the "Cut-off Date") preceding the date fixed for
redemption; provided that the conversion of Shares surrendered for conversion
in accordance with Section 5 after the Cut-off Date shall be given effect as of
the date of such surrender if the Redemption Price to be paid, or to be
irrevocably set apart in trust for the benefit of the holders of Shares to be
so redeemed, has not been paid or so set apart on or before such date fixed for
redemption. In case cash, securities or property other than Class A Common
Stock shall be payable, deliverable or issuable upon conversion as provided
herein, then all references to Class A Common Stock in this Section 5 shall be
deemed to apply, so far as appropriate and as nearly as may be, to such cash,
property or other securities.

         (b)     Subject to the provisions for adjustment hereinafter set forth
in this Section 5, the Convertible Preferred Stock may be converted into Class
A Common Stock at the initial conversion rate of 10 fully paid and
non-assessable shares of Class A Common Stock for one share of the Convertible
Preferred Stock. (This conversion rate as from time to time adjusted
cumulatively pursuant to the provisions of this Section is hereinafter referred
to as the "Conversion Rate").

         (c)     In case after August 8, 1994 this Corporation shall (i) pay a
dividend or make a distribution on its outstanding shares of Class A Common
Stock in shares of its Capital Stock or capital stock of any Subsidiary, (ii)
subdivide the then outstanding shares of Class A Common Stock into a greater
number of shares of Class A Common Stock, (iii) combine the then outstanding
shares of Class A Common Stock into a smaller number of shares of Class A
Common Stock, or (iv) issue by reclassification of its shares of Class A Common
Stock any shares of any other class of Capital Stock of this Corporation
(including any such reclassification in connection with a merger in which this
Corporation is the continuing corporation), then the Conversion Rate in effect
immediately prior to the opening of business on the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be adjusted so that the holder of each share of the
Convertible Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Capital Stock of this
Corporation (or capital stock of a Subsidiary) that such holder would have
owned or been entitled to receive immediately following such action had such
shares of Convertible Preferred Stock been converted immediately prior to such
time. An adjustment made pursuant to this Section 5(c) for a dividend or
distribution shall become effective immediately after the record date for the
dividend or distribution and an adjustment made pursuant

                                       8
<PAGE>   93
to this Section 5(c) for a subdivision, combination or reclassification shall
become effective immediately after the effective date of the subdivision,
combination or reclassification. Such adjustment shall be made successively
whenever any action listed above shall be taken.

         (d)     In case this Corporation shall after August 8, 1994 issue any
rights or warrants to all holders of shares of Class A Common Stock entitling
them (for a period expiring within 45 days after the record date for the
determination of stockholders entitled to receive such rights or warrants) to
subscribe for or purchase shares of Class A Common Stock (or Convertible
Securities) at a price per share of Class A Common Stock (or having an initial
exercise price or conversion price per share of Class A Common Stock) less than
the then current market price per share of Class A Common Stock (as determined
in accordance with the provisions of Section 5(f) below) on such record date,
the number of shares of Class A Common Stock into which each Share shall
thereafter be convertible shall be determined by multiplying the number of
shares of Class A Common Stock into which such Share was theretofore
convertible immediately prior to such record date by a fraction of which the
numerator shall be the number of shares of Class A Common Stock outstanding on
such record date plus the number of additional shares of Class A Common Stock
offered for subscription or purchase (or into which the Convertible Securities
so offered are initially convertible) and of which the denominator shall be the
number of shares of Class A Common Stock outstanding on such record date plus
the number of shares of Class A Common Stock which the aggregate offering price
of the total number of shares of Class A Common Stock so offered (or the
aggregate initial conversion or exercise price of the Convertible Securities so
offered) would purchase at the then current market price per share of Class A
Common Stock (as determined in accordance with the provisions of Section 5(f)
below) on such record date. Such adjustment shall be made successively whenever
any such rights or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such rights or warrants. In the event that all of the shares of Class A Common
Stock (or all of the Convertible Securities) subject to such rights or warrants
have not been issued when such rights or warrants expire (or, in the case of
rights or warrants to purchase Convertible Securities which have been
exercised, all of the shares of Class A Common Stock issuable upon conversion
of such Convertible Securities have not been issued prior to the expiration of
the conversion right thereof), then the Conversion Rate shall be readjusted
retroactively to be the Conversion Rate which would then be in effect had the
adjustment upon the issuance of such rights or warrants been made on the basis
of the actual number of shares of Class A Common Stock (or Convertible
Securities) issued upon the exercise of such rights or warrants (or the
conversion of such Convertible Securities); but such subsequent adjustment
shall not affect the number of shares of Class A Common Stock issued upon the
conversion of any Share prior to the date such subsequent adjustment is made.

         (e)     In case this Corporation shall distribute after August 8, 1994
to all holders of shares of Class A Common Stock (including any such
distribution made in connection with a merger in which this Corporation is the
continuing corporation, other than a merger to which Section 5(g) is
applicable) any securities, evidences of its indebtedness or assets (other than
cash dividends out of earnings since July 1, 1994 (determined without regard to
gains on the sale of significant capital assets) or Capital Stock in respect of
which an adjustment is made pursuant to Section 5(c) hereof)

                                       9
<PAGE>   94
or rights or warrants to purchase shares of Class A Common Stock or Class B
Common Stock or securities convertible into shares of Class A Common Stock or
Class B Common Stock (excluding those referred to in Section 5(d) above), then
in each such case the number of shares of Class A Common Stock into which each
Share shall thereafter be convertible shall be determined by multiplying the
number of shares of Class A Common Stock into which such Share was theretofore
convertible immediately prior to the record date for the determination of
stockholders entitled to receive the distribution by a fraction of which the
numerator shall be the then current market price per share of Class A Common
Stock (as determined in accordance with the provisions of Section 5(f) below)
on such record date and of which the denominator shall be such current market
price per share of Class A Common Stock less the fair market value on such
record date (as determined by the Board of Directors of this Corporation, whose
determination shall be conclusive) of the portion of the securities, assets or
evidences of indebtedness or rights and warrants so to be distributed
applicable to one share of Class A Common Stock. Such adjustment shall be made
successively whenever any such distribution is made and shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such distribution.

         (f)     For the purpose of any computation under Section 5(d), (e),
(k), (o) or (p) or Section 7, the current market price per share of Class A
Common Stock at any date shall be deemed to be the average of the daily closing
prices for a share of Class A Common Stock for the ten (10) consecutive
trading days before the day in question. The closing price for each day shall
be the last reported sale price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the composite tape, or if the shares of
Class A Common Stock are not quoted on the composite tape, on the principal
United States securities exchange registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on which the shares of Class A Common
Stock are listed or admitted to trading, or if they are not listed or admitted
to trading on any such exchange, the last reported sale price (or the average
of the quoted closing bid and asked prices if there were no reported sales) as
reported by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or any comparable system, or if the Class A Common Stock is
not quoted on NASDAQ or any comparable system, the average of the closing bid
and asked prices as furnished by any member of the National Association of
Securities Dealers, Inc. selected from time to time by this Corporation for
that purpose or, in the absence of such quotations, such other method of
determining market value as the Board of Directors shall from time to time deem
to be fair.

         (g)     In case of any reclassification or change in the Class A
Common Stock (other than any reclassification or change referred to in Section
5(c) and other than a change in par value) or in case of any consolidation of
this Corporation with any other corporation or any merger of this Corporation
into another corporation or of another corporation into this Corporation (other
than a merger in which this Corporation is the continuing corporation and which
does not result in any reclassificaiion or change (other than a change in par
value or any reclassification or change to which Section 5(c) is applicable) in
the outstanding Class A Common Stock), or in case of any sale or transfer to
another corporation or entity (other than by mortgage or pledge) of all or
substantially all of the properties and assets of this Corporation, in any
such case after August 8, 1994, this

                                       10
<PAGE>   95
Corporation (or its successor in such consolidation or merger) or the purchaser
of such properties and assets shall make appropriate provision so that the
holder of a Share shall have the right thereafter to convert such Share into
the kind and amount of shares of stock and other securities and property (a
"Successor Interest") that such holder would have owned immediately after such
reclassification, change, consolidation, merger, sale or transfer if such
holder had converted such Share into Class A Common Stock immediately prior to
the effective date of such reclassification, change, consolidation, merger,
sale or transfer (assuming for this purpose (to the extent applicable) that
such holder failed to exercise any rights of election and received per share of
Class A Common Stock the kind and amount of shares of stock and other
securities and property received per share by a plurality of the non-electing
shares), and the holders of the Convertible Preferred Stock shall have no other
conversion rights under these provisions (other than pursuant to Section 5(o)
or 5(p) hereof, provided that upon any conversion effected pursuant to Section
5(o) or 5(p) after any event to which this Section 5(g) is applicable,
references in Section 5(o) and 5(o) to Class A Common Stock shall be deemed to
be references to Successor Interests); provided, that effective provision shall
be made, in the Articles or Certificate of Incorporation of the resulting or
surviving corporation or otherwise or in any contracts of sale or transfer, so
that the provisions set forth herein for the protection of the conversion
rights of the Convertible Preferred Stock shall thereafter be made applicable,
as nearly as reasonably may be to any such other shares of stock and other
securities and property deliverable upon conversion of the Convertible
Preferred Stock remaining outstanding or other convertible preferred stock or
other Convertible Securities received by the holders of Convertible Preferred
Stock in place thereof; and provided, further, that any such resulting or
surviving corporation or purchaser shall expressly assume the obligation to
deliver, upon the exercise of the conversion privilege, such shares, securities
or property as the holders of the Convertible Preferred Stock remaining
outstanding, or other convertible preferred stock or other convertible
securities received by the holders in place thereof, shall be entitled to
receive pursuant to the provisions hereof, and to make provisions for the
protection of the conversion rights as above provided.

         (h)     Whenever the Conversion Rate or the conversion privilege shall
be adjusted as provided in Sections 5(c), (d), (e) or (g), this Corporation
shall promptly cause a notice to be mailed to the holders of record of the
Convertible Preferred Stock describing the nature of the event requiring such
adjustment, the Conversion Rate in effect immediately thereafter and the kind
and amount of stock or other securities or property into which the Convcrtible
Preferred Stock shall be convertible after such event. Where appropriate, such
notice may be given in advance and included as a part of a notice required to
be mailed under the provisions of Section 5(j).

         (i)     This Corporation may, but shall not be required to, make any
adjustment of the Conversion Rate if such adjustment would require an increase
or decrease of less than 1% in such Conversion Rate; provided, however, that
any adjustments which by reason of this Section 5(i) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 5 shall be made to the nearest
cent or the nearest 1/100th of share, as the case may be. In any case in which
this Section 5(i) shall require that an adjustment shall become effective
immediately after a record date for such event, the Corporation

                                       11
<PAGE>   96
may defer until the occurrence of such event (x) issuing to the holder of any
shares of Convertible Preferred Stock converted after such record date and
before the occurrence of such event the additional shares of Class A Common
Stock or other Capital Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the shares of Class A Common
Stock, or other Capital Stock issuable upon such conversion before giving
effect to such adjustment and (y) paying to such holder cash in lieu of any
fractional interest to which such holder is entitled pursuant to Section 5(n);
provided, however, that, if requested by such holder, this Corporation shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares of Class A Common Stock
or other Capita] Stock, and such cash, upon the occurrence of the event
requiring such adjustment.

         (j)     In case at any time:

                 (i)      this Corporation shall take any action which would
         require an adjustment in the Conversion Rate pursuant to this Section;

                 (ii)     there shall be any capital reorganization or
         reclassification of the Class A Common Stock (other than a change in
         par value), or any consolidation or merger to which the Corporation is
         a party and for which approval of any shareholders of this Corporation
         is required, or any sale, transfer or lease of all or substantially
         all of the properties and assets of the Corporation, or a tender offer
         for shares of Class A Common Stock representing, together with any
         shares of Class B Common Stock tendered for in such tender offer, at
         least a majority of the total voting power represented by the
         outstanding shares of Class A Common Stock and Class B Common Stock
         which has been recommended by the Board of Directors as being in the
         best interests of the holders of Class A Common Stock; or

                 (iii)    there shall be a voluntary or involuntary 
         dissolution, liquidation or winding up of this Corporation;

then, in any such event, this Corporation shall give written notice, in the
manner provided in Section 6(d) hereof, to the holders of the Convertible
Preferred Stock at their respective addresses as the same appear on the books
of the Corporation, at least twenty days (or ten days in the case of a
recommended tender offer as specified in clause (ii) above) prior to any record
date for such action, dividend or distribution or the date as of which it is
expected that holders of Class A Common Stock of record shall be entitled to
exchange their shares of Class A Common Stock for securities or other property,
if any, deliverable upon such reorganization, reclassification, consolidation,
merger, sale, transfer, lease, tender offer, dissolution, liquidation or
winding up; provided, however, that any notice required by any event described
in clause (ii) of this Section 5(j) shall be given in the manner and at the
time that such notice is given to the holders of Class A Common Stock. Without
limiting



                                       12
<PAGE>   97
the obligations of this Corporation to provide notice of corporate actions
hereunder, the failure to give the notice required by this Section 5(j) or any
defect therein shall not affect the legality or validity of any such corporate
action of the Corporation or the vote upon such action.

         (k)     Before any holder of Convertible Preferred Stock shall be 
entitled to convert the same into Class A Common Stock (other than pursuant to
Section 5(o) hereof but including pursuant to Section 5(p) hereof), such holder
shall surrender the certificate or certificates for such Convertible Preferred
Stock at the office of this Corporation or at the office of the transfer agent
for the Convertible Preferred Stock, which certificate or certificates, if this
Corporation shall so request, shall be duly endorsed to this Corporation or in
blank or accompanied by proper instruments of transfer to this Corporation or
in blank (such endorsements or instruments of transfer to be in form
satisfactory to this Corporation), and shall give written notice to this
Corporation at said office that such holder elects to convert all or a part of
the Shares represented by said certificate or certificates in accordance with
the terms of this Section 5 (and in the case of a conversion pursuant to
Section 5(p) hereof, specifying that such conversion is made pursuant to
Section 5(p) hereof), and shall state in writing therein the name or names in
which such holder wishes the certificates for Class A Common Stock to be
issued. Every such notice of election to convert shall constitute a contract
between the holder of such Convertible Preferred Stock and this Corporation,
whereby the holder of such Convertible Preferred Stock shall be deemed to
subscribe for the amount of Class A Common Stock which such holder shall be    
entitled to receive upon conversion of the number of shares of Convertible
Preferred Stock to be converted, and, in satisfaction of such subscription, to
deposit the shares of Convertible Preferred Stock to be converted, and thereby
this Corporation shall be deemed to agree that the surrender of the shares of
Convertible Preferred Stock to be converted shall constitute full payment of
such subscription for Class A Common Stock to be issued upon such conversion.
This Corporation will as soon as practicable after such deposit of a
certificate or certificates for Convertible Preferred Stock, accompanied by the
written notice and the statement above prescribed, or on the Dividend Payment
Date described in Section 5(o) hereof as contemplated in such Section, issue and
deliver at the office of this Corporation or of said transfer agent to the
person for whose account such Convertible Preferred Stock was so surrendered,
or to his nominee(s) or, subject to compliance with applicable law,
transferee(s), or the holders of Convertible Preferred Stock on the Record Date
in respect of the Dividend Payment Date described in Section 5(o) hereof, a
certificate or certificates for the number of full shares of Class A Common
Stock to which such holder shall be entitled, together with cash in lieu of any
fraction of a share as hereinafter provided. If surrendered certificates for
Convertible Preferred Stock are converted only in part, this Corporation will
issue and deliver to the holder, or to his nominee(s), without charge therefor,
a new certificate or certificates representing the aggregate of the unconverted
Shares. Such conversion shall be deemed to have been made as of the date of
such surrender of the Convertible Preferred Stock to be converted or on such
Dividend Payment Date described in Section 5(o) hereof, as the case may be; and
the person or persons entitled to receive the Class A Common Stock issuable
upon conversion of such Convertible Preferred Stock shall be treated for all
purposes as the record holder or holders of such Class A Common Stock on such
date.

                                       13
<PAGE>   98
         Upon the conversion of any Share (other than pursuant to Section 5(o)
or 5(p) hereof), this Corporation shall pay, to the holder of record of such
Share on the immediately preceding Record Date, if such date is after the most
recent Dividend Payment Date, or otherwise to the holder of record of such
Share as of the date of conversion, all accrued but unpaid dividends on such
Share to the date of the surrender of such Share for conversion. Such payment
shall be made in cash or, at the election of this Corporation, the issuance of
certificates representing such number of shares of Class A Common Stock as have
an aggregate current market price (as determined in accordance with Section
5(f)) on the date of issuance equal to the amount of such accrued but unpaid
dividends. Upon the making of such payment to the person entitled thereto as
determined pursuant to the first sentence of this paragraph, no further
dividends shall accrue on such Share or be payable to any other person.

         The issuance of certificates for shares of Class A Common Stock upon
conversion of shares of Convertible Preferred Stock shall be made without
charge for any issue, stamp or other similar tax in respect of such issuance,
provided, however, if any such certificate is to be issued in a name other than
that of the registered holder of the share or shares of Converuble Preferred
Stock converted, the person or persons requesting the issuance thereof shall
pay to this Corporation the amount of any tax which may be payable in respect
of any transfer involved in such issuance or shall establish to the
satisfaction of this Corporation that such tax has been paid.

         Except for conversion pursuant to Section 5(o) or 5(p) hereof, this
Corporation shall not be required to convert any shares of Convertible
Preferred Stock, and no surrender of Convertible Preferred Stock shall be
effective for that purpose, while the stock transfer books of this Corporation
are closed for any purpose; but the surrender of Convertible Preferred Stock
for conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if
the conversion had been made on the date such Convertible Preferred Stock was
surrendered.

         (l)     This Corporation shall at all times reserve and keep
available, solely for the purpose of issuance upon conversion of the
outstanding shares of Convertible Preferred Stock, such number of shares of
Class A Common Stock as shall be issuable upon the conversion of all
outstanding Shares, provided that nothing contained herein shall be construed
to preclude this Corporation from satisfying its obligations in respect of the
conversion of the outstanding shares of Convertible Preferred Stock by delivery
of shares of Class A Common Stock which are held in the treasury of this
Corporation. This Corporation shall take all such corporate and other actions
as from time to time may be necessary to insure that aII shares of Class A
Common Stock issuable upon conversion of shares of Convertible Preferred Stock
al the Conversion Rate in effect from time to time will, upon issue, be duly
and validly authorized and issued, fully paid and nonassessable and free of any
preemptive or similar rights.

         (m)     All shares of Convertible Preferred Stock received by this
Corporation upon conversion thereof into Class A Common Stock shall be retired
and shall be restored to the status of authorized and unissued shares of
preferred stock (and may be reissued as part of another series


                                      14
<PAGE>   99
of the preferred stock of this Corporation, but such shares shall not be
reissued as Convertible Preferred Stock).

         (n)     This Corporation shall not be required to issue fractional
shares of Class A Common Stock or scrip upon conversion of the Convertible
Preferred Stock. As to any final fraction of a share of Class A Common Stock
which a holder of one or more Shares would otherwise be entitled to receive
upon conversion of such Shares in the same transaction, this Corporation shall
pay a cash adjustment in respect of such final fraction in an amount equal to
the same fraction of the market value of a full share of Class A Common Stock.
For purposes of this Section 5(n), the market value of a share of Class A
Common Stock shall be the last reported sale price regular way on the business
day immediately preceding the date of conversion, or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way on such day, in either case on the composite tape, or if the
shares of Class A Common Stock are not quoted on the composite tape, on the
principal United States securities exchange registered under the Exchange Act
on which the shares of Class A Common Stock are listed or admitted to trading,
or if the shares of Class A Common Stock are not listed or admitted to trading
on any such exchange, the last reported sale price (or the average of the
quoted last reported bid and asked prices if there were no reported sales) as
reported by NASDAQ or any comparable system, or if the Class A Common Stock is
not quoted on NASDAQ or any comparable system, the average of the closing bid
and asked prices as funfished by any member of the National Association
of Securities Dealers, Inc. selected from time to time by this Corporation for
that purpose or, in the absence of such quotations, such other method of
determining market value as the Board of Directors shall from time to time deem
to be fair.

         (o)     To the extent all cash dividends on the Convertible Preferred
Stock which have accrued on any Dividend Payment Date are not paid, or are not
irrevocably set apart in trust for the benefit of the holder of such Shares, on
such date, then each Share shall be deemed to be automatically partially
converted into a number of duly authorized, fully paid and non-assessable
shares of Class A Common Stock equal to the quotient obtained by dividing the
Special Liquidation Value in respect of such Share on such Dividend Payment
Date by 95% of the current market price of the Class A Common Stock on such
date (as determined in accordance with Section 5(f) hereof) and this
Corporation shall issue and deliver to the holder of record of such Share on
the Record Date in respect of such Dividend Payment Date a certificate
evidencing such number of shares of Class A Common Stock and payment in respect
of fractional shares as provided in Section 5(n) hereof. Upon the issuance of
such Class A Common Stock the dividend otherwise accrued on such Dividend
Payment Date shall for all purposes be deemed paid. Partial conversion of
Shares pursuant to this Section 5(o) shall not reduce Liquidation Value (except
for Special Liquidation Value to the extent included in Liquidation Value), or
(except as provided in the immediately preceding sentence) otherwise affect the
right of the holder of such Shares to convert the same pursuant to the other
provisions of this Section 5.

         (p)     If this Corporation fails on any Redemption Date to pay the
Redemption Price in respect of Shares otherwise called for redemption pursuant
to Section 6(a) or (b) hereof or which

                                       15
<PAGE>   100
a holder elects to cause to be redeemed pursuant to Section 6(c) hereof, the
holder of such Shares may, in addition to any other right of conversion herein
contained, convert such Shares into a number of shares of Class A Common Stock
equal to the quotient obtained by dividing such Redemption Price by 95% of the
current market price (determined in accordance with Section 5(f) hereof) on
such Redemption Date. The holder's rights in this Section 5(p) shall be in
addition to any other rights such holder may have in respect of such failure.

         (q)     If any shares of Class A Common Stock which would be issuable
upon conversion of Shares require registration with or approval of any
governmental authority before such shares may be issued upon conversion
(whether or not, in the case of Section 5(o) or 5(p) hereof, any event giving
rise to such issuance has occurred or is likely to occur), this Corporation
will in good faith and as expeditiously as possible cause such shares to be
duly registered or approved, as the case may be. This Corporation will endeavor
to list the shares of Class A Common Stock required to be delivered upon
conversion of Shares prior to such delivery upon the principal national
securities exchange upon which the outstanding Common Stock is listed at the
time of such delivery.

         6.      Redemption.

         (a)     Subject to the provisions of Section 6(g), if at any time
after the third anniversary of the Issue Date the market value per share (as
defined below) of the Class A Common Stock shall have equaled or exceeded
$37.50 (as adjusted for dividends on Class A Common Stock payable in Class A
Common Stock, stock splits and reverse stock splits in respect of the Class A
Common Stock occurring after August 8, 1994) on any 20 out of a period of 30
consecutive Business Days ending within five days prior to the giving of a
notice of redemption pursuant to this Section, the shares of Convertible
Preferred Stock may be redeemed out of funds legally available therefor, at the
option of this Corporation by action of the Board of Directors, in whole or in
part, at the Redemption Price per Share as of the applicable Redemption Date.
If less than all Shares are to be redeemed, Shares shall be redeemed ratably
among the holders thereof. For purposes of this Section, the market values of
the Class A Common Stock shall be the last reported sale price of the Class A
Common Stock on the NASDAQ National Market System (or, if not quoted on the
NASDAQ National Market System, then on such exchange on which the Class A
Common Stock is listed as the Corporation may designate) on each such Business
Day or if there shall not have been a sale on any such Business Day, the market
value for that Business Day shall be the average of the bid and asked
quotations on the NASDAQ National Market System on that Business Day, or, if
the Class A Common Stock shall not then be quoted on the NASDAQ National Market
System or listed on any exchange, the market value shall be the highest bid
quotation in the over-the-counter market on such Business Day as reported by
National Quotation Bureau, Inc. or its successor or such other generally
accepted source of publicly reported bid and asked quotations as the
Corporation may reasonably designate.

         (b)     Subject to the provisions of Section 6(g), the shares of
Convertible Preferred Stock may be redeemed out of funds legally available
therefor, at the option of this Corporation by action of the Board of
Directors, in whole or from time to time in part, at any time after the

                                       16
<PAGE>   101
fifth anniversary of the Issue Date at the Redemption Price per Share as of the
applicable Redemption Date. If less than all outstanding Shares are to be
redeemed, Shares shall be redeemed ratably among the holders thereof.

         (c)     Subject to the rights of any Parity Securities and subject to
any prohibitions or restrictions contained in any Debt Instrument, at any time
on or after the tenth anniversary of the Issue Date, any holder of Shares shall
have the right, at such holder's option, to require redemption by this
Corporation at the Redemption Price per Share as of the applicable Redemption
Date of all or any portion of such holder's Shares having an aggregate
Liquidation Value in excess of $50,000 (or, if all of the Shares held by such
holder have an aggregate Liquidation Value of less than $50,000, all but not
less than all of such Shares) by written notice to this Corporation stating the
number of Shares to be redeemed. This Corporadon shall redeem, out of funds
legally available therefor, the Shares so requested to be redeemed on such date
within 20 Business Days following this Corporation's receipt of such notice;
provided, however, that notwithstanding the provisions of Section 5(p) hereof,
if this Corporation fails on the Redemption Date to pay the Redemption Price in
respect of Shares otherwise subject to redemption pursuant to this Section 6(c)
and fails irrevocably to set apart such Redemption Price in trust for the
benefit of the holders of such Shares, the holder of such Shares shall not
exercise the conversion rights provided for in Section 5(p) for a period of one
year from such date fixed for redemption (the "One-Year Period"); provided,
further, that nothing contained in this Section 6(c) shall (i) affect any other
rights of such holder, including, without limitation, the accrual of dividends
as provided in Section 3 hereof with respect to any Shares in respect of which
the Redemption Price has not been paid or funds irrevocably set apart in trust
for the benefit of the holders of such Shares, (ii) otherwise affect the right
of the holder to convert Shares or (iii) otherwise affect the right of the
holder of any Shares in respect of which the Redemption Price has not been paid
or funds irrevocably set apart in trust for the benefit of the holders of such
Shares to convert the same pursuant to the provisions of Section 5 following the
expiration of the One-Year Period. At any time during the One-Year-Period, this
Corporation may pay, out of funds legally available therefor, ratably among the
holders who have required Shares to be redeemed under this Section 6(c), the
Redemption Price for all or part of such Shares. If the funds of this
Corporation legally available for redemption of Shares are insufficient to
redeem the total number of shares required to be redeemed pursuant to this
Section 6(c), those funds which are legally available for redemption of such
Shares will be used to redeem the maximum possible number of such Shares ratably
among the holders who have required Shares to be redeemed under this Section
6(c). Without limiting the holders' rights pursuant to Section 5(p) hereof. at
any time thereafter when additional funds of this Corporation are legally
available and not so restricted for such purpose, such funds will immediately
be used to redeem the Shares this Corporation failed to redeem on such
Redemption Date (to the extent not previously converted) until the balance of
such Shares are redeemed.

         (d)     Notice of any redemption pursuant to Section 6(a) or 6(b)
shall be mailed, first class, postage prepaid, not less than 30 days nor more
than 60 days prior to the Redemption Date, to the holders of record of the
shares of Convertible Preferred Stock to be redeemed, at their respective
addresses as the same appear upon the books of this Corporation or are supplied

                                       17
<PAGE>   102
by them in writing to this Corporation for the purpose of such notice; but no
failure to mail such notice or any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any shares
of the Convertible Preferred Stock; provided that this sentence shall not
prejudice the right of any holder to receive such damages which may result from
any such defective notice. Such notice shall set forth the Redemption Price, the
Redemption Date, the number of Shares to be redeemed and the place at which the
Shares called for redemption will, upon presentation and surrender of the stock
certificates evidencing such Shares. be redeemed. In case fewer than the total
number of shares of Convertible Preferred Stock represented by any certificate
are redeemed, a new certificate representing the number of unredeemed Shares
will be issued to the holder thereof without cost to such holder.

         (e)     If notice of any redemption by this Corporation pursuant to
this Section 6 shall have been mailed as provided in Section 6(d) and if on or
before the Redemption Date specified in such notice the consideration
necessary for such redemption shall have been irrevocably set apart in trust
for the benefit of the holders of Shares to be so redeemed so as to be
available therefor and only therefor, then on and after the close of business
on the Redemption Date, the Shares called for redemption, notwithstanding that
any certificate therefor shall not have been surrendered for cancellation,
shall no longer be deemed outstanding, and all rights with respect to such
Shares shall forthwith cease and terminate, except the right of the holders
thereof to receive upon surrender of their certificates the consideration
payable upon redemption thereof.

         (f)     All shares of Convertible Preferred Stock redeemed, retired,
purchased or otherwise acquired by this Corporation shall be retired and shall
be restored to the status of authorized and unissued shares of preferred stock
(and may be reissued as part of another series of the preferred stock of this
Corporation, but such shares shall not be reissued as Convertible Preferred
Stock).

         (g)     If at any time this Corporation shall have failed to pay, or
declare and irrevocably set apart in trust for the benefit of the holders of
Shares the consideration sufficient to pay, all dividends accrued up to and
including the immediately preceding Dividend Payment Date on the Convertible
Preferred Stock, and until all dividends accrued up to and including the
immediately preceding Dividend Payment Date on the Convertible Preferred Stock
shall have been paid or declared and irrevocably set apart in trust for the
benefit of the holders of Shares so as to be available for the payment in full
thereof and for no other purpose, this Corporation shall not redeem, pursuant
to a sinking fund or otherwise, any shares of Convertible Preferred Stock,
Parity, Securities or Junior Securities, unless all then outstanding shares of
Convertible Preferred Stock are redeemed, and shall not purchase or otherwise
acquire any shares of Convertible Preferred Stock, Parity Securities or Junior
Securities. If and so long as this Corporation shall fail to redeem on a
Redemption Date pursuant to Section 6(a), (b) and (c) all shares of Convertible
Preferred Stock required to be redeemed on such date, this Corporation shall
not redeem, or discharge any sinking fund obligation with respect to, any
Junior Securities, unless all then outstanding shares of Convertible Preferred
Stock are redeemed, and shall not purchase or otherwise acquire any shares of
Convertible Preferred Stock (other than by way of redemption or

                                       18
<PAGE>   103
conversion) or Junior Securities. Nothing contained in this Section 6(g) shall
prevent the purchase or acquisition of shares of Convertible Preferred Stock
pursuant to a purchase or exchange offer or offers made to holders of all
outstanding shares of Convertible Preferred Stock, provided that as to holders
of all outstanding shares of Convertible Preferred Stock, the terms of the
purchase or exchange offer for all such shares are identical and all accrued
dividends on all Shares have been paid or shall have been paid or declared and
irrevocably set apart in trust for the benefit of holders of Shares so as to be
available for the payment in full thereof and for no other purpose. The
provisions of this Section 6(g) are for the benefit of holders of Convertible
Preferred Stock and accordingly the provisions of this Section 6(g) shall not
restrict any redemption by this Corporation of Shares held by any holder,
provided that all other holders of Shares shall have waived in writing the
benefits of this provision with respect to such redemption. This Corporation
shall not permit any Subsidiary thereof to take any action which this
Corporation is prohibited from taking pursuant to this Section 6(g).

         7.      Exchange Option.

         (a)     In case this Corporation shall at any time distribute to all
holders of the Class A Common Stock any rights or warrants ("Rights") to
subscribe for or purchase Special Securities, each holder of Shares shall have
the option (the "Exchange Option"), in lieu of any adjustment to the Conversion
Rate pursuant to Section 5, to exchange shares of Convertible Preferred Stock
for shaes of Mirror Preferred Stock (as defined below) which shall have an
initial aggregate liquidation value determined as follows:

                 (i)      in the case of Rights exercisable upon payment, in
         whole or in part, of cash or property other than Class A Common Stock,
         the maximum aggregate liquidation value of shares of Mirror Preferred
         Stock issuable to a holder of Convertible Preferred Stock upon
         exercise of the Exchange Option shall be equal to the product of (x)
         the number shares of Special Securities issuable upon exercise of the
         Rights which this Corporation would have distributed to such holder of
         Convertible Preferred Stock had such holder's Shares been converted
         immediately prior to the record date for the distribution of such
         Rights, and (y) the amount of cash, or the fair market value of such
         other property (as reasonably determined by the Board of Directors;
         with respect to any Class A Common Stock that is included in such
         property, the fair market value thereof shall be the current market
         price as determined pursuant to Section 5(f) as of such record date),
         payable by a holder of Class A Common Stock in respect of the purchase
         of any such shares upon exercise of a Right; or

                 (ii)     in the case of Rights exercisable upon the surrender
         of Class A Common Stock without payment of additional

                                       19
<PAGE>   104
         consideration, the maximum aggregate liquidation value of shares of
         Mirror Preferred Stock issuable upon exercise of the Exchange Option
         by the holder thereof shall be equal to the product of (x) the
         Conversion Rate expressed in dollars of Liquidation Value per share of
         Class A Common Stock as in effect on the record date for distribution
         of the Rights, and (y) the maximum number of shares of Class A Common
         Stock that would have been surrendered by such holder upon exercise of
         Rights that would have been distributed to such holder had such holder
         converted his Shares immediately prior to the record date for
         distribution of the Rights.

              (b)     The exercise price of the Exchange Option shall be one 
dollar in Liquidation Value of Shares of Convertible Preferred Stock for each
dollar of liquidation value of shares of Minor Preferred Stock to be purchased
upon exercise of the Exchange Option.

              (c)     "Mirror Preferred Stock" means convertible preferred stock
issued by the issuer of the Special Securities, such Mirror Preferred Stock to
have terms, conditions, designations, dividend rights, voting powers, rights on
liquidation and other preferences and relative, participating, optional or
other special rights, and qualifications, limitations, or restrictions thereof
which are identical, or as nearly so as is practicable in the reasonable
judgment of the Board of Directors, to those of the Convertible Preferred
Stock, except that the running of any time periods pursuant to the terms of
the Convertible Preferred Stock shall be tacked to such time periods in the
Mirror Preferred Stock and except that Mirror Preferred Stock shall be
convertible into shares of the Special Security in respect of which such Mirror
Preferred Stock is issued pursuant to the terms hereof in lieu of Class A
Common Stock. The rate at which Mirror Preferred Stock shall be convertible into
Special Securities, expressed in shares of the Special Security per dollar of
liquidation value of the Mirror Preferred Stock, shall:

                 (i)      in the case of Mirror Preferred Stock issued in
         respect of Rights exercisable upon payment, in whole or in part, of
         cash or property other than Class A Common Stock, be determined by a
         quotient, the numerator of which shall be the number of shares of
         Special Securities issuable upon exercise of the Rights which this
         Corporation would have distributed to all holders of Convertible
         Preferred Stock had all of the Shares been converted immediately prior
         to the record date for the distribution of such Rights and the
         denominator of which shall be equal to the aggregate liquidation value
         of Mirror Preferred Stock issuable (assuming exercise of all the
         Exchange Options) to all holders of Convertible Preferred Stock in
         respect of such Rights pursuant to Section 7(a)(i) above; or

                 (ii)     in the case of Mirror Preferred Stock issued in
         respect of Rights exercisable upon surrender of shares of Class A

                                       20
<PAGE>   105
         Common Stock without payment of additional consideration, be
         determined by the inverse of the product of (x) the Conversion Rate of
         the Convertible Preferred Stock expressed in dollars of Liquidation
         Value per share of Class A Common Stock as in effect immediately prior
         to the record date for distribution of the Rights (without giving
         effect to any antidilution adjustment pursuant to Section 6 in respect
         of such Rights) and (y) the number of shares of Class A Common Stock
         required to be surrendered upon the exercise of each Right.

                 (d)      If this Corporation distributes Rights in respect of
which the holders of Convertible Preferred Stock are required to be granted an
Exchange Option hereunder, this Corporation shall, concurrently with the
distribution of such Rights to holders of Class A Common Stock, provide each
holder of Convertible Preferred Stock a notice (the "Option Notice") stating
that such holder may, on or before the date of expiration of the Rights (the
"Expiration Date"), exercise the Exchange Option in accordance herewith, and
setting forth a description of the Rights, the Special Securities, and the
Mirror Preferred Stock. Such notice shall be accompamed by any prospectus or
similar document provided to holders of Class A Common Stock in respect of the
distribution of the Rights and a copy of the certificate of designations (or
similar document) proposed to be filed by this Corporation or any Subsidiary
with the appropriate government official in order to establish the Mirror
Preferred Stock.

                 (e)      If a transaction described in this Section 7 occurs
before the Issue Date, holders of the Convertible Preferred Stock may exercise
the rights in this Section 7 within 45 days after the Issue Date or, if later,
the date related Rights expire.

                 (f)      Upon the exchange of any Share, this Corporation
shall pay, to the holder of record of such Share on the immediately preceding
Record Date, if such date is after the most recent Dividend Payment Date, or
otherwise, to the holder of record of such Share as of the date of exercise of
the Exchange Option, all accrued but unpaid dividends on such Share to the date
of the surrender of such Share for exchange. Such payment shall be made in cash
or, at the election of this Corporation, the issuance of certificates
representing such number of shares of Class A Common Stock as have an aggregate
current market price (as determined in accordance with Section 5(f)) on the
date of issuance equal to the amount of such accrued but unpaid dividends. Upon
the making of such payment to the person entitled thereto as determined
pursuant to the first sentence of this paragraph, no further dividends shall
accrue on such Share or be payable to any other person.

         8.  No Voting Rights. Except as required by law and Sections 9 and 11
hereof, the holders of the Convertible Preferred Stock shall not be entitled to
vote on any matters submitted to a vote of the holders of the Capital Stock of
this Corporation.

         9.  Amendment. No amendment or modification of the designation,
rights, preferences, and limitations of the Shares set forth herein shall be
binding or effective without the prior consent of the holders of record of
Shares representing 66 2/3 % of the Liquidation Value

                                       21
<PAGE>   106
of all Shares outstanding (excluding, for this purpose, Shares owned by this
Corporation or any of its Affiliates) at the time such action is taken.

         10.  Preemptive Rights. The holders of the Convertible Preferred Stock
will not have any preemptive right to subscribe for or purchase any shares of
stock or any other securities which may be issued by this Corporation, provided
that this Section 10 shall not limit the rights of holders of the Convertible
Preferred Stock pursuant to Sections 5 or 7 hereof.

         11.  Senior Securities. The Convertible Preferred Stock shall not rank
junior to any other classes or series of stock of this Corporation in respect
of the right to receive dividends or the right to participate in any
distribution upon liquidation, dissolution or winding up of this Corporation.
Without the prior consent of the holders of record of Shares representing 
66 2/3% of the Liquidation Value of all Shares then outstanding (excluding, for
this purpose, Shares owned by this Corporation or any of its Affiliates), this
Corporation shall not issue any Senior Securities.

         12.  Exclusion of Other Rights. Except as may otherwise be required by
law and for the equitable rights and remedies that may otherwise be available
to holders of Convertible Preferred Stock, the shares of Convertible Preferred
Stock shall not have any designations, preferences, limitations or relative
rights, other than those specifically set forth in these resolutions (as such
resolutions may, subject to Section 9, be amended from time to time) and in the
Restated Certificate of Incorporation of this Corporation.

         13.  Headings. The headings of the various sections and subsections
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.

         FURTHER RESOLVED, that the appropriate officers of this Corporation are
hereby authorized to execute and acknowledge a certificate setting forth these
resolutions and to cause such certificate to be filed and recorded, in 
accordance with the requirements of Section 151(g) of the General Corporation 
Law of the State of Delaware."


                              /s/ STEPHEN M. BRETT
                                Stephen M. Brett
                            Executive Vice President
 
                                       22
<PAGE>   107
                              STATE OF DELAWARE
                      OFFICE OF THE SECRETARY OF STATE
                                      
                           ------------------------
                                      
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE THIRD DAY
OF AUGUST, A.D. 1995, AT 12:45 O'CLOCK P.M.

A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT COUNTY
RECORDER OF DEEDS FOR RECORDING.



                                                        EDWARD J. FREEL 
                                                  ---------------------------- 
                                                        Edward J. Freel,
                                                       Secretary of State

                                                  AUTHENTICATION: 7596118

                                                  DATE: 08-03-95


<PAGE>   108
                                                          STATE OF DELAWARE
                                                          SECRETARY OF STATE
                                                       DIVISION OF CORPORATIONS
                                                       FILED 12:45 PM 08/03/1995
                                                          950175231 - 2371729


                            CERTIFICATE OF AMENDMENT
                                     TO THE
                     RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                           TELE-COMMUNICATIONS, INC.

         TELE-COMMUNICATIONS, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
         FIRST: That the Restated Certificate of Incorporation of the
Corporation is hereby amended as follows:

(i) THE FIRST PARAGRAPH OF ARTICLE IV OF THE RESTATED CERTIFICATE OF
INCORPORATION OF THE CORPORATION IS HEREBY AMENDED TO READ IN ITS ENTIRETY AS
FOLLOWS:
                               "AUTHORIZED STOCK

         The total number of shares of capital stock which the Corporation
shall have authority to issue is two billion seven hundred seventy-seven
million three hundred seventy-five thousand ninety-six (2,777,375,096) shares,
which shall be divided into the following classes:

                 (a)      Two billion seven hundred twenty-five million
         (2,725,000,000) shares shall be of a class designated Common Stock,
         par value $1.00 per share ("Common Stock"), such class to be divided
         into series as provided in Section E of this Article IV;

                 (b)      Seven hundred thousand (700,000) shares shall be of a
         class designated Class A Preferred Stock, par value $.01 per share
         ("Class A Preferred Stock");

                 (c)      One million six hundred seventy-five thousand
         ninety-six (1,675,096) shares shall be of a class designated Class B
         6% Cumulative Redeemable Exchangeable Junior Preferred Stock, par
         value $.01 per share ("Class B 6% Cumulative Redeemable Exchangeable
         Junior Preferred Stock"); and

                 (d)      Fifty million (50,000,000) shares shall be of a class
         designated Series Preferred Stock, par value $.01 per share ("Series
         Preferred Stock"), such class to be issuable in series as provided in
         Section D of this Article IV.

<PAGE>   109
         The Class A Preferred Stock, the Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock and the Series Preferred Stock are
collectively referred to as "Preferred Stock"."

(ii) SECTION D OF ARTICLE IV OF THE RESTATED CERTIFICATE OF INCORPORATION OF THE
CORPORATION IS HEREBY AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

                                   "SECTION D

                             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. The Board of Directors, 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:

                 (i)      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;

                 (ii)     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;

                 (iii)    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;

                 (iv)     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, 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 shall determine;

                 (v)      the voting rights, if any, of the holders of a
         particular series; and

                 (vi)     the terms and conditions, if any, for the Corporation
         to purchase or redeem shares of a particular series.


                                      -2-
<PAGE>   110

         All shares of any one series of the Series Preferred Stock shall be
alike in every particular. Except to the extent otherwise provided in the
resolution or resolutions providing for the issue of any series of Series
Preferred Stock, the holders of shares of such series shall have no voting
rights except as may be required by the laws of the State of Delaware."

(iii) SECTION E OF ARTICLE IV OF THE RESTATED CERTIFICATE OF INCORPORATION OF
THE CORPORATION IS HEREBY AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

                                   "SECTION E

           SERIES A TCI GROUP COMMON STOCK, SERIES B TCI GROUP COMMON
                STOCK, SERIES A LIBERTY MEDIA GROUP COMMON STOCK
                 AND SERIES B LIBERTY MEDIA GROUP COMMON STOCK

         One billion seven hundred fifty million (1,750,000,000) shares of
Common Stock shall be of a series designated Tele-Communications, Inc. Series A
TCI Group Common Stock (the "Series A TCI Group Common Stock"), one hundred
fifty million (150,000,000) shares of Common Stock shall be of a series
designated Tele-Communications, Inc. Series B TCI Group Common Stock (the
"Series B TCI Group Common Stock"), seven hundred fifty million (750,000,000)
shares of Common Stock shall be of a series designated Tele-Communications,
Inc. Series A Liberty Media Group Common Stock (the "Series A Liberty Media
Group Common Stock") and seventy-five million (75,000,000) shares of Common
Stock shall be of a series designated Tele-Communications, Inc. Series B
Liberty Media Group Common Stock (the "Series B Liberty Media Group Common
Stock").

         Each share of Series A TCI Group Common Stock and each share of Series
B TCI Group Common Stock shall, except as otherwise provided in this Section E,
be identical in all respects and shall have equal rights, powers and
privileges.

         Each share of Series A Liberty Media Group Common Stock and each share
of Series B Liberty Media Group Common Stock shall, except as otherwise
provided in this Section E, be identical in all respects and shall have equal
rights, powers and privileges.

1.       Voting Rights.

         Holders of Series A TCI Group Common Stock shall be entitled to one
vote for each share of such stock held, holders of Series B TCI Group Common
Stock shall be entitled to ten votes for each share of such stock held, holders
of Series A Liberty Media Group Common Stock shall be entitled to one vote for
each share of such stock held and holders of Series B Liberty Media Group
Common Stock shall be entitled to ten votes 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 or, with respect to any class of
Preferred Stock or any series of such a class, in this


                                      -3-
<PAGE>   111
Certificate (including any resolution or resolutions providing for the
establishment of such class or series pursuant to authority vested in the Board
of Directors by this Certificate), the holders of shares of Series A TCI Group
Common Stock, the holders of shares of Series B TCI Group Common Stock, the
holders of shares of Series A Liberty Media Group Common Stock and the holders
of shares of Series B Liberty Media Group Common Stock and the holders of
shares of each class or series of Preferred Stock, if any, entitled to vote
thereon, 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 Common Stock
or any series thereof or of any other class or series of stock or decrease the
number of authorized shares of any 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 Series A TCI Group Common Stock, the holders of shares
of Series B TCI Group Common Stock, the holders of shares of Series A Liberty
Media Group Common Stock, the holders of shares of Series B Liberty Media Group
Common Stock or the holders of shares of any such class or series of Preferred
Stock shall be required for the approval of any such matter.

2.       Conversion Rights.

         (a)     CONVERSION OF SERIES B TCI GROUP COMMON STOCK INTO SERIES A
TCI GROUP COMMON STOCK. Each share of Series B TCI Group Common Stock shall be
convertible, at the option of the holder thereof, into one share of Series A
TCI Group Common Stock. Any such conversion may be effected by any holder of
Series B TCI Group Common Stock by surrendering such holder's certificate or
certificates for the Series B TCI Group Common Stock to be converted, duly
endorsed, at the office of the Corporation or any transfer agent for the Series
B TCI Group Common Stock, together with a written notice to the Corporation at
such office that such holder elects to convert all or a specified number of
shares of Series B TCI Group Common Stock represented by such certificate and
stating the name or names in which such holder desires the certificate or
certificates for Series A TCI Group Common Stock to be issued. If so required
by the Corporation, any certificate for shares surrendered for conversion shall
be accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder of such shares or the duly authorized
representative of such holder. Promptly thereafter, the Corporation shall issue
and deliver to such holder or such holder's nominee or nominees, a certificate
or certificates for the number of shares of Series A TCI Group Common Stock to
which such holder shall be entitled as herein provided. Such conversion shall
be deemed to have been made at the close of business on the date of receipt by
the Corporation or any such transfer agent of the certificate or certificates,
notice and, if required, instruments of transfer referred to above, and the
person or persons entitled to receive the Series A TCI Group Common Stock
issuable on such conversion shall be treated for all purposes as the record
holder or holders of such Series A TCI Group Common Stock on that date. A
number of shares of Series A TCI Group Common Stock equal to the number of
shares of Series B TCI Group Common Stock outstanding from time to time shall
be set aside and reserved for issuance upon conversion of shares of Series B
TCI Group Common Stock. Shares of Series A TCI Group Common Stock shall not be
convertible into shares of Series B TCI Group Common Stock.





                                      -4-
<PAGE>   112
         (b)     CONVERSION OF SERIES B LIBERTY MEDIA GROUP COMMON STOCK INTO
SERIES A LIBERTY MEDIA GROUP COMMON STOCK.  Each share of Series B Liberty
Media Group Common Stock shall be convertible, at the option of the holder
thereof, into one share of Series A Liberty Media Group Common Stock. Any such
conversion may be effected by any holder of Series B Liberty Media Group Common
Stock by surrendering such holder's certificate or certificates for the Series
B Liberty Media Group Common Stock to be converted, duly endorsed, at the
office of the Corporation or any transfer agent for the Series B Liberty Media
Group Common Stock, together with a written notice to the Corporation at such
office that such holder elects to convert all or a specified number of shares
of Series B Liberty Media Group Common Stock represented by such certificate
and stating the name or names in which such holder desires the certificate or
certificates for Series A Liberty Media Group Common Stock to be issued. If so
required by the Corporation, any certificate for shares surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder of such shares or
the duly authorized representative of such holder. Promptly thereafter, the
Corporation shall issue and deliver to such holder or such holder's nominee or
nominees, a certificate or certificates for the number of shares of Series A
Liberty Media Group Common Stock to which such holder shall be entitled as
herein provided. Such conversion shall be deemed to have been made at the close
of business on the date of receipt by the Corporation or any such transfer
agent of the certificate or certificates, notice and, if required, instruments
of transfer referred to above, and the person or persons entitled to receive
the Series A Liberty Media Group Common Stock issuable on such conversion shall
be treated for all purposes as the record holder or holders of such Series A
Liberty Media Group Common Stock on that date. A number of shares of Series A
Liberty Media Group Common Stock equal to the number of shares of Series B
Liberty Media Group Common Stock outstanding from time to time shall be set
aside and reserved for issuance upon conversion of shares of Series B Liberty
Media Group Common Stock. Shares of Series A Liberty Media Group Common Stock
shall not be convertible into shares of Series B Liberty Media Group Common
Stock.

         (c)     CONVERSION OF SERIES A LIBERTY MEDIA GROUP COMMON STOCK INTO
SERIES A TCI GROUP COMMON STOCK AND SERIES B LIBERTY MEDIA GROUP COMMON STOCK
INTO SERIES B TCI GROUP COMMON STOCK AT THE OPTION OF THE CORPORATION. (i) At
the option of the Corporation by action of its Board of Directors, (A) all
shares of Series A Liberty Media Group Common Stock shall be convertible into a
number (or fraction) of fully paid and nonassessable shares of Series A TCI
Group Common Stock equal to the Optional Conversion Ratio, and (B) all shares
of Series B Liberty Media Group Common Stock shall be convertible into a number
(or fraction) of fully paid and nonassessable shares of Series B TCI Group
Common Stock equal to the Optional Conversion Ratio.

         (ii)    For purposes of this paragraph 2(c), the "Optional Conversion
Ratio" shall mean the quotient (calculated to the nearest five decimal places)
obtained by dividing (A) the Liberty Media Group Common Stock Per Share Value
by (B) the average Market Value of one share of Series A TCI Group Common Stock
over the 20-Trading Day period ending on the Trading Day preceding the
Appraisal Date.





                                      -5-
<PAGE>   113
         (iii)   The "Liberty Media Group Private Market Value" shall mean an
amount equal to the private market value of the Liberty Media Group as of the
last day of the calendar month preceding the month in which the last of the two
appraisers referred to in the immediately following sentence are selected (the
last day of such calendar month is hereinafter referred to as the "Appraisal
Date"). In the event that the Corporation determines to establish the Liberty
Media Group Private Market Value, two investment banking firms of recognized
national standing shall be designated to determine the private market value of
the Liberty Media Group, one designated by the Corporation (the "First
Appraiser") and one designated by a committee of the Board of Directors all of
whose members are independent directors as determined under Nasdaq National
Market rules (the "Second Appraiser"). The date upon which the last of such
appraisers is selected is hereinafter referred to as the "Selection Date". Not
later than 20 days after the Selection Date, the First Appraiser and the Second
Appraiser shall each determine its initial view as to the private market value
of the Liberty Media Group as of the Appraisal Date and shall consult with one
another with respect thereto. Not later than the 30th day after the Selection
Date, the First Appraiser and the Second Appraiser shall each have determined
its final view as to such private market value. If the higher of the respective
final views of the First Appraiser and the Second Appraiser as to such private
market value (the "Higher Appraised Amount") is not more than 120% of the lower
of such respective final views (the "Lower Appraised Amount"), the Liberty
Media Group Private Market Value (subject to any adjustment provided in
subparagraph (v) of this paragraph 2(c)) shall be the average of those two
amounts. If the Higher Appraised Amount is more than 120% of the Lower
Appraised Amount, the First Appraiser and the Second Appraiser shall agree upon
and jointly designate a third investment banking firm of recognized national
standing (the "Mutually Designated Appraiser") to determine such private market
value. The Mutually Designated Appraiser shall not be provided with any of the
work of the First Appraiser and Second Appraiser. The Mutually Designated
Appraiser shall, no later than the 20th day after the date the Mutually
Designated Appraiser is designated, determine such private market value (the
"Mutually Appraised Amount"), and the Liberty Media Group Private Market Value
(subject to any adjustment provided in subparagraph (v) of this paragraph 2(c))
shall be (A) if the Mutually Appraised Amount is between the Lower Appraised
Amount and the Higher Appraised Amount, (I) the average of (1) the Mutually
Appraised Amount and (2) the Lower Appraised Amount or the Higher Appraised
Amount, whichever is closer to the Mutually Appraised Amount, or (II) the
Mutually Appraised Amount, if neither the Lower Appraised Amount nor the Higher
Appraised Amount is closer to the Mutually Appraised Amount, or (B) if the
Mutually Appraised Amount is greater than the Higher Appraised Amount or less
than the Lower Appraised Amount, the average of the Higher Appraised Amount and
the Lower Appraised Amount. For these purposes, if any such investment banking
firm expresses its final view of the private market value of the Liberty Media
Group as a range of values, such investment banking firm's final view of such
private market value shall be deemed to be the midpoint of such range of
values.

         (iv)    Each of the investment banking firms referred to in clause
(iii) of this paragraph 2(c) shall be instructed to determine the private
market value of the Liberty Media Group as of the Appraisal Date based upon the
amount a willing purchaser would pay to a willing seller, in an arm's length
transaction, if it were acquiring the Liberty Media Group, as if the Liberty
Media Group were a publicly traded non-controlled corporation and the purchaser
was acquiring all of the capital stock





                                      -6-
<PAGE>   114
of such corporation, and without consideration of any potential regulatory
constraints limiting the potential purchasers of the Liberty Media Group other
than that which would have existed if the Liberty Media Group were a publicly
traded non-controlled entity.

         (v)     Following the determination of the Liberty Media Group Private
Market Value, the investment banking firms whose final views of the private
market value of the Liberty Media Group were used in the calculation of the
Liberty Media Group Private Market Value shall determine the Adjusted
Outstanding Shares of Liberty Media Group Common Stock together with any
further appropriate adjustments to the Liberty Media Group Private Market Value
resulting from such determination. The "Adjusted Outstanding Shares of Liberty
Media Group Common Stock" shall mean a number, as determined by such investment
banking firms as of the Appraisal Date, equal to the sum of the number of
shares of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock outstanding, the Number of Shares Issuable with Respect to
the Inter-Group Interest, the number of Committed Acquisition Shares issuable,
the number of shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock issuable upon the conversion, exercise or
exchange of all Pre-Distribution Convertible Securities and the number of
shares of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock issuable upon the conversion, exercise or exchange of those
Convertible Securities (other than Pre-Distribution Convertible Securities and
other than Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares) the holders of which would
derive an economic benefit from conversion, exercise or exchange of such
Convertible Securities which exceeds the economic benefit of not converting,
exercising or exchanging such Convertible Securities. The "Liberty Media Group
Common Stock Per Share Value" shall mean the quotient obtained by dividing the
Liberty Media Group Private Market Value by the Adjusted Outstanding Shares of
Liberty Media Group Common Stock, provided that if such investment banking
firms do not agree on the determinations provided for in this subparagraph (v),
the Liberty Media Group Common Stock Per Share Value shall be the average of
the quotients so obtained on the basis of the respective determinations of such
firms.

         (vi)    If the Corporation determines to convert shares of Series A
Liberty Media Group Common Stock into Series A TCI Group Common Stock and
shares of Series B Liberty Media Group Common Stock into Series B TCI Group
Common Stock at the Optional Conversion Ratio, such conversion shall occur on a
Conversion Date on or prior to the 120th day following the Appraisal Date. If
the Corporation determines not to undertake such conversion, the Corporation
may at any time thereafter undertake to reestablish the Liberty Media Group
Common Stock Per Share Value as of a subsequent date.

         (vii)   The Corporation shall not convert shares of Series A Liberty
Media Group Common Stock into shares of Series A TCI Group Common Stock without
converting shares of Series B Liberty Media Group Common Stock into shares of
Series B TCI Group Common Stock, and the Corporation shall not convert shares of
Series B Liberty Media Group Common Stock into shares of Series B TCI Group
Common Stock without converting shares of Series A Liberty Media Group Common
Stock into shares of Series A TCI Group Common Stock. The Series A Liberty Media




                                      -7-
<PAGE>   115

Group Common Stock and the Series B Liberty Media Group Common Stock
shall also be convertible at the option of the Corporation in accordance with
paragraph 5(b)(iii) of this Section E.

3.       Dividends.

         (a)     DIVIDENDS ON SERIES A TCI GROUP COMMON STOCK AND SERIES B TCI
GROUP COMMON STOCK. Dividends on the Series A TCI Group Common Stock and the
Series B TCI Group Common Stock may be declared and paid only out of the lesser
of (i) assets of the Corporation legally available therefor and (ii) the TCI
Group Available Dividend Amount. Subject to paragraph 4 of this Section E,
whenever a dividend is paid to the holders of Series A TCI Group Common Stock,
the Corporation shall also pay to the holders of Series B TCI Group Common
Stock a dividend per share equal to the dividend per share paid to the holders
of Series A TCI Group Common Stock, and whenever a dividend is paid to the
holders of Series B TCI Group Common Stock, the Corporation shall also pay to
the holders of Series A TCI Group Common Stock a dividend per share equal to
the dividend per share paid to the holders of Series B TCI Group Common Stock.

         (b)     DIVIDENDS ON SERIES A LIBERTY MEDIA GROUP COMMON STOCK AND
SERIES B LIBERTY MEDIA GROUP COMMON STOCK.  Dividends on the Series A Liberty
Media Group Common Stock and the Series B Liberty Media Group Common Stock may
be declared and paid only out of the lesser of (i) assets of the Corporation
legally available therefor and (ii) the Liberty Media Group Available Dividend
Amount.  Subject to paragraph 4 and the last sentence of paragraph 5(b) of this
Section E, whenever a dividend is paid to the holders of Series A Liberty Media
Group Common Stock, the Corporation shall also pay to the holders of Series B
Liberty Media Group Common Stock a dividend per share equal to the dividend per
share paid to the holders of Series A Liberty Media Group Common Stock, and
whenever a dividend is paid to the holders of Series B Liberty Media Group
Common Stock, the Corporation shall also pay to the holders of Series A Liberty
Media Group Common Stock a dividend per share equal to the dividend per share
paid to the holders of Series B Liberty Media Group Common Stock.

         (c)     DISCRIMINATION BETWEEN OR AMONG SERIES OF COMMON STOCK.  The
Board of Directors, subject to the provisions of paragraph 3(a) and 3(b) of
this Section E, shall have the authority and discretion to declare and pay
dividends on the Series A TCI Group Common Stock and Series B TCI Group Common
Stock or the Series A Liberty Media Group Common Stock and Series B Liberty
Media Group Common Stock in equal or unequal amounts, notwithstanding the
relationship between the TCI Group Available Dividend Amount and the Liberty
Media Group Available Dividend Amount, the respective amounts of prior
dividends declared on, or the liquidation rights of, the Series A TCI Group
Common Stock and Series B TCI Group Common Stock or the Series A Liberty Media
Group Common Stock and Series B Liberty Media Group Common Stock or any other
factor.





                                      -8-
<PAGE>   116
4.       Share Distributions.

         (a)     DISTRIBUTIONS ON SERIES A TCI GROUP COMMON STOCK AND SERIES B
TCI GROUP COMMON STOCK.  The Corporation may provide for the initial issuance
of shares of Series A Liberty Media Group Common Stock and Series B Liberty
Media Group Common Stock by declaring and paying a distribution (the
"Distribution") consisting of shares of Series A Liberty Media Group Common
Stock to holders of Series A TCI Group Common Stock and, on an equal per share
basis, shares of Series B Liberty Media Group Common Stock to holders of Series
B TCI Group Common Stock. If at any time after the Distribution a distribution
paid in Series A TCI Group Common Stock, Series B TCI Group Common Stock,
Series A Liberty Media Group Common Stock, Series B Liberty Media Group Common
Stock or any other securities of the Corporation or any other Person
(hereinafter sometimes called a "share distribution") is to be made with
respect to the Series A TCI Group Common Stock or Series B TCI Group Common
Stock, such share distribution may be declared and paid only as follows:

                 (i)      a share distribution consisting of shares of Series A
         TCI Group Common Stock (or Convertible Securities convertible into or
         exercisable or exchangeable for shares of Series A TCI Group Common
         Stock) to holders of Series A TCI Group Common Stock and Series B TCI
         Group Common Stock, on an equal per share basis; or consisting of
         shares of Series B TCI Group Common Stock (or Convertible Securities
         convertible into or exercisable or exchangeable for shares of Series B
         TCI Group Common Stock) to holders of Series A TCI Group Common Stock
         and Series B TCI Group Common Stock, on an equal per share basis; or
         consisting of shares of Series A TCI Group Common Stock (or
         Convertible Securities convertible into or exercisable or exchangeable
         for shares of Series A TCI Group Common Stock) to holders of Series A
         TCI Group Common Stock and, on an equal per share basis, shares of
         Series B TCI Group Common Stock (or like Convertible Securities
         convertible into or exercisable or exchangeable for shares of Series B
         TCI Group Common Stock) to holders of Series B TCI Group Common Stock;


                 (ii)     a share distribution consisting of shares of Series A
         Liberty Media Group Common Stock (or Convertible Securities
         convertible into or exercisable or exchangeable for shares of Series A
         Liberty Media Group Common Stock) to holders of Series A TCI Group
         Common Stock and Series B TCI Group Common Stock, on an equal per
         share basis; provided that the sum of (A) the aggregate number of
         shares of Series A Liberty Media Group Common Stock to be so issued
         (or the number of such shares which would be issuable upon conversion,
         exercise or exchange of any Convertible Securities to be so issued)
         and (B) the number of shares of such series that are subject to
         issuance upon conversion, exercise or exchange of any Convertible
         Securities then outstanding that are attributed to the TCI Group
         (other than Pre-Distribution Convertible Securities and other than
         Convertible Securities convertible into or exercisable or exchangeable
         for Committed Acquisition Shares) is less than or equal to the Number
         of Shares Issuable with Respect to the Inter-Group Interest; and





                                      -9-
<PAGE>   117
                 (iii)    a share distribution consisting of any class
         or series of securities of the Corporation or any other Person other
         than Series A TCI Group Common Stock, Series B TCI Group Common Stock,
         Series A Liberty Media Group Common Stock or Series B Liberty Media
         Group Common Stock (or Convertible Securities convertible into or
         exercisable or exchangeable for shares of Series A TCI Group Common
         Stock, Series B TCI Group Common Stock, Series A Liberty Media Group
         Common Stock or Series B Liberty Media Group Common Stock), either on
         the basis of a distribution of identical securities, on an equal per
         share basis, to holders of Series A TCI Group Common Stock and Series B
         TCI Group Common Stock or on the basis of a distribution of one class
         or series of securities to holders of Series A TCI Group Common Stock
         and another class or series of securities to holders of Series B TCI
         Group Common Stock, provided that the securities so distributed (and,
         if the distribution consists of Convertible Securities, the securities
         into which such Convertible Securities are convertible or for which
         they are exercisable or exchangeable) do not differ in any respect
         other than their relative voting rights and related differences in
         designation, conversion, redemption and share distribution provisions,
         with holders of shares of Series B TCI Group Common Stock receiving the
         class or series having the higher relative voting rights (without
         regard to whether such rights differ to a greater or lesser extent than
         the corresponding differences in voting rights, designation,
         conversion, redemption and share distribution provisions between the
         Series A TCI Group Common Stock and the Series B TCI Group Common
         Stock), provided that if the securities so distributed constitute
         capital stock of a Subsidiary of the Corporation, such rights shall not
         differ to a greater extent than the corresponding differences in voting
         rights, designation, conversion, redemption and share distribution
         provisions between the Series A TCI Group Common Stock and the Series B
         TCI Group Common Stock, and provided in each case that such
         distribution is otherwise made on an equal per share basis.

         The Corporation shall not reclassify, subdivide or combine the Series
A TCI Group Common Stock without reclassifying, subdividing or combining the
Series B TCI Group Common Stock, on an equal per share basis, and the
Corporation shall not reclassify, subdivide or combine the Series B TCI Group
Common Stock without reclassifying, subdividing or combining the Series A TCI
Group Common Stock, on an equal per share basis.

         (b)     DISTRIBUTIONS ON SERIES A LIBERTY MEDIA GROUP COMMON STOCK AND
SERIES B LIBERTY MEDIA GROUP COMMON STOCK.  If at any time a share distribution
is to be made with respect to the Series A Liberty Media Group Common Stock or
Series B Liberty Media Group Common Stock, such share distribution may be
declared and paid only as follows (or as permitted by paragraph 5 of this
Section E with respect to the redemptions and other distributions referred to
therein):

                 (i)      a share distribution consisting of shares of Series A
         Liberty Media Group Common Stock (or Convertible Securities convertible
         into or exercisable or exchangeable for shares of Series A Liberty
         Media Group Common Stock) to holders of Series A Liberty Media Group
         Common Stock and Series B Liberty Media Group Common Stock, on an





                                      -10-
<PAGE>   118
         equal per share basis; or consisting of shares of Series B Liberty
         Media Group Common Stock (or Convertible Securities convertible into or
         exercisable or exchangeable for shares of Series B Liberty Media Group
         Common Stock) to holders of Series A Liberty Media Group Common Stock
         and Series B Liberty Media Group Common Stock, on an equal per share
         basis; or consisting of shares of Series A Liberty Media Group Common
         Stock (or Convertible Securities convertible into or exercisable or
         exchangeable for shares of Series A Liberty Media Group Common Stock)
         to holders of Series A Liberty Media Group Common Stock and, on an
         equal per share basis, shares of Series B Liberty Media Group Common
         Stock (or like Convertible Securities convertible into or exercisable
         or exchangeable for shares of Series B Liberty Media Group Common
         Stock) to holders of Series B Liberty Media Group Common Stock; and

                 (ii)     a share distribution consisting of any class or
         series of securities of the Corporation or any other Person other than
         as described in clause (i) of this paragraph 4(b) and other than
         Series A TCI Group Common Stock or Series B TCI Group Common Stock (or
         Convertible Securities convertible into or exercisable or exchangeable
         for shares of Series A TCI Group Common Stock or Series B TCI Group
         Common Stock) either on the basis of a distribution of identical
         securities, on an equal per share basis, to holders of Series A
         Liberty Media Group Common Stock and Series B Liberty Media Group
         Common Stock or on the basis of a distribution of one class or series
         of securities to holders of Series A Liberty Media Group Common Stock
         and another class or series of securities to holders of Series B
         Liberty Media Group Common Stock, provided that the securities so
         distributed (and, if the distribution consists of Convertible
         Securities, the securities into which such Convertible Securities are
         convertible or for which they are exercisable or exchangeable) do not
         differ in any respect other than their relative voting rights and
         related differences in designation, conversion, redemption and share
         distribution provisions, with holders of shares of Series B Liberty
         Media Group Common Stock receiving the class or series having the
         higher relative voting rights (without regard to whether such rights
         differ to a greater or lesser extent than the corresponding
         differences in voting rights, designation, conversion, redemption and
         share distribution provisions between the Series A Liberty Media Group
         Common Stock and the Series B Liberty Media Group Common Stock),
         provided that if the securities so distributed constitute capital
         stock of a Subsidiary of the Corporation, such rights shall not differ
         to a greater extent than the corresponding differences in voting
         rights, designation, conversion, redemption and share distribution
         provisions between the Series A Liberty Media Group Common Stock and
         the Series B Liberty Media Group Common Stock, and provided in each
         case that such distribution is otherwise made on an equal per share
         basis.

         The Corporation shall not reclassify, subdivide or combine the Series
A Liberty Media Group Common Stock without reclassifying, subdividing or
combining the Series B Liberty Media Group Common Stock, on an equal per share
basis, and the Corporation shall not reclassify, subdivide or combine the
Series B Liberty Media Group Common Stock without reclassifying, subdividing or
combining the Series A Liberty Media Group Common Stock, on an equal per share
basis.





                                      -11-
<PAGE>   119

         5.      Redemption and Other Provisions Relating to the Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock.

         (a)     REDEMPTION IN EXCHANGE FOR STOCK OF SUBSIDIARY.  At any time
at which all of the assets and liabilities attributed to the Liberty Media
Group have become and continue to be held directly or indirectly by any one or
more corporations all of the capital stock of which is owned by the Corporation
(the "Liberty Media Group Subsidiaries"), the Board of Directors may, subject
to the availability of assets of the Corporation legally available therefor,
redeem, on a pro rata basis, all of the outstanding shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock in
exchange for an aggregate number of outstanding fully paid and nonassessable
shares of common stock of each Liberty Media Group Subsidiary equal to the
product of the Adjusted Outstanding Interest Fraction and the number of all of
the outstanding shares of common stock of such Liberty Media Group Subsidiary.
Any such redemption shall occur on a Redemption Date set forth in a notice to
holders of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock and Convertible Securities convertible into or exercisable
or exchangeable for shares of either such series (unless provision for notice
is otherwise made pursuant to the terms of such Convertible Securities)
pursuant to paragraph 5(d)(vi). In effecting such a redemption, the Board of
Directors may determine either to (i) redeem shares of Series A Liberty Media
Group Common Stock and Series B Liberty Media Group Common Stock in exchange
for shares of separate classes or series of common stock of each Liberty Media
Group Subsidiary with relative voting rights and related differences in
designation, conversion, redemption and share distribution provisions not
greater than the corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions between the Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock,
with holders of shares of Series B Liberty Media Group Common Stock receiving
the class or series having the higher relative voting rights, or (ii) redeem
shares of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock in exchange for shares of a single class of common stock of
each Liberty Media Group Subsidiary without distinction between the shares
distributed to the holders of the Series A Liberty Media Group Common Stock and
Series B Liberty Media Group Common Stock. If the Corporation determines to
undertake a redemption as described in clause (i) of the preceding sentence,
the outstanding shares of common stock of each Liberty Media Group Subsidiary
not distributed to holders of Series A Liberty Media Group Common Stock or
Series B Liberty Media Group Common Stock shall consist solely of the class or
series having the lower relative voting rights.

         (b)     MANDATORY DIVIDEND, REDEMPTION OR CONVERSION IN CASE OF
DISPOSITION OF LIBERTY MEDIA GROUP ASSETS.  In the event of the Disposition, in
one transaction or a series of related transactions, by the Corporation and its
subsidiaries of all or substantially all of the properties and assets of the
Liberty Media Group to one or more persons, entities or groups (other than (w)
in connection with the Disposition by the Corporation of all of the
Corporation's properties and assets in one transaction or a series of related
transactions in connection with the liquidation, dissolution or winding up of
the Corporation within the meaning of paragraph 6 of this Section E, (x) a
dividend, other distribution or redemption in accordance with any provision of
paragraph 3, paragraph 4,





                                      -12-
<PAGE>   120
paragraph 5(a) or paragraph 6 of this Section E, (y) to any person, entity or
group which the Corporation, directly or indirectly, after giving effect to the
Disposition, controls or (z) in connection with a Related Business
Transaction), the Corporation shall, on or prior to the 85th Trading Day
following the consummation of such Disposition, either:

                 (i)      subject to paragraph 3(b) of this Section E, declare
         and pay a dividend in cash and/or in securities or other property
         (other than a dividend or distribution of Common Stock) to the holders
         of the outstanding shares of Series A Liberty Media Group Common Stock
         and Series B Liberty Media Group Common Stock equally on a share for
         share basis (subject to the last sentence of this Section 5(b)), in an
         aggregate amount equal to the product of the Outstanding Interest
         Fraction as of the record date for determining the holders entitled to
         receive such dividend and the Net Proceeds of such Disposition; or

                 (ii)     provided that there are assets of the Corporation
         legally available therefor and the Liberty Media Group Available
         Dividend Amount would have been sufficient to pay a dividend in lieu
         thereof pursuant to clause (i) of this paragraph 5(b), then:

                          (A) if such Disposition involves all (not merely
                 substantially all) of the properties and assets of the Liberty
                 Media Group, redeem all outstanding shares of Series A Liberty
                 Media Group Common Stock and Series B Liberty Media Group
                 Common Stock in exchange for cash and/or securities or other
                 property (other than Common Stock) in an aggregate amount
                 equal to the product of the Adjusted Outstanding Interest
                 Fraction as of the date of such redemption and the Net
                 Proceeds of such Disposition, such aggregate amount to be
                 allocated (subject to the last sentence of this paragraph
                 5(b)) to shares of Series A Liberty Media Group Common Stock
                 and Series B Liberty Media Group Common Stock in the ratio of
                 the number of shares of each such series outstanding (so that
                 the amount of consideration paid for the redemption of each
                 share of Series A Liberty Media Group Common Stock and each
                 share of Series B Liberty Media Group Common Stock is the
                 same); or

                          (B) if such Disposition involves substantially all
                 (but not all) of the properties and assets of the Liberty
                 Media Group, apply an aggregate amount of cash and/or
                 securities or other property (other than Common Stock) equal
                 to the product of the Outstanding Interest Fraction as of the
                 date shares are selected for redemption and the Net Proceeds
                 of such Disposition to the redemption of outstanding shares of
                 Series A Liberty Media Group Common Stock and Series B Liberty
                 Media Group Common Stock, such aggregate amount to be
                 allocated (subject to the last sentence of this paragraph
                 5(b)) to shares of Series A Liberty Media Group Common Stock
                 and Series B Liberty Media Group Common Stock in the ratio of
                 the number of shares of each such series outstanding, and the
                 number of shares of each such series to be redeemed to equal
                 the lesser of (x) the whole number nearest the number
                 determined by dividing the aggregate amount so allocated to
                 the redemption of such series by the average Market Value of
                 one share of Series A Liberty Media Group





                                      -13-
<PAGE>   121
                 Common Stock during the ten-Trading Day period beginning on
                 the 16th Trading Day following the consummation of such
                 Disposition and (y) the number of shares of such series
                 outstanding (so that the amount of consideration paid for the
                 redemption of each share of Series A Liberty Media Group
                 Common Stock and each share of Series B Liberty Media Group
                 Common Stock is the same);

         such redemption to be effected in accordance with the applicable
         provisions of paragraph 5(d) of this Section E; or

                 (iii)    convert (A) each outstanding share of Series A
         Liberty Media Group Common Stock into a number (or fraction) of fully
         paid and nonassessable shares of Series A TCI Group Common Stock and
         (B) each outstanding share of Series B Liberty Media Group Common
         Stock into a number (or fraction) of fully paid and nonassessable
         shares of Series B TCI Group Common Stock, in each case equal to 110%
         of the average daily ratio (calculated to the nearest five decimal
         places) of the Market Value of one share of Series A Liberty Media
         Group Common Stock to the Market Value of one share of Series A TCI
         Group Common Stock during the ten-Trading Day period referred to in
         clause (ii)(B) of this paragraph 5(b).

         For purposes of this paragraph 5(b):

                 (x)      as of any date, "substantially all of the properties
         and assets of the Liberty Media Group" shall mean a portion of such
         properties and assets that represents at least 80% of the then-current
         market value (as determined by the Board of Directors) of the
         properties and assets of the Liberty Media Group as of such date;

                 (y)      in the case of a Disposition of properties and assets
         in a series of related transactions, such Disposition shall not be
         deemed to have been consummated until the consummation of the last of
         such transactions; and

                 (z)      the Corporation may pay the dividend or redemption
         price referred to in clause (i) or (ii) of this subparagraph 5(b)
         either in the same form as the proceeds of the Disposition were
         received or in any other combination of cash or securities or other
         property (other than Common Stock) that the Board of Directors
         determines will have an aggregate market value on a fully distributed
         basis, of not less than the amount of the Net Proceeds.  If the
         dividend or redemption price is paid in the form of securities of an
         issuer other than the Corporation, the Board of Directors may
         determine either to (1) pay the dividend or redemption price in the
         form of separate classes or series of securities, with one class or
         series of such securities to holders of Series A Liberty Media Group
         Common Stock and another class or series of securities to holders of
         Series B Liberty Media Group Common Stock, provided that such
         securities (and, if such securities are convertible into or
         exercisable or exchangeable for shares of another class or series of
         securities, the securities so issuable upon such conversion, exercise
         or exchange) do not differ in any respect other than their





                                      -14-
<PAGE>   122
         relative voting rights and related differences in designation,
         conversion, redemption and share distribution provisions, with holders
         of shares of Series B Liberty Media Group Common Stock receiving the
         class or series having the higher relative voting rights (without
         regard to whether such rights differ to a greater or lesser extent
         than the corresponding differences in voting rights, designation,
         conversion, redemption and share distribution provisions between the
         Series A Liberty Media Group Common Stock and the Series B Liberty
         Media Group Common Stock), provided that if such securities constitute
         capital stock of a Subsidiary of the Corporation, such rights shall
         not differ to a greater extent than the corresponding differences in
         voting rights, designation, conversion, redemption and share
         distribution provisions between the Series A Liberty Media Group
         Common Stock and Series B Liberty Media Group Common Stock, and
         otherwise such securities shall be distributed on an equal per share
         basis, or (2) pay the dividend or redemption price in the form of a
         single class of securities without distinction between the shares
         received by the holders of Series A Liberty Media Group Common Stock
         and Series B Liberty Media Group Common Stock.

         (c)     CERTAIN PROVISIONS RESPECTING CONVERTIBLE SECURITIES.  Unless
the provisions of any class or series of Pre-Distribution Convertible
Securities or Convertible Securities which are convertible into or exercisable
or exchangeable for Committed Acquisition Shares provide specifically to the
contrary, after any Conversion Date or Redemption Date on which all outstanding
shares of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock were converted or redeemed, any share of Series A Liberty
Media Group Common Stock or Series B Liberty Media Group Common Stock that is
issued on conversion, exercise or exchange of any Pre-Distribution Convertible
Securities or any Convertible Securities which are convertible into or
exercisable or exchangeable for Committed Acquisition Shares shall, immediately
upon issuance pursuant to such conversion, exercise or exchange and without any
notice or any other action on the part of the Corporation or its Board of
Directors or the holder of such share of Series A Liberty Media Group Common
Stock or Series B Liberty Media Group Common Stock, be converted into (in case
all such outstanding shares were converted) or redeemed in exchange for (in
case all such outstanding shares were redeemed) the kind and amount of shares
of capital stock, cash and/or other securities or property that a holder of
such Pre-Distribution Convertible Securities or any Convertible Securities
which are convertible into or exercisable or exchangeable for Committed
Acquisition Shares would have been entitled to receive pursuant to the terms of
such securities had such terms provided that the conversion, exercise or
exchange privilege in effect immediately prior to any such conversion or
redemption of all outstanding shares of Series A Liberty Media Group Common
Stock and Series B Liberty Media Group Common Stock would be adjusted so that
the holder of any such Pre-Distribution Convertible Securities or any
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares thereafter surrendered for
conversion, exercise or exchange would be entitled to receive the kind and
amount of shares of capital stock, cash and/or other securities or property
such holder would have received as a result of such action had such securities
been converted, exercised or exchanged immediately prior thereto. With respect
to any Convertible Securities which are created, established or otherwise first
authorized for issuance subsequent to the record date for the Distribution
(other than





                                      -15-
<PAGE>   123
Pre-Distribution Convertible Securities and Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares), the terms and provisions of which do not provide for adjustments
specifying the kind and amount of capital stock, cash and/or securities or
other property that such holder would be entitled to receive upon the
conversion, exercise or exchange of such Convertible Securities following any
Conversion Date or Redemption Date on which all outstanding shares of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock
were converted or redeemed, then upon such conversion, exercise or exchange of
such Convertible Securities, any share of Series A Liberty Media Group Common
Stock or Series B Liberty Media Group Common Stock that is issued on
conversion, exercise or exchange of any such Convertible Securities shall,
immediately upon issuance pursuant to such conversion, exercise or exchange and
without any notice or any other action on the part of the Corporation or its
Board of Directors or the holder of such share of Series A Liberty Media Group
Common Stock or Series B Liberty Media Group Common Stock, be redeemed in
exchange for, to the extent assets of the Corporation are legally available
therefor, the amount of $.01 per share in cash.

         (d)     GENERAL.

         (i)     Not later than the 10th Trading Day following the consummation
of a Disposition referred to in subparagraph 5(b) of this Section E, the
Corporation shall announce publicly by press release (A) the Net Proceeds of
such Disposition, (B) the number of outstanding shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock, (C) the
number of shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock into or for which Convertible Securities are
then convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof (and stating which, if any, of such Convertible
Securities constitute Pre-Distribution Convertible Securities or Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares) and the number of Committed Acquisition Shares
issuable, (D) the Outstanding Interest Fraction as of a recent date preceding
the date of such notice and (E) the Adjusted Outstanding Interest Fraction as
of a recent date preceding the date of such notice. Not earlier than the 26th
Trading Day and not later than the 30th Trading Day following the consummation
of such Disposition, the Corporation shall announce publicly by press release
which of the actions specified in clauses (i), (ii) or (iii) of paragraph 5(b)
of this Section E it has irrevocably determined to take.

         (ii)    If the Corporation determines to pay a dividend pursuant to
clause (i) of subparagraph 5(b) of this Section E, the Corporation shall, not
later than the 30th Trading Day following the consummation of such Disposition,
cause to be given to each holder of outstanding shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock, and to
each holder of Convertible Securities convertible into or exercisable or
exchangeable for shares of either such series (unless provision for notice is
otherwise made pursuant to the terms of such Convertible Securities), a notice
setting forth (A) the record date for determining holders entitled to receive
such dividend, which shall be not earlier than the 40th Trading Day and not
later than the 50th Trading Day following the consummation of such Disposition,
(B) the anticipated payment date





                                      -16-
<PAGE>   124
of such dividend (which shall not be more than 85 Trading Days following the
consummation of such Disposition), (C) the kind of shares of capital stock,
cash and/or other securities or property to be distributed in respect of shares
of Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock, (D) the Net Proceeds of such Disposition, (E) the Outstanding
Interest Fraction as of a recent date preceding the date of such notice, (F)
the number of outstanding shares of Series A Liberty Media Group Common Stock
and Series B Liberty Media Group Common Stock and the number of shares of
Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock into or for which outstanding Convertible Securities are then
convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof and (G) in the case of a notice to holders of
Convertible Securities, a statement to the effect that holders of such
Convertible Securities shall be entitled to receive such dividend only if they
appropriately convert, exercise or exchange them prior to the record date
referred to in clause (A) of this sentence. Such notice shall be sent by
first-class mail, postage prepaid, at such holder's address as the same appears
on the transfer books of the Corporation.

         (iii)   If the Corporation determines to undertake a redemption of
shares of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock following a Disposition of all (not merely substantially
all) of the properties and assets of the Liberty Media Group pursuant to clause
(ii) (A) of paragraph 5(b) of this Section E, the Corporation shall cause to be
given to each holder of outstanding shares of Series A Liberty Media Group
Common Stock and Series B Liberty Media Group Common Stock and to each holder
of Convertible Securities convertible into or exercisable or exchangeable for
shares of either such series (unless provision for notice is otherwise made
pursuant to the terms of such Convertible Securities), a notice setting forth
(A) a statement that all shares of Series A Liberty Media Group Common Stock
and Series B Liberty Media Group Common Stock outstanding on the Redemption
Date shall be redeemed, (B) the Redemption Date (which shall not be more than
85 Trading Days following the consummation of such Disposition), (C) the kind
of shares of capital stock, cash and/or other securities or property to be paid
as a redemption price in respect of shares of Series A Liberty Media Group
Common Stock and Series B Liberty Media Group Common Stock outstanding on the
Redemption Date, (D) the Net Proceeds of such Disposition, (E) the Adjusted
Outstanding Interest Fraction as of a recent date preceding the date of such
notice, (F) the place or places where certificates for shares of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock,
properly endorsed or assigned for transfer (unless the Corporation waives such
requirement), are to be surrendered for delivery of certificates for shares of
such capital stock, cash and/or other securities or property, (G) the number of
outstanding shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock and the number of shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock into or
for which outstanding Convertible Securities are then convertible, exercisable
or exchangeable and the conversion, exercise or exchange prices thereof (and
stating which, if any, of such Convertible Securities constitute
Pre-Distribution Convertible Securities or Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares) and the number of Committed Acquisition Shares issuable, and (H) in the
case of a notice to holders of Convertible Securities, a statement to the
effect that holders of such Convertible Securities shall be entitled to





                                      -17-
<PAGE>   125
participate in such redemption only if such holders appropriately convert,
exercise or exchange such Convertible Securities on or prior to the Redemption
Date referred to in clause (B) of this sentence and a statement as to what, if
anything, such holders shall be entitled to receive pursuant to the terms of
such Convertible Securities or, if applicable, paragraph 5(c) of this Section E
if such holders convert, exercise or exchange such Convertible Securities
following such Redemption Date.  Such notice shall be sent by first-class mail,
postage prepaid, not less than 35 Trading Days nor more than 45 Trading Days
prior to the Redemption Date, at such holder's address as the same appears on
the transfer books of the Corporation.

         (iv)    If the Corporation determines to undertake a redemption of
shares of Series A Media Group Common Stock and Series B Liberty Media Group
Common Stock following a Disposition of substantially all (but not all) of the
properties and assets of the Liberty Media Group pursuant to clause (ii)(B) of
paragraph 5(b) of this Section E, the Corporation shall, not later than the
30th Trading Day following the consummation of such Disposition, cause to be
given to each holder of record of outstanding shares of Series A Liberty Media
Group Common Stock and Series B Liberty Media Group Common Stock, and to each
holder of Convertible Securities convertible into or exercisable or
exchangeable for shares of either such series (unless provision for notice is
otherwise made pursuant to the terms of such Convertible Securities), a notice
setting forth (A) a date not earlier than the 40th Trading Day and not later
than the 50th Trading Day following the consummation of such Disposition which
shall be the date on which shares of the Series A Liberty Media Group Common
Stock and Series B Liberty Media Group Common Stock then outstanding shall be
selected for redemption, (B) the anticipated Redemption Date (which shall not
be more than 85 Trading Days following the consummation of such Disposition),
(C) the kind of shares of capital stock, cash and/or other securities or
property to be paid as a redemption price in respect of shares of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock
selected for redemption, (D) the Net Proceeds of such Disposition, (E) the
Outstanding Interest Fraction as of a recent date preceding the date of such
notice, (F) the number of outstanding shares of Series A Liberty Media Group
Common Stock and Series B Liberty Media Group Common Stock and the number of
shares of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock into or for which outstanding Convertible Securities are
then convertible, exercisable or exchangeable and the conversion or exercise
prices thereof, (G) in the case of a notice to holders of Convertible
Securities, a statement to the effect that holders of such Convertible
Securities shall be entitled to participate in such selection for redemption
only if such holders appropriately convert, exercise or exchange such
Convertible Securities on or prior to the date referred to in clause (A) of
this sentence and a statement as to what, if anything, such holders shall be
entitled to receive pursuant to the terms of such Convertible Securities if
such holders convert, exercise or exchange such Convertible Securities
following such date and (H) a statement that the Corporation will not be
required to register a transfer of any shares of Series A Liberty Media Group
Common Stock or Series B Liberty Media Group Common Stock for a period of 15
Trading Days next preceding the date referred to in clause (A) of this
sentence. Promptly following the date referred to in clause (A) of the
preceding sentence, but not earlier than the 40th Trading Day and not later
than the 50th Trading Day following the consummation of such Disposition, the
Corporation shall cause to be given to each holder of shares of Series A
Liberty Media Group





                                      -18-
<PAGE>   126
Common Stock and Series B Liberty Media Group Common Stock to be so redeemed, a
notice setting forth (A) the number of shares of Series A Liberty Media Group
Common Stock and Series B Liberty Media Group Common Stock held by such holder
to be redeemed, (B) a statement that such shares of Series A Liberty Media
Group Common Stock and Series B Liberty Media Group Common Stock shall be
redeemed, (C) the Redemption Date (which shall not be more than 85 Trading Days
following the consummation of such Disposition), (D) the kind and per share
amount of shares of capital stock, cash and/or other securities or property to
be received by such holder with respect to each share of such Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock to be
redeemed, including details as to the calculation thereof, and (E) the place or
places where certificates for shares of such Series A Liberty Media Group
Common Stock or Series B Liberty Media Group Common Stock, properly endorsed or
assigned for transfer (unless the Corporation waives such requirement), are to
be surrendered for delivery of certificates for shares of such capital stock,
cash and/or other securities or property. The notices referred to in this
clause (iv) shall be sent by first-class mail, postage prepaid, at such
holder's address as the same appears on the transfer books of the Corporation.
The outstanding shares of Series A Liberty Media Group Common Stock and Series
B Liberty Media Group Common Stock to be redeemed shall be redeemed by the
Corporation pro rata among the holders of Series A Liberty Media Group Common
Stock and Series B Liberty Media Group Common Stock or by such other method as
may be determined by the Board of Directors to be equitable.

         (v)     In the event of any conversion pursuant to paragraph 2(c) of
this Section E or pursuant to this paragraph 5 (other than pursuant to
paragraph 5(c)), the Corporation shall cause to be given to each holder of
outstanding shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock and to each holder of Convertible Securities
convertible into or exercisable or exchangeable for shares of either such
series (unless provision for such notice is otherwise made pursuant to the
terms of such Convertible Securities), a notice setting forth (A) a statement
that all outstanding shares of Series A Liberty Media Group Common Stock and
Series B Liberty Media Group Common Stock shall be converted, (B) the
Conversion Date (which shall not be more than 85 Trading Days following the
consummation of such Disposition in the event of a conversion pursuant to
paragraph 5(b) and which shall not be more than 120 days after the Appraisal
Date in the event of a conversion pursuant to paragraph 2(c)), (C) the per
share number of shares of Series A TCI Group Common Stock or Series B TCI Group
Common Stock, as applicable, to be received with respect to each share of
Series A Liberty Media Group Common Stock or Series B Liberty Media Group
Common Stock, including details as to the calculation thereof, (D) the place or
places where certificates for shares of Series A Liberty Media Group Common
Stock or Series B Liberty Media Group Common Stock, properly endorsed or
assigned for transfer (unless the Corporation shall waive such requirement),
are to be surrendered, (E) the number of outstanding shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock, the
number of Committed Acquisition Shares issuable and the number of shares of
Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock into or for which outstanding Convertible Securities are then
convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof and (F) in the case of a notice to holders of
Convertible Securities, a statement to the effect that holders of such
Convertible





                                      -19-
<PAGE>   127
Securities shall be entitled to participate in such conversion only if such
holders appropriately convert, exercise or exchange such Convertible Securities
on or prior to the Conversion Date referred to in clause (B) of this sentence
and a statement as to what, if anything, such holders shall be entitled to
receive pursuant to the terms of such Convertible Securities or, if applicable,
paragraph 5(c) of this Section E if such holders convert, exercise or exchange
such Convertible Securities following such Conversion Date. Such notice shall
be sent by first-class mail, postage prepaid, not less than 35 Trading Days nor
more than 45 Trading Days prior to the Conversion Date, at such holder's
address as the same appears on the transfer books of the Corporation.

         (vi)    If the Corporation determines to redeem shares of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock
pursuant to subparagraph (a) of this paragraph 5, the Corporation shall
promptly cause to be given to each holder of Series A Liberty Media Group
Common Stock and Series B Liberty Media Group Common Stock and to each holder
of Convertible Securities convertible into or exercisable or exchangeable for
shares of either such series (unless provision for such notice is otherwise
made pursuant to the terms of such Convertible Securities), a notice setting
forth (A) a statement that all outstanding shares of Series A Liberty Media
Group Common Stock and Series B Liberty Media Group Common Stock shall be
redeemed in exchange for shares of common stock of the Liberty Media Group
Subsidiaries, (B) the Redemption Date, (C) the Adjusted Outstanding Interest
Fraction as of a recent date preceding the date of such notice, (D) the place
or places where certificates for shares of Series A Liberty Media Group Common
Stock and Series B Liberty Media Group Common Stock, properly endorsed or
assigned for transfer (unless the Corporation shall waive such requirement),
are to be surrendered for delivery of certificates for shares of common stock
of the Liberty Media Group Subsidiaries, (E) the number of outstanding shares
of Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock and the number of shares of Series A Liberty Media Group Common
Stock and Series B Liberty Media Group Common Stock into or for which
outstanding Convertible Securities are then convertible, exercisable or
exchangeable and the conversion, exercise or exchange prices thereof (and
stating which, if any, of such Convertible Securities constitute
Pre-Distribution Convertible Securities or Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares) and the number of Committed Acquisition Shares issuable, and (F) in the
case of a notice to holders of Convertible Securities, a statement to the
effect that holders of such Convertible Securities shall be entitled to
participate in such redemption only if such holders appropriately convert,
exercise or exchange such Convertible Securities on or prior to the Redemption
Date referred to in clause (B) of this sentence and a statement as to what, if
anything, such holders shall be entitled to receive pursuant to the terms of
such Convertible Securities or, if applicable, paragraph 5(c) of this Section E
if such holders convert, exercise or exchange such Convertible Securities
following the Redemption Date. Such notice shall be sent by first-class mail,
postage prepaid, not less than 35 Trading Days nor more than 45 Trading Days
prior to the Redemption Date, at such holder's address as the same appears on
the transfer books of the Corporation.

         (vii)   Neither the failure to mail any notice required by this
paragraph 5(d) to any particular holder of Series A Liberty Media Group Common
Stock, Series B Liberty Media Group Common





                                      -20-
<PAGE>   128
Stock or of Convertible Securities nor any defect therein shall affect the
sufficiency thereof with respect to any other holder of outstanding shares of
Series A Liberty Media Group Common Stock or Series B Liberty Media Group
Common Stock or of Convertible Securities, or the validity of any conversion or
redemption.

         (viii)  The Corporation shall not be required to issue or deliver
fractional shares of any class of capital stock or any fractional securities to
any holder of Series A Liberty Media Group Common Stock or Series B Liberty
Media Group Common Stock upon any conversion, redemption, dividend or other
distribution pursuant to paragraph 2(c) of this Section E or pursuant to this
paragraph 5. In connection with the determination of the number of shares of
any class of capital stock that shall be issuable or the amount of securities
that shall be deliverable to any holder of record upon any such conversion,
redemption, dividend or other distribution (including any fractions of shares
or securities), the Corporation may aggregate the number of shares of Series A
Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock
held at the relevant time by such holder of record. If the number of shares of
any class of capital stock or the amount of securities remaining to be issued
or delivered to any holder of Series A Liberty Media Group Common Stock or
Series B Liberty Media Group Common Stock is a fraction, the Corporation shall,
if such fraction is not issued or delivered to such holder, pay a cash
adjustment in respect of such fraction in an amount equal to the fair market
value of such fraction on the fifth Trading Day prior to the date such payment
is to be made (without interest). For purposes of the preceding sentence, "fair
market value" of any fraction shall be (A) in the case of any fraction of a
share of capital stock of the Corporation, the product of such fraction and the
Market Value of one share of such capital stock and (B) in the case of any
other fractional security, such value as is determined by the Board of
Directors.

         (ix)    No adjustments in respect of dividends shall be made upon the
conversion or redemption of any shares of Series A Liberty Media Group Common
Stock or Series B Liberty Media Group Common Stock; provided, however, that if
the Conversion Date or the Redemption Date with respect to the Series A Liberty
Media Group Common Stock or Series B Liberty Media Group Common Stock shall be
subsequent to the record date for the payment of a dividend or other
distribution thereon or with respect thereto, the holders of shares of Series A
Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock
at the close of business on such record date shall be entitled to receive the
dividend or other distribution payable on or with respect to such shares on the
date set for payment of such dividend or other distribution, notwithstanding
the conversion or redemption of such shares or the Corporation's default in
payment of the dividend or distribution due on such date.

         (x)     Before any holder of shares of Series A Liberty Media Group
Common Stock or Series B Liberty Media Group Common Stock shall be entitled to
receive certificates representing shares of any kind of capital stock or cash
and/or securities or other property to be received by such holder with respect
to shares of Series A Liberty Media Group Common Stock or Series B Liberty
Media Group Common Stock pursuant to paragraph 2(c) of this Section E or
pursuant to this paragraph 5, such holder shall surrender at such place as the
Corporation shall specify certificates for such shares of Series A Liberty
Media Group Common Stock or Series B Liberty Media Group





                                      -21-
<PAGE>   129
Common Stock, properly endorsed or assigned for transfer (unless the
Corporation shall waive such requirement).  The Corporation shall as soon as
practicable after such surrender of certificates representing shares of Series
A Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock
deliver to the person for whose account shares of Series A Liberty Media Group
Common Stock or Series B Liberty Media Group Common Stock were so surrendered,
or to the nominee or nominees of such person, certificates representing the
number of whole shares of the kind of capital stock or cash and/or securities
or other property to which such person shall be entitled as aforesaid, together
with any payment for fractional securities contemplated by paragraph
5(d)(viii). If less than all of the shares of Series A Liberty Media Group
Common Stock or Series B Liberty Media Group Common Stock represented by any
one certificate are to be redeemed, the Corporation shall issue and deliver a
new certificate for the shares of Series A Liberty Media Group Common Stock or
Series B Liberty Media Group Common Stock not redeemed. The Corporation shall
not be required to register a transfer of (1) any shares of Series A Liberty
Media Group Common Stock or Series B Liberty Media Group Common Stock for a
period of 15 Trading Days next preceding any selection of shares of Series A
Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock
to be redeemed or (2) any shares of Series A Liberty Media Group Common Stock
or Series B Liberty Media Group Common Stock selected or called for redemption.
Shares selected for redemption may not thereafter be converted pursuant to
paragraph 2(b) of this Section E.

         (xi)    From and after any applicable Conversion Date or Redemption
Date, all rights of a holder of shares of Series A Liberty Media Group Common
Stock or Series B Liberty Media Group Common Stock that were converted or
redeemed shall cease except for the right, upon surrender of the certificates
representing shares of Series A Liberty Media Group Common Stock or Series B
Liberty Media Group Common Stock, to receive certificates representing shares
of the kind and amount of capital stock or cash and/or securities or other
property for which such shares were converted or redeemed, together with any
payment for fractional securities contemplated by paragraph 5(d)(viii) of this
Section E and such holder shall have no other or further rights in respect of
the shares of Series A Liberty Media Group Common Stock or Series B Liberty
Media Group Common Stock so converted or redeemed, including, but not limited
to, any rights with respect to any cash, securities or other properties which
are reserved or otherwise designated by the Corporation as being held for the
satisfaction of the Corporation's obligations to pay or deliver any cash,
securities or other property upon the conversion, exercise or exchange of any
Convertible Securities outstanding as of the date of such conversion or
redemption or any Committed Acquisition Shares which may then be issuable. No
holder of a certificate that, immediately prior to the applicable Conversion
Date or Redemption Date for the Series A Liberty Media Group Common Stock or
Series B Liberty Media Group Common Stock, represented shares of Series A
Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock
shall be entitled to receive any dividend or other distribution with respect to
shares of any kind of capital stock into or in exchange for which the Series A
Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock
was converted or redeemed until surrender of such holder's certificate for a
certificate or certificates representing shares of such kind of capital stock.
Upon such surrender, there shall be paid to the holder the amount of any
dividends or other distributions (without interest) which





                                      -22-
<PAGE>   130
theretofore became payable with respect to a record date after the Conversion
Date or Redemption Date, as the case may be, but that were not paid by reason
of the foregoing, with respect to the number of whole shares of the kind of
capital stock represented by the certificate or certificates issued upon such
surrender. From and after a Conversion Date or Redemption Date, as the case may
be, for any shares of Series A Liberty Media Group Common Stock or Series B
Liberty Media Group Common Stock, the Corporation shall, however, be entitled
to treat the certificates for shares of Series A Liberty Media Group Common
Stock or Series B Liberty Media Group Common Stock that have not yet been
surrendered for conversion or redemption as evidencing the ownership of the
number of whole shares of the kind or kinds of capital stock for which the
shares of Series A Liberty Media Group Common Stock or Series B Liberty Media
Group Common Stock represented by such certificates shall have been converted
or redeemed, notwithstanding the failure to surrender such certificates.

         (xii)   The Corporation shall pay any and all documentary, stamp or
similar issue or transfer taxes that may be payable in respect of the issue or
delivery of any shares of capital stock and/or other securities on conversion
or redemption of shares of Series A Liberty Media Group Common Stock or Series
B Liberty Media Group Common Stock pursuant to this Section E. The Corporation
shall not, however, be required to pay any tax that may be payable in respect
of any transfer involved in the issue and delivery of any shares of capital
stock in a name other than that in which the shares of Series A Liberty Media
Group Common Stock or Series B Liberty Media Group Common Stock so converted or
redeemed were registered and no such issue or delivery shall be made unless and
until the person requesting such issue has paid to the Corporation the amount
of any such tax, or has established to the satisfaction of the Corporation that
such tax has been paid.

6.       Liquidation.

         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 other liabilities of the Corporation and subject to
the prior payment in full of the preferential amounts to which any class or
series of Preferred Stock is entitled, (a) the holders of the shares of Series
A TCI Group Common Stock and the holders of the shares of Series B TCI Group
Common Stock shall share equally, on a share for share basis, in a percentage
of the funds of the Corporation remaining for distribution to its common
stockholders equal to 100% multiplied by the average daily ratio (expressed as
a decimal) of X/Z for the 20-Trading Day period ending on the Trading Day prior
to the date of the public announcement of such liquidation, dissolution or
winding up, and (b) the holders of the shares of Series A Liberty Media Group
Common Stock and the holders of the shares of Series B Liberty Media Group
Common Stock shall share equally, on a share for share basis, in a percentage
of the funds of the Corporation remaining for distribution to its common
stockholders equal to 100% multiplied by the average daily ratio (expressed as
a decimal) of Y/Z for such 20-Trading Day period, where X is the aggregate
Market Capitalization of the Series A TCI Group Common Stock and the Series B
TCI Group Common Stock, Y is the aggregate Market Capitalization of the Series
A Liberty Media Group Common Stock and the Series B Liberty Media Group Common
Stock, and Z is the aggregate Market Capitalization of the Series A TCI Group
Common Stock, the Series B





                                      -23-
<PAGE>   131
TCI Group Common Stock, the Series A Liberty Media Group Common Stock and the
Series B Liberty Media Group Common Stock. Neither the consolidation or merger
of the Corporation with or into any other corporation or corporations nor the
sale, transfer or lease of all or substantially all of the assets of the
Corporation shall itself be deemed to be a liquidation, dissolution or winding
up of the Corporation within the meaning of this paragraph 6.


7.       Determinations by the Board of Directors.

         Any determinations made by the Board of Directors under any provision
in this Section E shall be final and binding on all stockholders of the
Corporation, except as may otherwise be required by law. The Corporation shall
prepare a statement of any such determination by the Board of Directors
respecting the fair market value of any properties, assets or securities and
shall file such statement with the Secretary of the Corporation.

8.       Certain Definitions.

         Unless the context otherwise requires, the terms defined in this
paragraph 8 shall have, for all purposes of this Section E, the meanings herein
specified:

         "Adjusted Outstanding Interest Fraction", as of any date, shall mean a
fraction the numerator of which is the aggregate number of shares of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock
outstanding on such date and the denominator of which is the sum of (a) such
aggregate number of shares of Series A Liberty Media Group Common Stock and
Series B Liberty Media Group Common Stock outstanding on such date, (b) the
Number of Shares Issuable with Respect to the Inter-Group Interest as of such
date, (c) the aggregate number of shares of Series A Liberty Media Group Common
Stock and Series B Liberty Media Group Common Stock issuable, determined as of
such date, upon conversion, exercise or exchange of Pre-Distribution
Convertible Securities and (d) the number of Committed Acquisition Shares
issuable, determined as of such date.

         "Committed Acquisition Shares" shall mean (a) the shares of Series A
Liberty Media Group Common Stock that the Corporation has, prior to the record
date for the Distribution, agreed to issue, but as of such record date has not
issued, and (b) the shares of Series A Liberty Media Group Common Stock that
are issuable upon conversion, exercise or exchange of Convertible Securities
that the Corporation has, prior to the record date for the Distribution, agreed
to issue, but as of such record date has not issued, in each case including
obligations of the Corporation to issue shares of the Corporation's Class A
Common Stock, par value $1.00 per share, which as a result of the Distribution,
constitute obligations to issue, among other securities, Series A Liberty Media
Group Common Stock or Convertible Securities which are convertible into or
exercisable or exchangeable for Series A Liberty Media Group Common Stock;
provided, however that Committed Acquisition Shares shall not include any
shares of Series A Liberty Media Group Common Stock or Series B Liberty Media
Group Common Stock issuable upon conversion, exercise or exchange of





                                      -24-
<PAGE>   132
Pre-Distribution Convertible Securities. The type and amount of Committed
Acquisition Shares issuable shall be appropriately adjusted to reflect
subdivisions and combinations of the Series A Liberty Media Group Common Stock
and dividends or distributions of shares of Series A Liberty Media Group Common
Stock or Series B Liberty Media Group Common Stock to holders of Series A
Liberty Media Group Common Stock and other reclassifications of the Series A
Liberty Media Group Common Stock, in each case occurring (or the record date
for which occurs) after the Distribution.

         "Conversion Date" shall mean any date fixed by the Board of Directors
for a conversion of shares of Series A Liberty Media Group Common Stock and
Series B Liberty Media Group Common Stock, as set forth in a notice to holders
of Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock pursuant to paragraph 5(d) of this Section E.

         "Convertible Securities" shall mean any securities of the Corporation
(other than any series of Common Stock) that are convertible into, exchangeable
for or evidence the right to purchase any shares of any series of Common Stock,
whether upon conversion, exercise, exchange, pursuant to antidilution
provisions of such securities or otherwise.

         "Corporation Earnings (Loss) Attributable to the Liberty Media Group",
for any period, shall mean the net earnings or loss of the Liberty Media Group
for such period determined on a basis consistent with the determination of the
net earnings or loss of the Liberty Media Group for such period as presented in
the combined financial statements of the Liberty Media Group for such period,
including income and expenses of the Corporation attributed to the operations
of the Liberty Media Group on a substantially consistent basis, including
without limitation, corporate administrative costs, net interest and income
taxes.

         "Corporation Earnings (Loss) Attributable to the TCI Group", for any
period, shall mean the net earnings or loss of the TCI Group for such period
determined on a basis consistent with the determination of the net earnings or
loss of the TCI Group for such period as presented in the combined financial
statements of the TCI Group for such period, including income and expenses of
the Corporation attributed to the operations of the TCI Group on a
substantially consistent basis, including without limitation, corporate
administrative costs, net interest and income taxes.

         "Disposition" shall mean the sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or contribution of assets
or stock or otherwise) of properties or assets.

         "Inter-Group Interest Fraction", as of any date, shall mean a fraction
the numerator of which is the Number of Shares Issuable with Respect to the
Inter-Group Interest as of such date and the denominator of which is the sum of
(a) such Number of Shares Issuable with Respect to the Inter-Group Interest as
of such date and (b) the aggregate number of shares of Series A Liberty Media
Group Common Stock and Series B Liberty Media Group Common Stock outstanding as
of such date.





                                      -25-
<PAGE>   133
         "Liberty Media Group" shall mean, as of any date that any shares of
Series A Liberty Media Group Common Stock or Series B Liberty Media Group
Common Stock have been issued and continue to be outstanding:

                 (a)      the interest of the Corporation or of any of its
         subsidiaries in Liberty Media Corporation or any of its subsidiaries
         (including any successor thereto by merger, consolidation or sale of
         all or substantially all of its assets, whether or not in connection
         with a Related Business Transaction) and their respective properties
         and assets,

                 (b)      all assets and liabilities of the Corporation or any
         of its subsidiaries to the extent attributed to any of the properties
         or assets referred to in clause (a) of this sentence, whether or not
         such assets or liabilities are assets and liabilities of Liberty Media
         Corporation or any of its subsidiaries (or a successor as described in
         clause (a) of this sentence),

                 (c)      all assets and properties contributed or otherwise
         transferred to the Liberty Media Group from the TCI Group, and

                 (d)      the interest of the Corporation or any of its
         subsidiaries in the businesses, assets and liabilities acquired by the
         Corporation or any of its subsidiaries for the Liberty Media Group, as
         determined by the Board of Directors;

provided that (i) from and after any dividend or other distribution with
respect to any shares of Series  A Liberty Media Group Common Stock or Series B
Liberty Media Group Common Stock (other than a dividend or other distribution
payable in shares of Series A Liberty Media Group Common Stock or Series B
Liberty Media Group Common Stock, with respect to which adjustment shall be
made as provided in clause (a) of the definition of "Number of Shares Issuable
with Respect to the Inter-Group Interest", or in other securities of the
Corporation attributed to the Liberty Media Group for which provision shall be
made as set forth in the penultimate sentence of this definition), the Liberty
Media Group shall no longer include an amount of assets or properties equal to
the aggregate amount of such kind of assets or properties so paid in respect of
shares of Series A Liberty Media Group Common Stock or Series B Liberty Media
Group Common Stock multiplied by a fraction the numerator of which is equal to
the Inter-Group Interest Fraction in effect immediately prior to the record
date for such dividend or other distribution and the denominator of which is
equal to the Outstanding Interest Fraction in effect immediately prior to the
record date for such dividend or other distribution and (ii) from and after any
transfer of assets or properties from the Liberty Media Group to the TCI Group,
the Liberty Media Group shall no longer include the assets or properties so
transferred. If the Corporation shall pay a dividend or make any other
distribution with respect to shares of Series A Liberty Media Group Common
Stock or Series B Liberty Media Group Common Stock payable in securities of the
Corporation attributed to the Liberty Media Group other than Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock, the TCI
Group shall be deemed to hold an amount of such other securities equal to the
amount so distributed multiplied by the fraction specified in clause (i) of
this definition (determined as of a time immediately prior to the record date
for such dividend or other distribution), and to the extent





                                      -26-
<PAGE>   134
interest or dividends are paid or other distributions are made on such other
securities so distributed to the holders of Series A Liberty Media Group Common
Stock and Series B Liberty Media Group Common Stock, the Liberty Media Group
shall no longer include a corresponding ratable amount of the kind of assets
paid as such interest or dividends or other distributions in respect of such
securities so deemed to be held by the TCI Group. The Corporation may also, to
the extent any such other securities constitute Convertible Securities which
are at the time convertible, exercisable or exchangeable, cause such
Convertible Securities deemed to be held by the TCI Group to be deemed to be
converted, exercised or exchanged (and to the extent the terms of such
Convertible Securities require payment or delivery of consideration in order to
effect such conversion, exercise or exchange, the Liberty Media Group shall in
such case include an amount of the kind of properties or assets required to be
paid or delivered as such consideration for the amount of the Convertible
Securities deemed converted, exercised or exchanged as if such Convertible
Securities were outstanding), in which case such Convertible Securities shall
no longer be deemed to be held by the TCI Group or attributed to the Liberty
Media Group.

         "Liberty Media Group Available Dividend Amount", as of any date, shall
mean the product of the Outstanding Interest Fraction and either: (a) the
excess of (i) an amount equal to the total assets of the Liberty Media Group
less the total liabilities (not including preferred stock) of the Liberty Media
Group as of such date over (ii) the aggregate par value of, or any greater
amount determined to be capital in respect of, all outstanding shares of Series
A Liberty Media Group Common Stock, Series B Liberty Media Group Common Stock
and each class or series of Preferred Stock attributed to the Liberty Media
Group or (b) in case there is no such excess, an amount equal to the
Corporation Earnings (Loss) Attributable to the Liberty Media Group (if
positive) for the fiscal year in which such date occurs and/or the preceding
fiscal year.

         "Market Capitalization" of any class or series of capital stock of the
Corporation on any Trading Day shall mean the product of (i) the Market Value
of one share of such class or series on such Trading Day and (ii) the number of
shares of such class or series outstanding on such Trading Day.

         "Market Value" of any class or series of capital stock of the
Corporation on any day shall mean the average of the high and low reported
sales prices regular way of a share of such class or series on such day (if
such day is a Trading Day, and if such day is not a Trading Day, on the Trading
Day immediately preceding such day) or in case no such reported sale takes
place on such Trading Day the average of the reported closing bid and asked
prices regular way of a share of such class or series on such Trading Day, in
either case on the Nasdaq National Market, or if the shares of such class or
series are not quoted on such Nasdaq National Market on such Trading Day, the
average of the closing bid and asked prices of a share of such class or series
in the over-the-counter market on such Trading Day as furnished by any New York
Stock Exchange member firm selected from time to time by the Corporation, or if
such closing bid and asked prices are not made available by any such New York
Stock Exchange member firm on such Trading Day, the market value of a share of
such class or series as determined by the Board of Directors; provided that for
purposes of determining the ratios set forth in paragraphs 2(c), 5(b) and 6 of
this Section E, (a) the "Market





                                      -27-
<PAGE>   135
Value" of any share of any series of Common Stock on any day prior to the "ex"
date or any similar date for any dividend or distribution paid or to be paid
with respect to such series of Common Stock shall be reduced by the fair market
value of the per share amount of such dividend or distribution as determined by
the Board of Directors and (b) the "Market Value" of any share of any series of
Common Stock on any day prior to (i) the effective date of any subdivision (by
stock split or otherwise) or combination (by reverse stock split or otherwise)
of outstanding shares of such series of Common Stock or (ii) the "ex" date or
any similar date for any dividend or distribution with respect to any such
series of Common Stock in shares of such series of Common Stock shall be
appropriately adjusted to reflect such subdivision, combination, dividend or
distribution.

         "Net Proceeds" shall mean, as of any date, with respect to any
Disposition of any of the properties and assets of the Liberty Media Group, an
amount, if any, equal to the gross proceeds of such Disposition after any
payment of, or reasonable provision for, (a) any taxes payable by the
Corporation in respect of such Disposition or in respect of any resulting
dividend or redemption pursuant to clause (i) or (ii), respectively, of
paragraph 5(b) of this Section E (or which would have been payable but for the
utilization of tax benefits attributable to the TCI Group), (b) any transaction
costs, including, without limitation, any legal, investment banking and
accounting fees and expenses and (c) any liabilities and other obligations
(contingent or otherwise) of, or attributed to, the Liberty Media Group,
including, without limitation, any indemnity or guarantee obligations incurred
in connection with the Disposition or any liabilities for future purchase price
adjustments and any preferential amounts plus any accumulated and unpaid
dividends and other obligations (without duplication of amounts allocated for
the satisfaction of the Corporation's obligations with respect to
Pre-Distribution Convertible Securities and Committed Acquisition Shares
issuable which are included in the determination of the Adjusted Outstanding
Interest Fraction) in respect of Preferred Stock attributed to the Liberty
Media Group.  For purposes of this definition, any properties and assets of the
Liberty Media Group remaining after such Disposition shall constitute
"reasonable provision" for such amount of taxes, costs and liabilities
(contingent or otherwise) as can be supported by such properties and assets. To
the extent the proceeds of any Disposition include any securities or other
property other than cash, the Board of Directors shall determine the value of
such securities or property, including for the purpose of determining the
equivalent value thereof if the Board of Directors determines to pay a dividend
or redemption price in cash or securities or other property as provided in
clause (z) of paragraph 5(b) of this Section E.

         "Number of Shares Issuable with Respect to the Inter-Group Interest"
after the Distribution shall be zero and shall from time to time thereafter, as
applicable, be

                 (a)      adjusted as appropriate to reflect subdivisions (by
         stock split or otherwise) and combinations (by reverse stock split or
         otherwise) of the Series A Liberty Media Group Common Stock and
         dividends or distributions of shares of Series A Liberty Media Group
         Common Stock or Series B Liberty Media Group Common Stock to holders
         of Series A Liberty Media Group Common Stock and other
         reclassifications of Series A Liberty Media Group Common Stock,





                                      -28-
<PAGE>   136
                 (b)      decreased (but not to less than zero) by (i) the
         aggregate number of shares of Series A Liberty Media Group Common
         Stock issued or sold by the Corporation after the Distribution other
         than Committed Acquisition Shares, the proceeds of which are
         attributed to the TCI Group, (ii) the aggregate number of shares of
         Series A Liberty Media Group Common Stock issued or delivered upon
         conversion, exercise or exchange of Convertible Securities (other than
         Pre-Distribution Convertible Securities and Convertible Securities
         which are convertible into or exercisable or exchangeable for
         Committed Acquisition Shares), the proceeds of which are attributed to
         the TCI Group, (iii) the aggregate number of shares of Series A
         Liberty Media Group Common Stock issued or delivered by the
         Corporation as a dividend or distribution to holders of Series A TCI
         Group Common Stock and Series B TCI Group Common Stock, (iv) the
         aggregate number of shares of Series A Liberty Media Group Common
         Stock issued or delivered upon the conversion, exercise or exchange of
         any Convertible Securities (other than Pre-Distribution Convertible
         Securities and Convertible Securities which are convertible into or
         exercisable or exchangeable for Committed Acquisition Shares) issued
         or delivered by the Corporation after the Distribution as a dividend
         or distribution or by reclassification or exchange to holders of
         Series A TCI Group Common Stock and Series B TCI Group Common Stock
         and (v) the aggregate number of shares of Series A Liberty Media Group
         Common Stock (rounded, if necessary, to the nearest whole number),
         equal to the aggregate fair value (as determined by the Board of
         Directors) of assets or properties attributed to the Liberty Media
         Group that are transferred from the Liberty Media Group to the TCI
         Group in consideration of a reduction in the Number of Shares Issuable
         with Respect to the Inter-Group Interest, divided by the Market Value
         of one share of Series A Liberty Media Group Common Stock as of the
         date of such transfer, and

                 (c)      increased by (i) the aggregate number of any shares
         of Series A Liberty Media Group Common Stock and Series B Liberty
         Media Group Common Stock which are retired or otherwise cease to be
         outstanding following their purchase with funds attributed to the TCI
         Group, (ii) a number (rounded, if necessary, to the nearest whole
         number), equal to the fair value (as determined by the Board of
         Directors) of assets or properties, theretofore attributed to the TCI
         Group that are contributed to the Liberty Media Group in consideration
         of an increase in the Number of Shares Issuable with Respect to the
         Inter-Group Interest, divided by the Market Value of one share of
         Series A Liberty Media Group Common Stock as of the date of such
         contribution and (iii) the aggregate number of shares of Series A
         Liberty Media Group Common Stock and Series B Liberty Media Group
         Common Stock into or for which Convertible Securities are deemed to be
         converted, exercised or exchanged pursuant to the last sentence of the
         definition of "TCI Group" in this paragraph 8. The Corporation shall
         not issue or sell shares of Series B Liberty Media Group Common Stock
         in respect of a reduction in the Number of Shares Issuable with
         Respect to the Inter-Group Interest.





                                      -29-
<PAGE>   137
         Whenever a change in the Number of Shares Issuable with Respect to the
Inter-Group Interest occurs, the Corporation shall prepare and file a statement
of such change with the Secretary of the Corporation.

         "Outstanding Interest Fraction", as of any date, shall mean a fraction
the numerator of which is the aggregate number of shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock
outstanding on such date and the denominator of which is the sum of (a) such
aggregate number of shares of Series A Liberty Media Group Common Stock and
Series B Liberty Media Group Common Stock outstanding on such date and (b) the
Number of Shares Issuable with Respect to the Inter-Group Interest as of such
date.

         "Pre-Distribution Convertible Securities" shall mean Convertible
Securities that were outstanding on the record date for the Distribution and
were, prior to such date, convertible into or exercisable or exchangeable for
shares of the Class A Common Stock, par value $1.00 per share, of the
Corporation.

         "Redemption Date" shall mean any date fixed for a redemption or
purchase of shares of Series A Liberty Media Group Common Stock or Series B
Liberty Media Group Common Stock, as set forth in a notice to holders of such
series pursuant to this Certificate.

         "Related Business Transaction" shall mean any Disposition of all or
substantially all of the properties and assets of the Liberty Media Group in
which the Corporation receives as proceeds of such Disposition primarily equity
securities (including, without limitation, capital stock, convertible
securities, partnership or limited partnership interests and other types of
equity securities, without regard to the voting power or contractual or other
management or governance rights related to such equity securities) of the
purchaser or acquiror of such assets and properties of the Liberty Media Group,
any entity which succeeds (by merger, formation of a joint venture enterprise
or otherwise) to such assets and properties of the Liberty Media Group or a
third party issuer, which purchaser, acquiror or other issuer is engaged or
proposes to engage primarily in one or more businesses similar or complementary
to the businesses conducted by the Liberty Media Group prior to such
Disposition, as determined in good faith by the Board of Directors.

         "Subsidiary" shall mean, with respect to any person or entity, any
corporation or partnership 50% or more of whose outstanding voting securities
or partnership interests, as the case may be, are directly or indirectly owned
by such person or entity.

         "TCI Group" shall mean, as of any date:

                 (a)      the interest of the Corporation or any of its
         subsidiaries in all of the businesses in which the Corporation or any
         of its subsidiaries (or any of their predecessors or successors) is or
         has been engaged, directly or indirectly, and the respective assets
         and liabilities of the Corporation or any of its subsidiaries, other
         than any businesses, assets or liabilities of the Liberty Media Group;





                                      -30-
<PAGE>   138

                 (b)      a proportionate interest in the businesses, assets
         and liabilities of the Liberty Media Group equal to the Inter-Group
         Interest Fraction as of such date;

                 (c)      from and after any dividend or other distribution
         with respect to shares of Series A Liberty Media Group Common Stock or
         Series B Liberty Media Group Common Stock (other than a dividend or
         other distribution payable in shares of Series A Liberty Media Group
         Common Stock or Series B Liberty Media Group Common Stock, with
         respect to which adjustment shall be made as provided in clause (a) of
         the definition of "Number of Shares Issuable with Respect to the
         Inter-Group Interest", or in other securities of the Corporation
         attributed to the Liberty Media Group, for which provision shall be
         made as set forth in the penultimate sentence of this definition), an
         amount of assets or properties theretofore included in the Liberty
         Media Group equal to the aggregate amount of such kind of assets or
         properties so paid in respect of such dividend or other distribution
         with respect to shares of Series A Liberty Media Group Common Stock or
         Series B Liberty Media Group Common Stock multiplied by a fraction the
         numerator of which is equal to the Inter-Group Interest Fraction in
         effect immediately prior to the record date for such dividend or other
         distribution and the denominator of which is equal to the Outstanding
         Interest Fraction in effect immediately prior to the record date for
         such dividend or other distribution; and

                 (d)      any assets or properties transferred from the Liberty
         Media Group to the TCI Group;

provided that, from and after any contribution or transfer of any assets or
properties from the TCI Group to the Liberty Media Group, the TCI Group shall
no longer include such assets or properties so contributed or transferred
(other than pursuant to its interest in the businesses, assets and liabilities
of the Liberty Media Group pursuant to clause (b) above). If the Corporation
shall pay a dividend or make any other distribution with respect to shares of
Series A Liberty Media Group Common Stock or Series B Liberty Media Group
Common Stock payable in other securities of the Corporation attributed to the
Liberty Media Group, the TCI Group shall be deemed to hold an amount of such
other securities equal to the amount so distributed multiplied by the fraction
specified in clause (c) of this definition (determined as of a time immediately
prior to the record date for such dividend or other distribution), and to the
extent interest or dividends are paid or other distributions are made on such
other securities so distributed to holders of Series A Liberty Media Group
Common Stock and Series B Liberty Media Group Common Stock, the TCI Group shall
include a corresponding ratable amount of the kind of assets paid as such
interest or dividends or other distributions in respect of such securities so
deemed to be held by the TCI Group. The Corporation may also, to the extent any
such other securities constitute Convertible Securities which are at the time
convertible, exercisable or exchangeable, cause such Convertible Securities
deemed to be held by the TCI Group to be deemed to be converted, exercised or
exchanged (and to the extent the terms of such Convertible Securities require
payment or delivery of consideration in order to effect such conversion,
exercise or exchange, the TCI Group shall in such case no longer include an
amount of the kind of properties or assets required to be paid or delivered as
such consideration for





                                      -31-
<PAGE>   139

the amount of the Convertible Securities deemed converted, exercised or
exchanged as if such Convertible Securities were outstanding), in which case
such Convertible Securities shall no longer be deemed to be held by the TCI
Group or attributed to the Liberty Media Group.

         "TCI Group Available Dividend Amount", as of any date, shall mean
either:  (a) the excess of (i) an amount equal to the total assets of the TCI
Group less the total liabilities (not including preferred stock) of the TCI
Group as of such date over (ii) the aggregate par value of, or any greater
amount determined to be capital in respect of, all outstanding shares of Series
A TCI Group Common Stock, Series B TCI Group Common Stock and each class or
series of Preferred Stock attributed to the TCI Group or (b) in case there is
no such excess, an amount equal to the Corporation Earnings (Loss) Attributable
to the TCI Group (if positive) for the fiscal year in which such date occurs
and/or the preceding fiscal year.

         "Trading Day" shall mean each weekday other than any day on which any
relevant class or series of capital stock of the Corporation is not traded on
the Nasdaq National Market System or in the over-the-counter market."

(IV) SECTION C OF ARTICLE V OF THE RESTATED CERTIFICATE OF INCORPORATION OF THE
CORPORATION IS HEREBY AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

                                   "SECTION C

                              REMOVAL OF DIRECTORS

         Subject to the rights of the holders of any class or series of
Preferred Stock, directors may be removed from office only for cause (as
hereinafter defined) upon the affirmative vote of the holders of 66 2/3% of the
total voting power of the then outstanding shares of Series A TCI Group Common
Stock, Series B TCI Group Common Stock, Series A Liberty Media Group Common
Stock, Series B Liberty Media Group Common Stock and any class or series of
Preferred Stock entitled to vote at an election of directors, voting together
as a single class. Except as may be provided by law, "cause" for removal, for
purposes of this Section C, shall exist only if: (i) the director whose removal
is proposed has been convicted of a felony, or has been granted immunity to
testify in an action where another has been convicted of a felony, by a court
of competent jurisdiction and such conviction is no longer subject to direct
appeal; (ii) such director has become mentally incompetent, whether or not so
adjudicated, which mental incompetence directly affects his ability as a
director of the Corporation, as determined by at least 66 2/3% of the members
of the Board of Directors then in office (other than such director); or (iii)
such director's actions or failure to act have been determined by at least 66
2/3% of the members of the Board of Directors then in office (other than such
director) to be in derogation of the director's duties."





                                      -32-
<PAGE>   140

(V) ARTICLE VIII OF THE RESTATED CERTIFICATE OF INCORPORATION OF THE
CORPORATION IS HEREBY AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

                                 "ARTICLE VIII

                            MEETINGS OF STOCKHOLDERS

                                   SECTION A

                          ANNUAL AND SPECIAL MEETINGS

         Subject to the rights of the holders of any class or series of
Preferred Stock, stockholder action may be taken only at an annual or special
meeting.  Except as otherwise provided in the terms of any class or series of
Preferred Stock or unless otherwise prescribed by law or by another provision
of this Certificate, special meetings of the stockholders of the Corporation,
for any purpose or purposes, shall be called by the Secretary of the
Corporation (i) upon the written request of the holders of not less than 66
2/3% of the total voting power of the outstanding Voting Securities (as
hereinafter defined) or (ii) at the request of at least 75% of the members of
the Board of Directors then in office. The term "Voting Securities" shall
include the Series A TCI Group Common Stock, the Series B TCI Group Common
Stock, the Series A Liberty Media Group Common Stock, the Series B Liberty
Media Group Common Stock and any class or series of Preferred Stock entitled to
vote with the holders of Common Stock generally upon all matters which may be
submitted to a vote of stockholders at any annual meeting or special meeting
thereof.

                                   SECTION B

                            ACTION WITHOUT A MEETING

         Except as otherwise provided in the terms of any class or series of
Preferred Stock, no action required to be taken or which may be taken at any
annual meeting or special meeting of stockholders may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, is specifically denied."





                                      -33-
<PAGE>   141
(VI) ARTICLE IX OF THE RESTATED CERTIFICATE OF INCORPORATION OF THE CORPORATION
IS HEREBY AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

                                  "ARTICLE IX

                ACTIONS REQUIRING SUPERMAJORITY STOCKHOLDER VOTE

         Subject to the rights of the holders of any class or series of
Preferred Stock, the affirmative vote of the holders of at least 66 2/3% of the
total voting power of the then outstanding Voting Securities (as defined in
Section A of Article VIII of this Certificate), voting together as a single
class at a meeting specifically called for such purpose, shall be required in
order for the Corporation to take any action to authorize:

                 (a)      the amendment, alteration or repeal of any provision
         of this Certificate or the addition or insertion of other provisions
         herein;

                 (b)      the adoption, amendment or repeal of any provision of
         the Bylaws of the Corporation; provided, however, that this clause (b)
         shall not apply to, and no vote of the stockholders of the Corporation
         shall be required to authorize, the adoption, amendment or repeal of
         any provision of the Bylaws of the Corporation by the Board of
         Directors in accordance with the power conferred upon it pursuant to
         Section F of Article V of this Certificate;

                 (c)      the merger or consolidation of this Corporation with
         or into any other corporation; provided, however, that this clause (c)
         shall not apply to any merger or consolidation (i) as to which the
         laws of the State of Delaware, as then in effect, do not require the
         consent of this Corporation's stockholders, or (ii) which at least 75%
         of the members of the Board of Directors then in office have approved;

                 (d)      the sale, lease or exchange of all, or substantially
         all, of the property and assets of the Corporation; or

                 (e)      the dissolution of the Corporation.

         All rights at any time conferred upon the stockholders of the
Corporation pursuant to this Certificate are granted subject to the provisions
of this Article IX."

(vii) Upon the effectiveness of this Certificate of Amendment, (a) each share
of the Class A Common Stock, par value $1.00 per share, of the Corporation that
is issued and outstanding (including shares held in the treasury of the
Corporation) shall be redesignated and changed, ipso


                                      -34-

<PAGE>   142

facto and without any other action on the part of the stockholders thereof, into
one share of Series A TCI Group Common Stock and (b) each share of Class B
Common Stock, par value $1.00 per share, of the Corporation that is issued and
outstanding (including shares held in the treasury of the Corporation) shall be
redesignated and changed, ipso facto and without any other action on the part of
the stockholders thereof, into one share of Series B TCI Group Common Stock.

         SECOND: That said amendments were duly adopted by the Board of
Directors of the Corporation, and pursuant to resolution of the Board of
Directors of the Corporation, the annual meeting of the stockholders of the
Corporation was duly called and held, upon notice in accordance with Section
222 of the General Corporation Law of the State of Delaware, at which meeting
the necessary number of shares as required by statute and the Restated
Certificate of Incorporation of the Corporation were voted in favor of said
amendments.

         THIRD: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.





                                      -35-
<PAGE>   143
         IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Amendment this 3rd day of August, 1995.

                                       TELE-COMMUNICATIONS, INC.


                                       By: BRENDON R. CLOUSTON
                                       Name: Brendon R. Clouston
                                       Title: Executive Vice President

ATTEST:


By: STEPHEN M. BRETT
Name: Stephen M. Brett
Title: Secretary





<PAGE>   144
                              STATE OF DELAWARE
                      OFFICE OF THE SECRETARY OF STATE
                                      
                           ------------------------
                                      
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE THIRD 
DAY OF AUGUST, A.D. 1995, AT 12:46 O'CLOCK P.M.

A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT COUNTY
RECORDER OF DEEDS FOR RECORDING.



                                                        EDWARD J. FREEL 
                                                  ---------------------------- 
                                                        Edward J. Freel,
                                                       Secretary of State

                                                  AUTHENTICATION: 7596126

                                                  DATE: 08-03-95


<PAGE>   145
                                                           STATE OF DELAWARE
                                                          SECRETARY OF STATE
                                                       DIVISION OF CORPORATIONS
                                                       FILED 12:46 PM 08/03/1995
                                                          950175234 - 2371729

                            TELE-COMMUNICATIONS, INC.

                           CERTIFICATE OF DESIGNATION

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

                      SETTING FORTH A COPY OF A RESOLUTION
                      CREATING AND AUTHORIZING THE ISSUANCE
                    OF A SERIES OF PREFERRED STOCK DESIGNATED
            AS "CONVERTIBLE REDEEMABLE PARTICIPATING PREFERRED STOCK,
                   SERIES F" ADOPTED BY THE BOARD OF DIRECTORS
                          OF TELE-COMMUNICATIONS, INC.

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

                 The undersigned Executive Vice President of
Tele-Communications, Inc., a Delaware corporation (the "Corporation"), hereby
certifies that the Board of Directors of the Corporation duly adopted the
following resolutions creating a series of preferred stock designated as
"Convertible Redeemable Participating Preferred Stock, Series F":

                 BE IT RESOLVED, that pursuant to authority expressly granted by
the provisions of Article IV, Section D of the Restated Certificate of
Incorporation of the Corporation, the Board of Directors hereby creates and
authorizes the issuance of a series of preferred stock, par value $.01 per
share, of the Corporation, to consist of 500,000 shares, and hereby fixes the
designations, dividend rights, voting powers, rights on liquidation, conversion
rights, redemption rights and other preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions of the shares of such series (in addition to the designations,
preferences and relative, participating, limitations or restrictions thereof set
forth in the Restated Certificate of Incorporation that are applicable to
preferred stock of all series) as follows:

                 1. Designation. The designation of the series of preferred
stock, par value $.01 per share, of the Corporation authorized hereby is
"Convertible Redeemable Participating Preferred Stock, Series F" (the "Series F
Preferred Stock").

                 2. Certain Definitions. Unless the context otherwise requires,
the terms defined in this paragraph 2 shall have, for all purposes, the meanings
herein specified:


<PAGE>   146



                 "Average Quoted Price", when used with respect to the Series A
TCI Group Common Stock, shall mean the average of the Quoted Prices of the
Series A TCI Group Common Stock for the most recent period of five trading days
on which shares of such series trade ending three Business Days prior to the
Redemption Date, appropriately adjusted to take into account the actual
occurrence, during the period following the first of such five trading days and
ending on the Business Day immediately preceding such Redemption Date, of any
event of a type described in paragraph 7. The "Quoted Price" of a share of
Series A TCI Group Common Stock on any day means the last sale price (or, if no
sale price is reported, the average of the high and low bid prices) of the
Series A TCI Group Common Stock, on such day as reported on the National
Association of Securities Dealers, Inc. Automated Quotation System, Inc.
("NASDAQ") or if the Series A TCI Group Common Stock is listed on an exchange,
as reported in the composite transactions for the principal exchange on which
such stock is listed.

                 "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 Denver, Colorado are not required to
be open.

                 "capital stock" shall mean any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock.

                 "Certificate" shall mean the Restated Certificate of
Incorporation of the Corporation, as it may from time to time hereafter be
amended or restated.

                 "Class A Preferred Stock" shall mean the Class A Preferred
Stock, par value $.01 per share, of the Corporation.

                 "Class B Preferred Stock" shall mean the Class B 6% Cumulative
Redeemable Exchangeable Junior Preferred Stock, par value $.01 per share, of the
Corporation.

                 "Conversion Rate" shall have the meaning ascribed to such term
in paragraph 7(b) hereof.

                 "Convertible Securities" shall mean securities, other than the
Series B TCI Group Common Stock, that are convertible into or exchangeable for
Series A TCI Group Common Stock; provided, however, that neither the Series A
Liberty Media Group Common Stock nor the Series B Liberty Media Group Common
Stock shall be deemed to be a Convertible Security by virtue of the
Corporation's right to cause the outstanding shares of each such series of
Liberty Media Group Common Stock to be converted into Series A TCI Group Common
Stock and Series B TCI Group Common Stock, respectively, in accordance with
paragraphs 2(c) or 5(b)(iii) of Section E of Article IV of the Certificate.

                                       -2-


<PAGE>   147



                 "Cut-Off Date" shall have the meaning ascribed to such term in
paragraph 7(a) hereof. 

                 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

                 "Issue Date" shall mean the date on which shares of Series F
Preferred Stock are first issued.

                 "Junior Stock" shall mean (i) the TCI Group Common Stock, (ii)
the Liberty Media Group Common Stock, (iii) the Class B Preferred Stock, (iv)
any other class or series of capital stock, whether now existing or hereafter
created, of the Corporation, other than (A) the Series F Preferred Stock, (B)
any class or series of Parity Stock (except to the extent provided under clause
(v) hereof) and (C) any Senior Stock, and (v) any class or series of Parity
Stock to the extent that it ranks junior to the Series F Preferred Stock as to
dividend rights, rights of redemption or rights on liquidation, as the case may
be. For purposes of clause (v) above, a class or series of Parity Stock shall
rank junior to the Series F Preferred Stock as to dividend rights, rights of
redemption or rights on liquidation if the holders of shares of Series F
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.

                 "Liberty Media Group Common Stock" shall mean, collectively,
the Series A Liberty Media Group Common Stock and the Series B Liberty Media
Group Common Stock.

                 "Liquidation Preference" per share of Series F Preferred Stock
shall be $.01.

                 "1933 Act" shall mean the Securities Act of 1933, as amended.

                 "Officers' Certificate" shall mean a certificate signed by the
Chairman of the Board or the President of the Corporation and by the Treasurer
of the Corporation.

                 "Opinion of Counsel" shall mean a written opinion from legal
counsel selected by the Corporation. The counsel may be an employee of or
counsel to the Corporation.

                 "Original Stated Amount" of a share of Series F Preferred Stock
means $24,875.

                 "Parity Stock" shall mean any class or series of capital stock,
whether now existing or hereafter created, of the Corporation ranking on a
parity basis with the Series F Preferred Stock as to dividend rights, rights of
redemption or rights on liquidation. Capital stock of any class or series shall
rank on a parity as to dividend rights, rights of redemption or rights on
liquidation with the Series F 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 different from
those of the Series F 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 
                                       -3-


<PAGE>   148


dividends, redemption prices or liquidation 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 Series F Preferred Stock. No class or
series of capital stock that ranks junior to the Series F Preferred Stock as to
rights on liquidation shall rank or be deemed to rank on a parity basis with the
Series F 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.

                 "Participating Dividend" shall have the meaning ascribed to
such term in paragraph 3(a) hereof.

                 "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, government or agency or political subdivision thereof, or other
entity, whether acting in an individual, fiduciary or other capacity.

                 "Redemption Date" as to any share of Series F Preferred Stock
shall mean the date fixed for redemption of such share by the Board of Directors
of the Corporation pursuant to paragraph 5(a); provided that no such date will
be a Redemption Date unless the applicable Redemption Price is actually paid or
deposited as provided in paragraph 5(d) hereof on such date.

                 "Redemption Price" as to any share of Series F Preferred Stock
which is to be redeemed on any Redemption Date shall mean the Stated Amount
thereof on such Redemption Date.

                 "Senior Stock" shall mean any class or series of capital stock,
whether now existing or hereafter created, of the Corporation ranking prior to
the Series F 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 Series F 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 Series F
Preferred Stock. No class or series of capital stock that ranks on a parity
basis with or junior to the Series F Preferred Stock as to rights on liquidation
shall rank or be deemed to rank prior to the Series F 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 Series F Preferred Stock,
unless the instrument creating or evidencing such class or series of capital
stock otherwise expressly provides.

                 "Series A Liberty Media Group Common Stock" shall have the
meaning ascribed to such term in Section E of Article IV of the Certificate.

                 "Series A TCI Group Common Stock" shall mean the Series A TCI
Group Common Stock, par value $1.00 per share, of the Corporation, which term
shall include, where appropriate, 

                                       -4-


<PAGE>   149

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
the Corporation 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; provided, however,
that with respect to any period prior to the date of filing of the amendment to
the Certificate redesignating the Class A Common Stock, par value $1.00 per
share, of the Corporation as "Series A TCI Group Common Stock," such term shall
be deemed to refer to the Class A Common Stock, par value $1.00 per share, of
the Corporation.

                 "Series B Liberty Media Group Common Stock" shall have the
meaning ascribed to such term in Section E of Article IV of the Certificate.

                 "Series B TCI Group Common Stock" shall mean the Series B TCI
Group Common Stock, par value $1.00 per share, of the Corporation, 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 the Corporation 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; provided, however, that with respect to any period
prior to the date of filing of the amendment to the Certificate redesignating
the Class B Common Stock, par value $1.00 per share, of the Corporation as
"Series B TCI Group Common Stock," such term shall be deemed to refer to the
Class B Common Stock, par value $1.00 per share, of the Corporation.

                 "Stated Amount" per share of the Series F Preferred Stock as of
any date in question (the "Determination Date") shall mean an amount equal to
the sum of (a) the Original Stated Amount of such share, plus (b) an amount
equal to all dividends which have been declared on the shares of Series F
Preferred Stock (including, but not limited to, Participating Dividends) but
which, as of the Determination Date, are unpaid. In connection with the
determination of the Stated Amount of a share of Series F Preferred Stock upon
redemption, the Determination Date shall be the applicable date of redemption.

                 "Subsidiary" of any Person 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 such Person and/or one or more Subsidiaries of such Person and (ii) any other
Person (other than a corporation) in which such Person and/or one or more
Subsidiaries of such Person, directly or indirectly, has (x) a majority
ownership interest or (y) the power to elect or direct the election of a
majority of the members of the governing body of such first-named Person.

                 "TCI Group Common Stock" shall mean, collectively, the Series A
TCI Group Common Stock and the Series B TCI Group Common Stock.

                 "TCI Holder" shall mean the Corporation and each Subsidiary of
the Corporation.

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<PAGE>   150



                 3.       Dividends.

                 (a) CASH DIVIDEND RIGHTS. Subject to the prior preferences and
other rights of any Senior Stock and the provisions of paragraph 6 hereof, the
holders of Series F Preferred Stock shall be entitled to receive cash dividends
per share in an amount (the "Participating Dividend") equal to the product of
(x) the amount of the cash dividend declared and to be paid on a single share of
Series A TCI Group Common Stock (or any other security into which the Series F
Preferred Stock is then convertible) and (y) the number of shares of Series A
TCI Group Common Stock (or other security) into which a share of Series F
Preferred Stock may be converted as of the date such dividend is paid. The
Participating Dividends shall be the only dividends payable to holders of Series
F Preferred Stock and such Participating Dividends shall be declared and paid
only when, as and if a cash dividend is declared and paid upon the outstanding
shares of Series A TCI Group Common Stock. Dividends or distributions on the
Series A TCI Group Common Stock which are paid or made in securities, properties
or other assets of the Corporation other than cash shall not constitute
Participating Dividends and holders of Series F Preferred Stock shall have no
rights with respect thereto, other than as may be provided in paragraph 7.
Participating Dividends shall be payable prior and in preference to any dividend
payments to the holders of any Junior Stock. Participating Dividends shall be
payable to holders of record of shares of Series F Preferred Stock as of the
record date for the determination of holders of Series A TCI Group Common Stock
entitled to receive such dividend and shall be payable on the payment date
established by the Corporation for the payment of such cash dividend to holders
of Series A TCI Group Common Stock.

                 (b) METHOD OF PAYMENT. All dividends payable with respect to
the shares of Series F Preferred Stock shall be declared and paid in cash. All
dividends paid with respect to the shares of Series F Preferred Stock pursuant
to this paragraph 3 shall be paid pro rata to all the holders of shares of
Series F Preferred Stock outstanding on the applicable record date.

                 4. Distributions Upon Liquidation, Dissolution or Winding Up.

                    Subject to the prior payment in full of the preferential
amounts to which any Senior Stock is entitled, in the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of Series F Preferred Stock shall be entitled to receive from the
assets of the Corporation available for distribution to stockholders, before any
payment or distribution shall be made to the holders of any Junior Stock, an
amount in cash or property at its fair market value, as determined by the Board
of Directors in good faith, or a combination thereof, per share, equal to the
Liquidation Preference of a share of Series F Preferred Stock as of the date of
payment or distribution, which payment or distribution shall be made pari passu
with any such payment or distribution made to the holders of any Parity Stock
ranking on a parity basis with the Series F Preferred Stock with respect to
distributions upon liquidation, dissolution or winding up of the Corporation.
Following the payment of all amounts owing to holders of each class or series of
capital stock of the Corporation having a preference or priority over the TCI
Group Common Stock as to distributions upon the liquidation, dissolution or
winding up of the Corporation, then the holders of the Series F Preferred
Stock  

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<PAGE>   151

shall be entitled to participate, with the holders of the TCI Group Common
Stock, pro rata, based upon the number of shares of Series A TCI Group Common
Stock into which the shares of Series F Preferred Stock are then convertible, as
to any amounts remaining for distribution to the holders of TCI Group Common
Stock upon the liquidation, dissolution or winding up of the Corporation. If,
upon distribution of the Corporation's assets in liquidation, dissolution or
winding up, the assets of the Corporation to be distributed among the holders of
the Series F Preferred Stock and to all holders of any Parity Stock ranking on a
parity basis with the Series F Preferred Stock with respect to distributions
upon liquidation, dissolution or winding up shall be insufficient to permit
payment in full to such holders of the respective preferential amounts to which
they are entitled, then the entire assets of the Corporation to be distributed
to holders of the Series F Preferred Stock and such Parity Stock shall be
distributed pro rata to such holders based upon the aggregate of the full
preferential amounts to which the shares of Series F Preferred Stock and such
Parity Stock would otherwise respectively be entitled. Neither the consolidation
or merger of the Corporation with or into any other corporation or corporations
nor the sale, transfer or lease of all or substantially all of the assets of the
Corporation shall itself be deemed to be a liquidation, dissolution or winding
up of the Corporation within the meaning of this paragraph 4. Notice of the
liquidation, dissolution or winding up of the Corporation shall be given, not
less than 20 days prior to the date on which such liquidation, dissolution or
winding up is expected to take place or become effective, to the holders of
record of the shares of Series F Preferred Stock.

              5. Redemption.

                 (a) OPTIONAL REDEMPTION. Subject to the rights of any Senior
Stock and the provisions of paragraph 6, the shares of Series F Preferred Stock
may be redeemed, at the option of the Corporation by the action of the Board of
Directors, in whole or from time to time in part, at the Redemption Price on any
Redemption Date occurring on or after the thirtieth Business Day following the
Issue Date. The Redemption Price shall be payable (except as provided in the
last sentence of paragraph 5(c) hereof) only in shares of Series A TCI Group
Common Stock. If less than all outstanding shares of Series F Preferred Stock
are to be redeemed on any Redemption Date, the shares of Series F Preferred
Stock to be redeemed shall be chosen pro rata among all holders of Series F
Preferred Stock. The Corporation shall not be required to register a transfer of
(i) any shares of Series F Preferred Stock for a period of 15 days next
preceding any selection of shares of Series F Preferred Stock to be redeemed or
(ii) any shares of Series F Preferred Stock selected or called for redemption.

                 (b) NOTICE OF REDEMPTION. Notice of redemption shall be given
by or on behalf of the Corporation, not more than 60 days nor less than 30 days
prior to the Redemption Date, to the holders of record of the shares of Series F
Preferred Stock to be redeemed; but no defect in such notice or in the mailing
thereof shall affect the validity of the proceedings for the redemption of any
shares of Series F Preferred Stock. In addition to any information required by
law or by the applicable rules of any national securities exchange or national
interdealer quotation system on which the Series F Preferred Stock may be listed
or admitted to trading or quoted, such notice shall set forth the Redemption
Price, the Redemption Date, the number of shares to be redeemed, the portion of
the Redemption Price, if any, which 
                                       -7-


<PAGE>   152



the Corporation has elected to pay through the issuance of Series A TCI Group
Common Stock and the place at which the shares of Series F Preferred Stock
called for redemption will, upon presentation and surrender of the stock
certificates evidencing such shares, be redeemed. In the event that fewer than
the total number of shares of Series F Preferred Stock represented by a
certificate are redeemed, a new certificate representing the number of
unredeemed shares will be issued to the holder thereof without cost to such
holder.

                 (c) ISSUANCE OF SERIES A TCI GROUP COMMON STOCK. Subject to
compliance with the conditions contained in this paragraph 5(c), the Corporation
shall pay the Redemption Price of the shares of Series F Preferred Stock called
for redemption by issuing to the holder thereof, in respect of its shares to be
redeemed, a number of shares of Series A TCI Group Common Stock equal to the
aggregate Redemption Price (or designated portion thereof) of such shares
divided by the Average Quoted Price of a share of Series A TCI Group Common
Stock. No fractional shares of Series A TCI Group Common Stock or scrip shall be
issued upon such redemption. As to any final fraction of a share of Series A TCI
Group Common Stock that would otherwise be issuable to a holder upon redemption
of his shares of Series F Preferred Stock (determined on the basis of the total
number of such holder's shares of Series F Preferred Stock in respect of which
shares of Series A TCI Group Common Stock are issuable), the Corporation shall
pay an amount in cash or by its check equal to the same fraction of the Average
Quoted Price of a share of Series A TCI Group Common Stock.

                 The Corporation's right to pay the Redemption Price of the
shares of Series F Preferred Stock through the issuance of shares of Series A
TCI Group Common Stock shall be conditioned upon: (i) the Corporation's having
timely given a notice of redemption setting forth such election as provided in
paragraph 5(b); (ii) the Corporation's having obtained and filed, on or before
the Redemption Date, at the office of the redemption agent for the Series F
Preferred Stock (or with the books of the Corporation if there is no redemption
agent) an Opinion of Counsel to the effect that (A) the shares of Series A TCI
Group Common Stock to be issued upon such redemption have been duly authorized
and, when issued and delivered in payment of the Redemption Price of the shares
of Series F Preferred Stock to be redeemed, will be validly issued, fully paid
and non-assessable and free from preemptive rights, (B) that the issuance and
delivery of such shares of Series A TCI Group Common Stock upon such redemption
of shares of Series F Preferred Stock will not violate the laws of the state of
incorporation of the Corporation, and (C) unless at the time the Redemption
Notice is given all shares of the Series F Preferred Stock are owned by one or
more TCI Holders, that the issuance and delivery of the shares of Series A TCI
Group Common Stock upon such redemption of shares of Series F Preferred Stock is
exempt from the registration or qualification requirements of the 1933 Act and
applicable state securities laws or, if no such exemption is available, that the
shares of Series A TCI Group Common Stock to be issued have been duly registered
or qualified under the 1933 Act and such applicable state securities laws; and
(iii) the Corporation's having filed, on or before the Redemption Date, at the
office of such redemption agent (or with the books of the Corporation if there
is no redemption agent), an Officers' Certificate setting forth the number of
shares of Series A TCI Group Common Stock to be issued in payment of the
Redemption Price of each share of Series F Preferred Stock and the method of
determining the same (consistent with the provisions hereof). If the foregoing
conditions have not been satisfied prior to or on the 

                                       -8-


<PAGE>   153



Redemption Date, the Corporation shall pay the Redemption Price for the shares
of Series F Preferred Stock to be redeemed in cash.

                 (d) DEPOSIT OF REDEMPTION PRICE. If notice of any redemption by
the Corporation pursuant to this paragraph 5 shall have been given as provided
in paragraph 5(b) above, and if on or before the Redemption Date specified in
such notice the Corporation shall have deposited with the redemption agent for
the Series F Preferred Stock (or if there is no redemption agent, shall have set
apart so as to be available for such purpose and only such purpose) shares of
Series A TCI Group Common Stock sufficient to redeem in full on the Redemption
Date at the Redemption Price all shares of Series F Preferred Stock called for
redemption and provided that the conditions set forth in paragraph 5(c) have
been satisfied, then effective as of the close of business on the Redemption
Date, the shares of Series F Preferred Stock called for redemption,
notwithstanding that any certificate therefor shall not have been surrendered
for cancellation, shall no longer be deemed outstanding, and the holders thereof
shall cease to be stockholders with respect to such shares, and all rights with
respect to such shares shall forthwith cease and terminate, except the right of
the holders thereof to receive the Series A TCI Group Common Stock (or cash, as
applicable) issuable (or payable) in payment of the Redemption Price of such
shares, without interest, upon the surrender of certificates representing the
same.

                 (e) STATUS OF REDEEMED SHARES. All shares of Series F Preferred
Stock redeemed, exchanged, purchased or otherwise acquired by the Corporation
shall be retired and shall be restored to the status of authorized and unissued
shares of Series Preferred Stock (and may be reissued as part of another series
of the preferred stock of the Corporation, but such shares shall not be reissued
as Series F Preferred Stock).

                 6.       Limitations on Dividends and Redemptions.

         If at any time the Corporation shall have declared a dividend on the
Series F Preferred Stock and failed to pay or set aside consideration sufficient
to pay such dividend, or if the Corporation declares a cash dividend on the
shares of Series A TCI Group Common Stock and fails to pay or set aside the
Participating Dividend required to be paid to the holders of the Series F
Preferred Stock, then (i) the Corporation shall not declare or pay any dividend
on or make any distribution with respect to any Parity Stock or Junior Stock or
set aside any money or assets for any such purpose until such dividend payable
to the holders of Series F Preferred Stock has been paid or consideration
sufficient to pay such dividend has been set aside for such purpose, and (ii)
neither the Corporation nor any Subsidiary thereof shall redeem, exchange,
purchase or otherwise acquire any shares of Series F Preferred Stock, Parity
Stock or Junior Stock, or set aside any money or assets for any such purpose,
pursuant to paragraph 5 hereof, a sinking fund or otherwise, unless all then
outstanding shares of any class or series of Parity Stock that by the terms of
the instrument creating or evidencing such Parity Stock is required to be
redeemed under such circumstances are redeemed or exchanged pursuant to the
terms hereof and thereof.


                                       -9-


<PAGE>   154



                 If the Corporation shall fail to redeem on any date fixed for
redemption or exchange pursuant to paragraph 5 hereof any shares of Series F
Preferred Stock called for redemption on such date, and until such shares are
redeemed in full, the Corporation shall not redeem or exchange any Parity Stock
or Junior Stock or declare or pay any dividend on or make any distribution with
respect to any Junior Stock, or set aside any money or assets for any such
purpose, and neither the Corporation nor any Subsidiary thereof shall purchase
or otherwise acquire any Series F Preferred Stock, Parity Stock or Junior Stock,
or set aside any money or assets for any such purpose.

                 Neither the Corporation nor any Subsidiary thereof shall
redeem, exchange, purchase or otherwise acquire any Parity Stock or Junior
Stock, or set aside any money or assets for any such purpose, if after giving
effect to such redemption, exchange, purchase or other acquisition, the amount
(as determined by the Board of Directors in good faith) that would be available
for distribution to the holders of the Series F Preferred Stock upon
liquidation, dissolution or winding up of the Corporation if such liquidation,
dissolution or winding up were to occur on the date fixed for such redemption,
exchange, purchase or other acquisition of such Parity Stock or Junior Stock
would be less than the aggregate Liquidation Preference as of such date of all
shares of Series F Preferred Stock then outstanding.

                 Nothing contained in this paragraph 6 shall prevent (i) the
payment of dividends on any Junior Stock solely in shares of Junior Stock or the
redemption, purchase or other acquisition of Junior Stock solely in exchange for
(together with a cash adjustment for fractional shares, if any) shares of Junior
Stock, or (ii) the payment of dividends on any Parity Stock solely in shares of
Parity Stock and/or Junior Stock or the redemption, exchange, purchase or other
acquisition 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, shares of Parity Stock and/or Junior Stock.

                 All provisions of this paragraph 6 are for the sole benefit of
the holders of Series F Preferred Stock and accordingly, if the holders of
shares of Series F Preferred Stock shall have waived (as provided in paragraph
9) in whole or in part the benefit of the applicable provisions, either
generally or in the specific instance, such provision shall not (to the extent
of such waiver, in the case of a partial waiver) restrict the redemption,
exchange, purchase or other acquisition of, or declaration, payment or making of
any dividends or distributions on the Series F Preferred Stock, any Parity Stock
or any Junior Stock.

            7.   Conversion.

                 (a) Unless previously called for redemption as provided in
Section 5 hereof, shares of Series F Preferred Stock shall be convertible, at
the option of the holder thereof, at any time in such manner and upon such terms
and conditions as hereinafter provided in this paragraph 7, into fully paid and
non-assessable full shares of Series A TCI Group Common Stock. No shares of
Series A TCI Group Common Stock shall be issued in respect of the conversion of
the Series F Preferred Stock after the fifteenth Business Day (the "Cut-off
Date") preceding the date fixed for redemption; provided that the conversion of
shares surrendered for 

                                      -10-


<PAGE>   155



conversion in accordance with this paragraph 7 after the Cut-off Date shall be
given effect as of the date of such surrender if the Redemption Price to be
paid, or to be irrevocably set apart in trust for the benefit of the holders of
shares to be so redeemed, has not been paid or so set apart on or before such
date fixed for redemption. In case cash, securities or property other than
Series A TCI Group Common Stock shall be payable, deliverable or issuable upon
conversion as provided herein, then all references to Series A TCI Group Common
Stock in this paragraph 7 shall be deemed to apply, so far as appropriate and as
nearly as may be, to such cash, property or other securities

                 (b) Subject to the provisions for adjustment hereinafter set
forth in this paragraph 7, the Series F Preferred Stock may be converted into
Series A TCI Group Common Stock at the initial conversion rate of 1,000 fully
paid and non-assessable shares of Series A TCI Group Common Stock for one share
of the Series F Preferred Stock. (This conversion rate as from time to time
adjusted cumulatively pursuant to the provisions of this paragraph is
hereinafter referred to as the "Conversion Rate").

                 (c) In case after the Issue Date the Corporation shall (i) pay
a dividend or make a distribution on its outstanding shares of Series A TCI
Group Common Stock in shares of Series A TCI Group Common Stock, (ii) subdivide
the then outstanding shares of Series A TCI Group Common Stock into a greater
number of shares of Series A TCI Group Common Stock, (iii) combine the then
outstanding shares of Series A TCI Group Common Stock into a smaller number of
shares of Series A TCI Group Common Stock, or (iv) issue by reclassification of
its shares of Series A TCI Group Common Stock any shares of any other class of
capital stock of the Corporation (including any such reclassification in
connection with a merger in which the Corporation is the continuing
corporation), then the Conversion Rate in effect immediately prior to the
opening of business on the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be
adjusted so that the holder of each share of Series F Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Series A TCI Group Common Stock (and the number and kind of other securities)
that such holder would have owned or been entitled to receive immediately
following such action had such shares of Series F Preferred Stock been converted
immediately prior to such time. An adjustment made pursuant to this paragraph
7(c) for a dividend or distribution shall become effective immediately after the
record date for the dividend or distribution and an adjustment made pursuant to
this paragraph 7(c) for a subdivision, combination or reclassification shall
become effective immediately after the effective date of the subdivision,
combination or reclassification. Such adjustment shall be made successively
whenever any action listed above shall be taken.

                 (d) In case the Corporation shall after the Issue Date issue
any rights or warrants to all holders of shares of Series A TCI Group Common
Stock entitling them (for a period expiring within 45 days after the record date
for the determination of stockholders entitled to receive such rights or
warrants) to subscribe for or purchase shares of Series A TCI Group Common Stock
(or Convertible Securities) at a price per share of Series A TCI Group Common
Stock (or having an initial exercise price or conversion price per share of
Series A TCI Group Common Stock) less than the then current market price per
share of Series A TCI Group 

                                      -11-


<PAGE>   156


Common Stock (as determined in accordance with the provisions of paragraph 7(f)
below) on such record date, the number of shares of Series A TCI Group Common
Stock into which each share of Series F Preferred Stock shall thereafter be
convertible shall be determined by multiplying the number of shares of Series A
TCI Group Common Stock into which such share of Series F Preferred Stock was
theretofore convertible immediately prior to such record date 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 offered for subscription or purchase (or into
which the Convertible Securities so offered are initially 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 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 initial
conversion or exercise price of the Convertible Securities so offered) would
purchase at the then current market price per share of Series A TCI Group Common
Stock (as determined in accordance with the provisions of paragraph 7(f) below)
on such record date. Such adjustment shall be made successively whenever any
such rights or warrants are issued and shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
rights or warrants. In the event that all of the shares of Series A TCI Group
Common Stock (or all of the Convertible Securities) subject to such rights or
warrants have not been issued when such rights or warrants expire (or, in the
case of rights or warrants to purchase Convertible Securities which have been
exercised, all of the shares of Series A TCI Group Common Stock issuable upon
conversion of such Convertible Securities have not been issued prior to the
expiration of the conversion right thereof), then the Conversion Rate shall be
readjusted retroactively to be the Conversion Rate which would then be in effect
had the adjustment upon the issuance of such rights or warrants been made on the
basis of the actual number of shares of Series A TCI Group Common Stock (or
Convertible Securities) issued upon the exercise of such rights or warrants (or
the conversion of such Convertible Securities); but such subsequent adjustment
shall not affect the number of shares of Series A TCI Group Common Stock issued
upon the conversion of any share of Series F Preferred Stock prior to the date
such subsequent adjustment is made.

                 (e) In case the Corporation shall distribute after the Issue
Date to all holders of shares of Series A TCI Group Common Stock (including any
such distribution made in connection with a merger in which the Corporation is
the continuing corporation, other than a merger to which paragraph 7(g) is
applicable) any securities, evidences of its indebtedness or assets (other than
cash dividends or Series A TCI Group Common Stock in respect of which an
adjustment is made pursuant to paragraph 7(c) hereof) or rights or warrants to
purchase shares of Series A TCI Group Common Stock or securities convertible
into shares of Series A TCI Group Common Stock (excluding those referred to in
paragraph 7(d) above), then in each such case the number of shares of Series A
TCI Group Common Stock into which each share of Series F Preferred Stock shall
thereafter be convertible shall be determined by multiplying the number of
shares of Series A TCI Group Common Stock into which such share was theretofore
convertible immediately prior to the record date for the determination of
stockholders entitled to receive the distribution by a fraction of which the
numerator shall be the then current market price per share of Series A TCI Group
Common Stock (as determined in accordance with the 

                                      -12-


<PAGE>   157


provisions of paragraph 7(f) below) on such record date and of which the
denominator shall be such current market price per share of Series A TCI Group
Common Stock less the fair market value on such record date (as determined by
the Board of Directors of the Corporation, whose determination shall be
conclusive) of the portion of the securities, assets or evidences of
indebtedness or rights or warrants so to be distributed applicable to one share
of Series A TCI Group Common Stock. Such adjustment shall be made successively
whenever any such distribution is made and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such distribution.

                 (f) For the purpose of any computation under paragraph 7(d),
(e) or (k), the current market price per share of Series A TCI Group Common
Stock at any date shall be deemed to be the average of the daily closing prices
for a share of Series A TCI Group Common Stock for the ten (10) consecutive
trading days before the day in question, appropriately adjusted to take into
account the actual occurrence during such period of any of the events specified
in paragraph 7(c) hereof. The closing price for each day shall be the last
reported sale price regular way or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices regular way,
in either case on the composite tape, or if the shares of Series A TCI Group
Common Stock are not quoted on the composite tape, on the principal United
States securities exchange registered under the Exchange Act on which the shares
of Series A TCI Group Common Stock are listed or admitted to trading, or if they
are not listed or admitted to trading on any such exchange, the last reported
sale price (or the average of the quoted closing bid and asked prices if there
were no reported sales) as reported by NASDAQ or any comparable system, or if
the Series A TCI Group Common Stock is not quoted on NASDAQ or any comparable
system, the average of the closing bid and asked prices as furnished by any
member of the National Association of Securities Dealers, Inc. selected from
time to time by the Corporation for that purpose or, in the absence of such
quotations, such other method of determining market value as the Board of
Directors shall from time to time deem to be fair. With respect to any
calculation of the current market price per share of Series A TCI Group Common
Stock relating to any period prior to the redesignation of the Corporation's
Class A Common Stock, par value $1.00 per share, into Series A TCI Group Common
Stock, such current market price shall be calculated based upon the closing
price of a share of such Class A Common Stock of the Corporation for periods
prior to such redesignation.

                 (g) In case of any reclassification or change in the Series A
TCI Group Common Stock (other than any reclassification or change referred to in
paragraph 7(c) and other than a change in par value) or in case of any
consolidation of the Corporation with any other corporation or any merger of the
Corporation into another corporation or of another corporation into the
Corporation (other than a merger in which the Corporation is the continuing
corporation and which does not result in any reclassification or change (other
than a change in par value or any reclassification or change to which paragraph
7(c) is applicable) in the outstanding Series A TCI Group Common Stock), or in
case of any sale or transfer to another corporation or entity (other than by
mortgage or pledge) of all or substantially all of the properties and assets of
the Corporation, in any such case after the Issue Date, the Corporation (or its
successor in such consolidation or merger) or the purchaser of such properties
and assets shall make appropriate provision so that the holder of a share of
Series F Preferred Stock shall have the right thereafter 

                                      -13-


<PAGE>   158




to convert such share into the kind and amount of shares of stock and other
securities and property that such holder would have owned immediately after such
reclassification, change, consolidation, merger, sale or transfer if such holder
had converted such share of Series F Preferred Stock into Series A TCI Group
Common Stock immediately prior to the effective date of such reclassification,
change, consolidation, merger, sale or transfer (assuming for this purpose (to
the extent applicable) that such holder failed to exercise any rights of
election and received per share of Series A TCI Group Common Stock the kind and
amount of shares of stock and other securities and property received per share
by a plurality of the non-electing shares), and the holders of the Series F
Preferred Stock shall have no other conversion rights under these provisions;
provided, that effective provision shall be made, in the Articles or Certificate
of Incorporation of the resulting or surviving corporation or otherwise or in
any contracts of sale or transfer, so that the provisions set forth herein for
the protection of the conversion rights of the Series F Preferred Stock shall
thereafter be made applicable, as nearly as reasonably may be practicable, to
any such other shares of stock and other securities and property deliverable
upon conversion of the Series F Preferred Stock remaining outstanding or other
convertible preferred stock or other Convertible Securities received by the
holders of Series F Preferred Stock in place thereof; and provided, further,
that any such resulting or surviving corporation or purchaser shall expressly
assume the obligation to deliver, upon the exercise of the conversion privilege,
such shares, securities or property as the holders of the Series F Preferred
Stock remaining outstanding, or other convertible preferred stock or other
convertible securities received by the holders in place thereof, shall be
entitled to receive pursuant to the provisions hereof, and to make provisions
for the protection of the conversion rights as above provided.

                 (h) Whenever the Conversion Rate or the conversion privilege
shall be adjusted as provided in paragraphs 7(c), (d), (e) or (g), the
Corporation shall promptly cause a notice to be mailed to the holders of record
of the Series F Preferred Stock describing the nature of the event requiring
such adjustment, the Conversion Rate in effect immediately thereafter and the
kind and amount of stock or other securities or property into which the Series F
Preferred Stock shall be convertible after such event. Where appropriate, such
notice may be given in advance and included as a part of a notice required to be
mailed under the provisions of paragraph 7(j).

                 (i) The Corporation may, but shall not be required to, make any
adjustment of the Conversion Rate if such adjustment would require an increase
or decrease of less than 1% in such Conversion Rate; provided, however, that any
adjustments which by reason of this paragraph 7(i) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this paragraph 7 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. In any case in which this
paragraph 7(i) shall require that an adjustment shall become effective
immediately after a record date for such event, the Corporation may defer until
the occurrence of such event (x) issuing to the holder of any shares of Series F
Preferred Stock converted after such record date and before the occurrence of
such event the additional shares of Series A TCI Group Common Stock or other
capital stock issuable upon such conversion by reason of the adjustment required
by such event over and above the shares of Series A TCI Group Common Stock or
other capital stock issuable upon such conversion before giving effect to such
adjustment and (y) paying to such 

                                      -14-


<PAGE>   159


holder cash in lieu of any fractional interest to which such holder is entitled
pursuant to paragraph 7(n); provided, however, that, if requested by such
holder, 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 or other capital stock, and such cash,
upon the occurrence of the event requiring such adjustment.

                 (j)     In case at any time:

                                  (i) the Corporation shall take any action
                 which would require an adjustment in the Conversion Rate
                 pursuant to this paragraph;

                                  (ii) there shall be any capital reorganization
                 or reclassification of the Series A TCI Group Common Stock
                 (other than a change in par value), or any consolidation or
                 merger to which the Corporation is a party and for which
                 approval of any shareholders of the Corporation is required, or
                 any sale, transfer or lease of all or substantially all of the
                 properties and assets of the Corporation; or

                                  (iii) there shall be a voluntary or
                 involuntary dissolution, liquidation or winding up of the
                 Corporation;

then, in any such event, the Corporation shall give written notice, in the
manner provided in herein, to the holders of the Series F Preferred Stock at
their respective addresses as the same appear on the books of the Corporation,
at least twenty days (or ten days in the case of a recommended tender offer as
specified in clause (ii) above) prior to any record date for such action,
dividend or distribution or the date as of which it is expected that holders of
Series A TCI Group Common Stock of record shall be entitled to exchange their
shares of Series A TCI Group Common Stock for securities or other property, if
any, deliverable upon such reorganization, reclassification, consolidation,
merger, sale, transfer, lease, dissolution, liquidation or winding up; provided,
however, that any notice required by any event described in clause (ii) of this
paragraph 7(j) shall be given in the manner and at the time that such notice is
given to the holders of Series A TCI Group Common Stock. Without limiting the
obligations of the Corporation to provide notice of corporate actions hereunder,
the failure to give the notice required by this paragraph 7(j) or any defect
therein shall not affect the legality or validity of any such corporate action
of the Corporation or the vote upon such action.

                 (k) Each share of Series F Preferred Stock that ceases to be
owned, of record and beneficially, by a TCI Holder will automatically be
converted without action by the holder thereof into shares of Series A TCI Group
Common Stock at the then applicable Conversion Rate; such conversion shall be
deemed effective immediately prior to the transfer or other event resulting in
such shares of Series F Preferred Stock ceasing to be held of record and
beneficially by a TCI Holder. A pledge or other grant of a security interest in
shares of Series F Preferred Stock shall not be deemed to constitute a direct or
indirect transfer of such shares or another event causing such automatic
conversion until such time as the pledgee or other holder of a security interest
initiates any action for the purpose of exercising on such pledge or security 

                                      -15-
<PAGE>   160


interest or foreclosing upon the pledged securities, and from and after the time
of such transfer or other event such shares of Series F Preferred Stock will be
deemed to represent only the right to receive the number of shares of Series A
TCI Group Common Stock issuable upon such conversion.

                 (l) Before any holder of Series F Preferred Stock shall be
entitled to convert the same into Series A TCI Group Common Stock, such holder
shall surrender the certificate or certificates for such Series F Preferred
Stock at the office of the Corporation or at the office of the transfer agent
for the Series F Preferred Stock, which certificate or certificates, if the
Corporation shall so request, shall be duly endorsed to the Corporation or in
blank or accompanied by proper instruments of transfer to the Corporation or in
blank (such endorsements or instruments of transfer to be in form satisfactory
to the Corporation), and shall give written notice to the Corporation at said
office that such holder elects to convert all or a part of the shares
represented by said certificate or certificates in accordance with the terms of
this paragraph 7 (except that no such written notice shall be necessary in the
event of an automatic conversion pursuant to paragraph 7(k) hereof), and shall
state in writing therein the name or names in which such holder wishes the
certificates for Series A TCI Group Common Stock to be issued. Every such notice
of election to convert shall constitute a contract between the holder of such
Series F Preferred Stock and the Corporation, whereby the holder of such Series
F Preferred Stock shall be deemed to subscribe for the amount of Series A TCI
Group Common Stock which such holder shall be entitled to receive upon
conversion of the number of shares of Series F Preferred Stock to be converted,
and, in satisfaction of such subscription, to deposit the shares of Series F
Preferred Stock to be converted, and thereby the Corporation shall be deemed to
agree that the surrender of the shares of Series F Preferred Stock to be
converted shall constitute full payment of such subscription for Series A TCI
Group Common Stock to be issued upon such conversion. The Corporation will as
soon as practicable after such deposit of a certificate or certificates for
Series F Preferred Stock, accompanied by the written notice and the statement
above prescribed, issue and deliver at the office of the Corporation or of said
transfer agent to the Person for whose account such Series F Preferred Stock was
so surrendered, or to his nominee(s) or, subject to compliance with applicable
law, transferee(s), a certificate or certificates for the number of full shares
of Series A TCI Group Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share as hereinafter provided.
If surrendered certificates for Series F Preferred Stock are converted only in
part, the Corporation will issue and deliver to the holder, or to his
nominee(s), without charge therefor, a new certificate or certificates
representing the aggregate of the unconverted shares. Such conversion shall be
deemed to have been made as of the date of such surrender of the Series F
Preferred Stock to be converted or, in the case of an automatic conversion
pursuant to paragraph 7(k) hereof, as of the date of the transfer or other event
resulting in such automatic conversion, and the Person or Persons entitled to
receive the Series A TCI Group Common Stock issuable upon conversion of such
Series F Preferred Stock shall be treated for all purposes as the record holder
or holders of such Series A TCI Group Common Stock on such date.

                 Upon the conversion of any share, the Corporation shall pay, to
the holder of record of such share of Series F Preferred Stock, dividends on
such share which have been declared but have not been paid as of the date of the
surrender of such share for conversion or 

                                      -16-


<PAGE>   161



the date such automatic conversion shall have been deemed to take place. Such
payment shall be made in cash or, at the election of the Corporation, the
issuance of certificates representing such number of shares of Series A TCI
Group Common Stock as have an aggregate current market price (as determined in
accordance with paragraph 7(f)) on the date of issuance equal to the amount of
such unpaid dividends. Upon the making of such payment to the Person entitled
thereto as determined pursuant to the first sentence of this paragraph, no
further dividends shall accrue on such share or be payable to any other Person.

                 The issuance of certificates for shares of Series A TCI Group
Common Stock upon conversion of shares of Series F Preferred Stock shall be made
without charge for any issue, stamp or other similar tax in respect of such
issuance; provided, however, if any such certificate is to be issued in a name
other than that of the registered holder of the share or shares of Series F
Preferred Stock converted, the Person or Persons requesting the issuance thereof
shall pay to the Corporation the amount of any such tax which may be payable in
respect of any transfer involved in such issuance or shall establish to the
satisfaction of the Corporation that such tax has been paid.

                 The Corporation shall not be required to convert any shares of
Series F Preferred Stock, and no surrender of Series F Preferred Stock shall be
effective for that purpose, while the stock transfer books of the Corporation
are closed for any purpose; but the surrender of Series F Preferred Stock for
conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if the
conversion had been made on the date such Series F Preferred Stock was
surrendered.

                          (m) The Corporation shall reserve and keep available
at all times thereafter, solely for the purpose of issuance upon conversion of
the outstanding shares of Series F Preferred Stock, such number of shares of
Series A TCI Group Common Stock as shall be issuable upon the conversion of all
outstanding shares of Series F Preferred Stock, provided that nothing contained
herein shall be construed to preclude the Corporation from satisfying its
obligations in respect of the conversion of the outstanding shares of Series F
Preferred Stock by delivery of shares of Series A TCI Group Common Stock which
are held in the treasury of the Corporation. The Corporation shall take all such
corporate and other actions as from time to time may be necessary to insure that
all shares of Series A TCI Group Common Stock issuable upon conversion of shares
of Series F Preferred Stock at the Conversion Rate in effect from time to time
will, upon issue, be duly and validly authorized and issued, fully paid and
nonassessable and free of any preemptive or similar rights, and will be free and
clear of any liens, claims, charges or other encumbrances, except those created
by the holder of the shares of Series F Preferred Stock being converted or the
Person entitled to receive the shares of Series A TCI Group Common Stock
issuable upon such conversion.

                          (n) All shares of Series F Preferred Stock received by
the Corporation upon conversion thereof into Series A TCI Group Common Stock
shall be retired and shall be restored to the status of authorized and unissued
shares of Series F Preferred Stock (and may be reissued as part of another
series of the Preferred Stock of the Corporation), but such shares shall not be
reissued as shares of Series F Preferred Stock.


                                      -17-
<PAGE>   162

                 (o) The Corporation shall not be required to issue fractional
shares of Series A TCI Group Common Stock or scrip upon conversion of the Series
F Preferred Stock. As to any final fraction of a share of Series A TCI Group
Common Stock which a holder of one or more Shares would otherwise be entitled to
receive upon conversion of such Shares in the same transaction, the Corporation
shall pay a cash adjustment in respect of such final fraction in an amount equal
to the same fraction of the market value of a full share of Series A TCI Group
Common Stock. For purposes of this paragraph 7(o), the market value of a share
of Series A TCI Group Common Stock shall be the last reported sale price regular
way on the business day immediately preceding the date of conversion, or, in
case no such reported sale takes place on such day, the average of the reported
closing bid and asked prices regular way on such day, in either case on the
composite tape, or if the shares of Series A TCI Group Common Stock are not
quoted on the composite tape, on the principal United States securities exchange
registered under the Exchange Act on which the shares of Series A TCI Group
Common Stock are listed or admitted to trading, or if the shares of Series A TCI
Group Common Stock are not listed or admitted to trading on any such exchange,
the last reported sale price (or the average of the quoted last reported bid and
asked prices if there were no reported sales) as reported by NASDAQ or any
comparable system, or if the Series A TCI Group Common Stock is not quoted on
NASDAQ or any comparable system, the average of the closing bid and asked prices
as furnished by any member of the National Association of Securities Dealers,
Inc. selected from time to time by the Corporation for that purpose or, in the
absence of such quotations, such other method of determining market value as the
Board of Directors shall from time to time deem to be fair.

            8.   Voting.

                 (a) VOTING RIGHTS. The holders of Series F Preferred Stock
shall have no voting rights whatsoever, except as required by law and except for
the voting rights described in this paragraph 8. Without limiting the generality
of the foregoing, no vote or consent of the holders of Series F Preferred Stock
shall be required for (a) the creation of any indebtedness of any kind of the
Corporation, (b) the creation or designation of any class or series of Senior
Stock, Parity Stock or Junior Stock, or (c) any amendment to the Certificate
that would increase the number of authorized shares of Preferred Stock or the
number of authorized shares of Series F Preferred Stock or that would decrease
the number of authorized shares of Preferred Stock or the number of authorized
shares of Series F Preferred Stock (but not below the number of shares of
Preferred Stock or Series F Preferred Stock, as the case may be, then
outstanding).

                 (b) ELECTION OF DIRECTORS. The holders of the Series F
Preferred Stock will have the right to vote at any annual or special meeting of
stockholders for the purpose of electing directors. Each share of Series F
Preferred Stock shall have one vote for such purpose, and the holders of such
shares shall vote as a single class with any other class or series of capital
stock of the Corporation entitled to vote in any general election of directors,
unless the instrument creating or evidencing such other class or series of
capital stock otherwise expressly provides.


                                      -18-
<PAGE>   163


        9.       Waiver.

                 Any provision which, for the benefit of the holders of Series F
Preferred Stock, prohibits, limits or restricts actions by the Corporation, or
imposes obligations on 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 in
writing of the holders of at least a majority of the number of shares of Series
F Preferred Stock then outstanding (or such greater percentage thereof as may be
required by applicable law or any applicable rules of any national securities
exchange or national interdealer quotation system); provided, however, that no
such waiver shall be binding or be otherwise effective against any holder of
shares of Series F Preferred Stock which does not execute a written consent to
such waiver.

        10.      Method of Giving Notices.

                 Any notice required or permitted hereby to be given to the
holders of shares of Series F Preferred Stock shall be deemed duly given if
deposited in the United States mail, first class mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of the
Corporation or supplied by him in writing to the Corporation for the purpose of
such notice.

        11.      Exclusion of Other Rights. 

                 Except as may otherwise be required by law and except for the
equitable rights and remedies which may otherwise be available to holders of
Series F Preferred Stock, the shares of Series F Preferred Stock shall not have
any designations, preferences, limitations or relative rights other than those
specifically set forth herein.

        12.      Heading of Subdivisions.

                 The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.

                                      -19-


<PAGE>   164



                 FURTHER RESOLVED, that the appropriate officers of the
Corporation are hereby authorized to execute and acknowledge a certificate
setting forth these resolutions and to cause such certificate to be filed and
recorded, in accordance with the requirements of Section 151(g) of the General
Corporation Law of the State of Delaware.

                 IN WITNESS WHEREOF, the undersigned, duly authorized officer
has executed this certificate on this 3rd day of August, 1995.

                                               By: BRENDON R. CLOUSTON
                                               Name: Brendon R. Clouston
                                               Title: Executive Vice President

Attest:  STEPHEN M. BRETT
         Name: Stephen M. Brett
         Title: Secretary

<PAGE>   165
                               State of Delaware
                                                                         PAGE 1

                      OFFICE OF THE SECRETARY OF STATE

                        _______________________________



         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE
TWENTY-FIFTH DAY OF JANUARY, A.D. 1996, AT 3:00 O'CLOCK P.M.

         A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OR DEEDS FOR RECORDING.





                                 [SEAL]
                                                 /s/ EDWARD J. FREEL
                                            ------------------------------------
                                             Edward J. Freel, Secretary of State

                                             AUTHENTICATION:

2371729  8100                                          DATE:  7804651

960024220                                                     01-25-96
<PAGE>   166
 
                                                           STATE OF DELAWARE
                                                          SECRETARY OF STATE
                                                       DIVISION OF CORPORATIONS
                                                       FILED 03:00 PM 01/25/1996
                                                          960024220 - 2371729


                           TELE-COMMUNICATIONS, INC.

                          CERTIFICATE OF DESIGNATIONS

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

                       SETTING FORTH A COPY OF RESOLUTION
                     CREATING AND AUTHORIZING THE ISSUANCE
                  OF A SERIES OF PREFERRED STOCK DESIGNATED AS
          "REDEEMABLE CONVERTIBLE TCI GROUP PREFERRED STOCK, SERIES G"
                       ADOPTED BY THE BOARD OF DIRECTORS
                          OF TELE-COMMUNICATIONS, INC.

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

         The undersigned, an executive Vice President of TELE-COMMUNICATIONS,
INC., a Delaware corporation (the "Company"), HEREBY CERTIFIES that the Board
of Directors of the Company on DECEMBER 13, 1995, duly adopted the following
resolutions creating a new series of the Company's Series Preferred Stock:

         "BE IT RESOLVED, that pursuant to authority expressly granted by the
provisions of Article IV, Section D of the Restated Certificate of
Incorporation of the Company, the Board of Directors hereby creates and
authorizes the issuance of a new series of the Company's Series Preferred
Stock, par value $.01 per share (Series Preferred Stock"), and hereby fixes the
powers, designations, dividend rights, voting powers, rights on liquidation,
conversion rights, redemption rights and other preferences and relative, 
participating, optional or other special rights and the qualifications, 
limitations or restrictions of the shares of such series (in addition to the 
powers, designations, preferences and relative, participating, optional or
other special rights and the qualifications, limitations or restrictions
thereof set forth in the Restated Certificate of Incorporation that are
applicable to each class and series of the Company's preferred stock, par value
$.01 per share ("Preferred Stock")) as follows:

         1.  Designation Number of Shares.  The designation of the series of
Series Preferred Stock, par value $.01 per share, of the Company created hereby
shall be "Redeemable Convertible TCI Group Preferred Stock, Series G" ("Series
G Preferred Stock").  The designated number of shares of Series G Preferred
Stock shall be 7,259,380.  Each share of Series G Preferred Stock shall have a 
stated value of $21.60 ("Stated Value").





                                     -1-
<PAGE>   167
         Any shares of Series G Preferred Stock redeemed, converted or
otherwise acquired by the Company shall be retired, shall not be reissued as
shares of Series G Preferred Stock and shall resume the status of authorized
and unissued shares of Series Preferred Stock, without designation  as to
series, until such shares are once more designated as part of a particular
series of Series Preferred Stock by the Board of Directors.

         2.  Certain Definitions.  Unless the context otherwise requires, the
terms defined in this paragraph 2 shall have, for all purposes of this
Certificate of Designations, the meanings herein specified:

         "Anniversary Date" shall mean JANUARY 25, 1997.

         "Average Market Price" as of any Record Date or Special Record Date
for a dividend payment declared by the Board of Directors shall mean the
average of the daily Closing Prices of the Series A TCI Group Common Stock for
the period of ten (10) consecutive trading days ending on the tenth trading day
prior to such Record date or Special Record Date, 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, 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 or
other date fixed for the payment of dividends to which such Record Date or
Special Record Date relates.

         "Board of Directors" shall mean the Board of Directors of the Company,
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
Company 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 not
required to be open.

         "capital stock" shall mean any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock.

         "Class B Preferred Stock" shall mean the Class B 6% Cumulative
Redeemable Exchangeable Junior Preferred Stock, par value $.01 per share, of
the Company.

         "Closing Price" of a share of Series A TCI Group Common Stock or of a
share of Series A Liberty Media Group Common Stock, or of a share of any other
class or series of capital stock of the Company into which the Series G
Preferred Stock may hereafter become convertible pursuant to paragraph 7, on
any day shall mean the last reported per share sale price (or, if no sale price
is reported, the average of the high and low bid prices) of the Series A TCI





                                     -2-
<PAGE>   168
Group Common Stock, the Series A Liberty Media Group Common Stock or such
capital stock, as the case may be, on such day on the Nasdaq Sock Market or as
quoted by the National Quotation Bureau Incorporated or, if the Series A TCI
Group Common Stock, the Series A Liberty Media Group Common Stock or such
capital stock, as applicable, is listed on an exchange, on the principal
exchange on which the Series A TCI Group Common Stock, the Series A Liberty
Media Group Common Stock or such capital stock, as the case may be, is listed.
In the event that no such quotation is available for any day, the Board of
Directors shall be entitled to determine the Closing Price on the basis of such
quotations as it in good faith considers appropriate.

         "Contingency" shall have the meaning set forth in paragraph 3(a).

         "Conversion Date" of a share of Series G Preferred Stock shall mean
the date on which the requirements for conversion of such share set forth in
paragraph 7(b) of this Certificate of designations have been satisfied by the
holder thereof.

         "Conversion Rate" shall mean the kind and amount of securities, assets
or other property that as of any date are issuable or deliverable upon
conversion of a share of Series G Preferred Stock.  The Conversion Rate of a
share of Series G Preferred Stock shall initially be 1.05 shares of Series A
TCI Group Common Stock for each share of Series G Preferred Stock, subject to
adjustment as set forth in paragraph 7 of this Certificate of Designations.  In
the event that pursuant to paragraph 7 the Series G Preferred Stock becomes
convertible into more than one class or series of capital stock of the Company,
the term Conversion 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 conversion of a share of Series
G Preferred Stock.

         "Convertible Securities" shall mean any or all options, warrants,
securities and rights which are convertible into or exercisable or exchangeable
for Series A TCI Group Common Stock at the option of the holder thereof, or
which otherwise entitle the holder thereof to subscribe for, purchase or
otherwise acquire Series A TCI Group Common Stock; provided, however, that such
term shall not include the Series B TCI Group Common Stock.

         "Career 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:

                 (i)  the period of 30 consecutive trading days commencing 45
         trading days before such Determination Date,

                 (ii) the period commencing on the date next succeeding the
         first public announcement of the issuance of rights, warrants or
         options or the distribution in





                                     -3-
<PAGE>   169
         respect of which the Current Market Price is being calculated and
         ending on the last full trading day before such Determination Date,
         and

                (iii)  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 paragraph 7(c)(iv), 7(d)
         or 7(e), 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 paragraph
7(c)(iv), 7(d) or 7(e) (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 7(c)(i), (ii), (iii) or (v) 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 distribution to which paragraph 7(d) or 7(e) 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 distribution to which such
paragraph applies and (ii) the Ex-Dividend date for such rights, warrants or
options or distribution.

         "Dividend Payment Date" shall mean the FIRST day of each FEBRUARY and
AUGUST, commencing with AUGUST 1, 1997, or the next succeeding Business Day if
any such day is not a Business Day.

         "Dividend Period" shall mean the period from the Anniversary Date to
but excluding the first Dividend Payment Date and, thereafter, each semi-annual
period from and including a Dividend Payment Date to but excluding the next
Dividend Payment Date.

         "Exchange Preferred Stock" shall have the meaning set forth in
paragraph 7(g).





                                     -4-
<PAGE>   170
         "Ex-Dividend Date" shall mean the date on which "ex-dividend" trading
commences for a dividend, an issuance of rights, warrants or options or a
distribution to which any of paragraph 7(c), (d), or (e) applies in the
over-the-counter market or on the principal exchange on which the Series A TCI
Group Common Stock is then quoted or listed.

         "Issue Date" shall mean the date on which shares of Series G Preferred
Stock are first issued.

         "Junior Stock" shall mean (i) the TCI Group Common Stock, (ii) the
Liberty Media Group Common Stock, (iii) the Class B Preferred Stock, (iv) any
other class or series of capital stock, whether now existing or hereafter
created, of the Company, other than (A) the Series G Preferred Stock, (B) any
class or series of Parity Stock (except to the extent provided under clause (v)
hereof) and (C) any class or series of Senior Stock, and (v) any class or
series of Parity Stock to the extent that it ranks junior to the Series G
Preferred Stock as to dividend rights, rights of redemption or rights on
liquidation, as the case may be. For purposes of clause (v) above, a class or
series of Parity Stock shall rank junior to the Series G Preferred Stock as to
dividend rights, rights of redemption or rights on liquidation if the holders
of shares of Series G Preferred Stock shall be entitled to dividend payments,
payments on redemption or payments of amounts distributable upon dissolution,
liquidation or winding up of the Company, as the case may be, in preference or
priority to the holders of shares of such class or series of Parity Stock.

         "Liberty Media Group Common Stock" shall mean the Series A Liberty
Media Group Common Stock and the Series B Liberty Media Group Common Stock.

         "Liquidation Preference" measured per share of the Series G Preferred
Stock as of any date in question (the "Relevant Date") shall mean an amount
equal to the sum of (a) the Stated Value of such share, plus (b) an amount
equal to all dividends accrued on such share which pursuant to paragraph 3(d)
of this Certificate of Designations have been added to and remain a part of the
Liquidation Preference as of the Relevant Date, plus (c) for purposes of
determining the amounts payable pursuant to paragraph 4 and paragraph 5 of this
Certificate of Designations and the definition of Redemption Price, an amount
equal to all unpaid dividends accrued on the sum of the amounts specified in
clauses (a) and (b) above during the period from and including the immediately
preceding Dividend Payment Date (or the Anniversary Date if the Relevant Date
is on or prior to the first Dividend Payment Date) to but excluding the
Relevant Date, and, in the case of clauses (b) and (c) hereof, whether or not
such unpaid dividends have been declared or there are any unrestricted funds of
the Company legally available for the payment of dividends.  In connection
with the determination of the Liquidation Preference of a share of Series G
Preferred Stock upon redemption or upon liquidation, dissolution or winding up
of the Company, the Relevant Date shall be the applicable date of redemption or
the date of distribution of amounts payable to stockholders in connection with
any such liquidation, dissolution or winding up.

         "Mirror Preferred Stock" shall have the meaning set forth in paragraph
7(g).





                                     -5-
<PAGE>   171
         "1933 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.

         "Officers' Certificate" shall mean a certificate signed by the
Chairman of the Board, President or any Senior Vice President of the Company
and by the Treasurer or an Assistant Treasurer of the Company.

         "Parity Stock" shall mean any class or series of capital stock,
whether now existing or hereafter created, of the Company ranking on a parity
basis with the Series G 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 Series
G 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 different from those of the Series G
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 Company, 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 Series G Preferred Stock.  No
class or series of capital stock that ranks junior to the Series G Preferred
Stock as to rights on liquidation shall rank or be deemed to rank on a parity
basis with the Series G 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 so provides.  The Series C Preferred
Stock, the Series D Preferred Stock, the Series F Preferred Stock and the
Series H Preferred Stock rank on a parity basis with the Series G Preferred
Stock as to dividend rights, rights of redemption and rights on liquidation and
constitute "Parity Stock" for purposes of this Certificate of Designations.

         "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.

         "Record Date" for the dividends payable on any Dividend Payment Date
shall mean the 15th day of the month preceding the month during which such
Dividend Payment Date shall occur as and if designated by the Board of
Directors.

         "Redeemable Capital Stock" shall have the meaning set forth in
paragraph 7(c).

         "Redemption Date" as to any share of Series G Preferred Stock shall
mean the date fixed for redemption of such share pursuant to paragraph 5(a) or
5(b) of this Certificate of Designations, provided that no such date will be a
Redemption Date unless the applicable Redemption Price is actually paid in full
on such date or the consideration sufficient for the





                                     -6-
<PAGE>   172
payment thereof, and for no other purpose, has been set apart or deposited in
trust as contemplated by paragraph 5(d) of this Certificate of Designations.

         "Redemption Price", as to any share of Series G Preferred Stock that
is to be redeemed on any Redemption Date, shall mean the Liquidation Preference
thereof on such Redemption Date.

         "Redemption Securities" shall have the meaning set forth in paragraph
7(g).

        "Senior Stock" shall mean any class or series of capital stock of the
Company hereafter created ranking prior to the Series G 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 Series G 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 Company, as the case may be, in preference or
priority to the  holders of shares of Series G Preferred Stock.  No class or
series of capital stock that ranks on a parity basis with or junior to the
Series G Preferred Stock as to rights on liquidation shall rank or be deemed to
rank prior to the Series G 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 Series G Preferred Stock, unless the instrument
creating or evidencing such class or series of capital stock otherwise
expressly so provides.

         "Series A Liberty Media Group Common Stock" shall mean the
Tele-Communications, Inc. Series A Liberty Media Group Common Stock, par value
$1.00 per share, which term shall include, where appropriate, in the case of
any reclassification, recapitalization or other change in the Series A Liberty
Media Group Common Stock, or in the case of a consolidation or merger of the
Company with or into another Person affecting the Series A Liberty Media Group
Common Stock, such capital stock to which a holder of Series A Liberty Media
Group Common Stock shall be entitled upon the occurrence of such event.

         "Series A TCI Group Common Stock" shall mean the Tele-Communications,
Inc. Series A TCI Group Common Stock, par value $1.00 per share, 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 the Company 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 Liberty Media Group Common Stock" shall mean the
Tele-Communications, Inc. Series B Liberty Media Group Common Stock, par value
$1.00 per share, which term shall include, where appropriate, in the case of
any reclassification, recapitalization or other change in the Series B Liberty
Media Group Common Stock, or in the case of a





                                     -7-
<PAGE>   173
consolidation or merger of the Company with or into another Person affecting
the Series B Liberty Media Group Common Stock, such capital stock to which a
holder of Series B Liberty Media 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, 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 the Company 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.

         "Series C Preferred Stock" shall mean the Convertible Preferred Stock,
Series C, par value $.01 per share, of the Company.

         "Series D Preferred Stock" shall mean the Convertible Preferred Stock,
Series D, par value $.01 per share, of the Company.

         "Series F Preferred Stock" shall mean the Convertible Redeemable
Participating Preferred Stock, Series F, par value $.01 per share, of the
Company.

         "Series G Preferred Stock" shall have the meaning set forth in
paragraph 1 of this Certificate of Designations.

         "Series H Preferred Stock" shall mean the Redeemable Convertible
Liberty Media Group Preferred Stock, Series H, par value $.01 per share, of the
Company.

         "Special Record Date" hall have the meaning set forth in paragraph
3(d) of this Certificate of Designations.

         "Stated Value" of a share of Series G Preferred Stock shall have the
meaning set forth in paragraph 1 of this Certificate of Designations.

         "Subsidiary" shall mean (i) a corporation (other than the Company) 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 Company and/or one or more Subsidiaries of the Company and (ii) any
other Person (other than a corporation) in which the Company and/or one or more
Subsidiaries of the Company, 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.

         "Target Price" shall initially mean $27 and shall be appropriately
adjusted to take into account any stock dividends on the Series A TCI Group
Common Stock or the Series A Liberty Media Group Common Stock, or any stock
splits, reclassifications or combinations of





                                     -8-
<PAGE>   174
the Series A TCI Group Common Stock or the Series A Liberty Media Group Common
Stock during the period following the Issue Date and ending on the Anniversary
Date or on such earlier date, if any, as of which the Contingency is met.

         "TCI Group Common Stock" shall mean the Series A TCI Group Common
Stock and the Series B TCI Group Common Stock.

         3.  Dividends. 

         (a)     The Contingency.  If the sum of (i) the Closing Price of the
Series A TCI Group Common Stock, plus (ii) one-fourth of the Closing Price of
the Series A Liberty Media Group Common Stock equals or exceeds the Target
Price for any ten (10) consecutive trading days during the period of sixty-five
(65) consecutive trading days ending on and including the last trading day
immediately preceding the Anniversary Date (the "Contingency"), no dividends
will accrue or be payable with respect to the Series G Preferred Stock.

         (b)     Payment.  In the event that the Contingency is not met, and
only in such event, the holders of Series G Preferred Stock shall, subject to
the prior preferences and other rights of any Senior Stock and to the
provisions of paragraph 6 hereof, be entitled to receive, when and as declared
by the Board of Directors out of unrestricted funds legally available therefor,
cumulative dividends, in preference to dividends on any Junior Stock, which
shall accrue as provided herein.  Except as otherwise provided in paragraph
3(d) of this Certificate of Designations, dividends on each share of Series G
Preferred Stock will, if the Contingency is not met, accrue on a daily basis at
the rate of 4% per annum of the Liquidation Preference of such share from and
including the Anniversary Date to but excluding the date on which the
Liquidation Preference or Redemption Price of such share is made available
pursuant to paragraph 4 or 5, respectively, of this Certificate of Designations
or the date of conversion of such share pursuant to paragraph 7 hereof, as
applicable.  Dividends shall accrue as provided herein whether or not such
dividends have been declared and whether or not there are any unrestricted
funds of the Company legally available for the payment of dividends.  Accrued
dividends on the series G Preferred Stock shall be payable semiannually on each
Dividend Payment Date, commencing on AUGUST 1, 1997, to the holders of record
of the Series G Preferred Stock as of the close of business on the applicable
Record Date.  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 in this paragraph 3(b) for the actual number of days
elapsed from and including the Anniversary 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 to be made, based on a
365-day year, and (ii) as of any Dividend Payment Date after the first Dividend
Payment Date, such amount shall be calculated on the basis of such rate per
annum based on a 360-day year of twelve 30-day months.  For so long as the
Liquidation Preference of a share of Series G Preferred Stock is equal to the
Stated Value per share, the amount of the dividend payable per share on the
Dividend Payment Date for each full semi-annual Dividend Period shall be $.432.





                                     -9-
<PAGE>   175
         (c)  Method of Payment.  All dividends payable with respect to the
shares of Series G Preferred Stock may be declared and paid, in the sole
discretion of the Board of Directors, in cash, through the issuance of shares
of Series A TCI Group Common Stock or in any combination of the foregoing.  If
any dividend payment declared by the Board of Directors with respect to the 
shares of Series G Preferred Stock is to be paid in whole or in part through 
the issuance of shares of Series A TCI Group Common Stock, the amount of such 
dividend payment to be paid per share of Series G Preferred Stock in shares of
Series A TCI Group Common Stock (the "Stock Dividend Amount") shall be
satisfied and paid by the delivery to the holders of record of such shares of
Series G Preferred Stock on the Record Date or Special Record Date, as the case
may be, 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 Average
Market Price of a share of Series A TCI Group Common Stock as of such Record
Date or Special Record Date. The Company shall not be required to issue any
fractional share of Series A TCI Group Common Stock to which any holder of
Series G Preferred Stock may become entitled pursuant to this paragraph 3(c). 
The Board of Directors may elect to settle any final fraction of a share of
Series A TCI Group Common Stock which a holder of one or more shares of Series
G Preferred Stock would otherwise be entitled to receive pursuant to this
paragraph 3(c) by having the Company pay to such holder, in lieu of issuing
such fractional share, cash in any amount (rounded upward to the nearest whole
cent) equal to the same fraction of the Average Market Price of a share of
Series A TCI Group Common Stock as of the Record Date or Special Record Date,
as the case may be, for the dividend payment with respect to which such shares
of Series A TCI Group Common Stock are being delivered. Such election, if made,
shall be made as to all holders of Series G Preferred Stock who would otherwise
be entitled to receive a fractional share of Series A TCI Group Common Stock on
the Dividend Payment Date or other date fixed for the payment of such dividend.

         All dividends paid with respect to the shares of Series G Preferred
Stock pursuant to this paragraph 3 shall be paid pro rata to all the holders of
shares of Series G Preferred Stock outstanding on the applicable Record Date or
Special Record Date, as the case may be.

         (d)  Unpaid Dividends.  If on any Dividend Payment Date the Company,
pursuant to applicable law or otherwise, shall be prohibited or restricted from
paying the full dividends to which holders of Series G Preferred Stock, and any
Parity Stock ranking on a parity basis with the Series G Preferred Stock with
respect to the right to receive dividend payments, shall be entitled, the
amount available for such payment pursuant to applicable law and which is not
otherwise restricted (if any) shall be distributed among the holders of Series G
Preferred Stock and any such Parity Stock ratably in proportion to the full
amounts to which they would otherwise be entitled.  On each Dividend Payment
Date, all dividends that have accrued on each share of Series G Preferred
Stock during the Dividend Period ending on such Dividend Payment Date shall, to
the extent not paid on such Dividend Payment Date for any reason (whether or
not such unpaid dividends have been declared or there are any unrestricted
funds of the Company legally available for the payment of dividends), be added
cumulatively to the Liquidation Preference of such share and will remain a
part thereof until such dividends are paid.  The rate per annum at which
dividends accrue in respect of that portion of the Liquidation Preference of





                                     -10-
<PAGE>   176
a share of Series G Preferred Stock that consists of accrued unpaid dividends
that have been added to the Liquidation Preference of such share on a Dividend
Payment Date pursuant to this paragraph 3(d) and remain unpaid on the next
succeeding Dividend Payment Date shall increase to 8.625% per annum from and
after such next succeeding Dividend Payment Date to and including the date on
which the Liquidation Preference or Redemption Price of such share is made
available pursuant to paragraph 4 or 5, respectively, of this Certificate of
Designations or the date of conversion of such share pursuant to paragraph 7
hereof, as applicable, unless the portion of the Liquidation Preference that
consists of such accrued unpaid dividends is earlier declared and paid or an
amount sufficient to pay the same in full is irrevocably set apart in trust for
such purpose.  That portion of the Liquidation Preference of a share of Series
G Preferred Stock that consists of accrued unpaid dividends, together with all
dividends accrued in respect thereof, may be declared an paid at any time
(subject to the rights of any Senior Stock and to the concurrent satisfaction
of any dividend arrearage then existing with respect to any Parity Stock that
ranks on a parity basis with the Series G Preferred Stock as to the payment of
dividends), without reference to any regular Dividend Payment Date, to holders
of record as of the close of business on such date, not more than 45 days nor
less than 10 days preceding the payment date thereof, as may be fixed by the
Board of Directors (the "Special Record Date"). Notice of each Special Record
Date shall be given, not more than 45 days nor less than 10 days prior thereto,
to the holders of record of the shares of Series G Preferred Stock.

         (e)  Credit.  Any dividend payment made on the shares of Series G
Preferred Stock shall first be credited against the earliest accrued but unpaid
dividend due with respect to the shares of Series G Preferred Stock.

         (f)  Authorized Shares.  All shares of Series A TCI Group Common Stock
issued in payment of any dividend on the Series G Preferred Stock shall, when
issued, be duly and validly authorized, fully paid, nonassessable and free from
all preemptive or similar rights; the delivery of such shares shall be made in
compliance  with all applicable Federal and state securities laws, and such
shares shall have been listed for trading on such national securities exchange
or national securities association, if any, on which the Series A TCI Group
Common Stock is then listed.

         4.  Distributions Upon Liquidation, Dissolution or Winding Up.
Subject to the prior payment in full of the preferential amounts to which any
Senior Stock is entitled, in the event of any liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, the holders of
Series G Preferred Stock shall be entitled to receive from the assets of the
Company available for distribution to stockholders before any payment or
distribution shall be made to the holders of any Junior stock, an amount in
cash (or, at the election of the Company, property at its fair market value, as
determined by the Board of Directors in good faith) per share, equal to the
Liquidation Preference of a share of Series G Preferred Stock as of the date of
payment or distribution, which payment or distribution shall be made pari
passu with, and if the Company has elected to pay in property, in the same form
of property as, any such payment or distribution made to the holders of any
Parity Stock ranking on a parity basis with the Series G Preferred Stock with
respect to distributions upon liquidation, dissolution or winding





                                     -11-
<PAGE>   177
up of the Company.  The holders of Series G Preferred Stock shall be entitled
to no other or further distribution of or participation in any remaining assets
of the Company after receiving the Liquidation Preference per share.  If, upon
distribution of the Company's assets in liquidation, dissolution or winding up,
the assets of the Company to be distributed among the holders of the Series G
Preferred Stock and to all holders of any Parity Stock ranking on a parity
basis with the Series G Preferred Stock with respect to distributions upon
liquidation, dissolution or winding up shall be insufficient to permit payment
in full to such holders of the respective preferential amounts to which they
are entitled, then the entire assets of the Company to be distributed to holders
of the Series G Preferred Stock and such Parity Stock shall be distributed pro
rata to such holders based upon the aggregate of the full preferential amounts
to which the shares of Series G Preferred Stock and such Parity Stock would
otherwise respectively be entitled.  Neither the consolidation or merger of the
Company with or into any other corporation or corporations nor the sale,
transfer, or lease of all or substantially all of the assets of the Company
shall itself be deemed a liquidation, dissolution or winding up of the Company
within the meaning of this paragraph 4.  Notice of the liquidation, dissolution
or winding up of the Company shall be given, not less than twenty (20) days
prior to the date on which such liquidation, dissolution or winding up is
expected to take place or become effective to the holders of record of the
shares of Series G Preferred Stock.

         5.  Redemption.

         (a)  Optional Redemption.  Subject to the rights of any Senior Stock
and the provisions of paragraph 6 of this Certificate of Designations, the
shares of Series G Preferred Stock may be redeemed, at the option of the
Company by action of the Board of Directors, in whole or from time to time in
part, on any Business Day occurring on or after FEBRUARY 1, 2001, at the
Redemption Price on the Redemption Date.  If fewer than all of the outstanding
shares of Series G Preferred Stock are to be redeemed on any Redemption Date,
the shares of Series G Preferred Stock to be redeemed shall be chosen by the
Company pro rata (as nearly as may be practicable) among all holders of Series
G Preferred Stock.  The Company shall not be required to register a transfer of
(i) any shares of Series G Preferred Stock for a period of 15 days next
preceding any selection of shares of Series G Preferred Stock to be redeemed or
(ii) any shares of Series G Preferred Stock selected or called for redemption.

         (b)  Mandatory Redemption.  Subject to the rights of any Senior Stock
and the provisions of paragraph 6 of this Certificate of Designations, the
Company shall redeem, out of funds legally available therefor, on FEBRUARY 1,
2016 (or, if such day is not a Business Day, on the first Business Day
thereafter) all shares of Series G Preferred Stock remaining outstanding at the
Redemption Price on the Redemption Date.  If the funds of the Company legally
available for redemption of shares of the Series G Preferred Stock and any
Parity Stock then required to be redeemed are insufficient to redeem the total
number of such shares remaining outstanding, those funds which are legally
available shall, subject to the rights of any Senior Stock and the provisions
of paragraph 6, to be used to redeem the maximum possible number of shares of
Series G Preferred Stock and each such other class or series of Parity Stock.
Subject to the rights of any Senior Stock and the provisions of paragraph 6
hereof, at any time and from time to time





                                     -12-
<PAGE>   178
thereafter when additional funds of the Company are legally available for such
purpose, such funds shall immediately be used to redeem the shares of Series G
Preferred Stock and of each such other class or series of Parity Stock which
were required to be redeemed that the Company 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.

         (c)  Notice of Redemption.  Notice of redemption shall be given by or
on behalf of the Company at least sixty (60) days prior to the Redemption
Date, in the case of a redemption pursuant to paragraph 5(a), and not more than
sixty (60) days nor less than thirty (30) days prior to the Redemption Date, in
the case of the redemption pursuant to paragraph 5(b), to the holders of record
of the shares of Series G Preferred Stock to be redeemed; but no defect in such
notice or in the mailing thereof shall affect the validity of the proceedings
for the redemption of any shares of Series G Preferred Stock.  In addition to
any information required by law or by the applicable rules of any national
securities exchange or national interdealer quotation system on which the
Series G Preferred Stock may be listed or admitted to trading or quoted, such
notice shall set forth the Redemption Price, the Redemption Date, the number of
shares to be redeemed and the place at which the shares called for redemption
will, upon presentation and surrender of the stock certificates evidencing such
shares, be redeemed, and if the Company has elected to deposit the Redemption
Price with a Redemption Agent in accordance with paragraph 5(d), shall state
the name and address of the Redemption Agent and the date on which such deposit
was or will be made.  Such notice shall also set forth the then current
Conversion Rate for the shares of Series G Preferred Stock and the place or
places to which a holder desiring to convert shares of Series G Preferred Stock
should deliver the certificate(s) evidencing such shares, together with such
other documents and instruments as are or may be required pursuant to paragraph
7 of this Certificate of Designations.  In the event that fewer than the total
number of shares of Series G preferred Stock represented by a certificate are
redeemed, a new certificate representing the number of unredeemed shares will
be issued to the holder thereof without cost to such holder.  If the shares of
series G Preferred Stock evidenced by a certificate selected for partial
redemption pursuant to paragraph 5(a) of this Certificate of Designations are
thereafter converted in part pursuant to paragraph 7 hereof, the shares so
converted (as far as may be) will be deemed to be the shares selected for
redemption.

         (d)  Deposit of Redemption Price.  If notice of any redemption by the
Company pursuant to this paragraph 5 shall have been given as provided in
paragraph 5(c) of this Certificate of Designations and if on or before the
Redemption Date specified in such notice an amount in cash sufficient to redeem
in full on the Redemption Date at the Redemption Price all shares of Series G
Preferred Stock called for redemption or required to be redeemed shall have been
set apart so as to be available for such purpose and only for such purpose,
then effective as of the close of business on the Redemption Date, the shares
of Series G Preferred Stock called for redemption, notwithstanding that any
certificate therefor shall not have been surrendered for cancellation, shall no
longer be deemed outstanding, and the holders thereof shall cease to be
stockholders with respect to such shares and all remaining rights with respect
to such shares shall


                                     -13-
<PAGE>   179
forthwith cease and terminate, except the right of the holders thereof to
receive the Redemption Price of such shares, without interest, upon the
surrender of certificates representing the same.

         At its election, the Company on or prior to the Redemption Date (but
no more than ninety (90) days prior to the Redemption Date) may deposit
immediately available funds in an amount equal to the aggregate Redemption
Price of the shares of Series G Preferred Stock called for redemption 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 $450 million (the "Redemption Agent"),
with irrevocable instructions and authority to the Redemption Agent, on behalf
and at the expense of the Company, to mail the notice of redemption 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 the Redemption Date or prior thereto, the Redemption Price of the
shares of Series G 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 Series G 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 the Redemption Date) or the date notice of redemption is mailed, the
shares of Series G 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 convert such shares in
accordance with paragraph 7 prior to the close of business on the Business Day
immediately preceding the Redemption Date.  Any funds so deposited which shall
not be required for the payment of the Redemption Price of any shares of Series
G Preferred Stock to be redeemed because of the conversion of such shares shall
after such conversion be repaid to the Company by the Redemption Agent.  Any
interest accrued on the funds so deposited shall be paid to the Company from
time to time.  Any funds so deposited with the Redemption Agent which shall
remain unclaimed by the holders of such shares of Series G Preferred Stock at
the end of one year after the Redemption Date shall be returned by the
Redemption Agent to the Company, after which repayment the holders of such
shares of Series G Preferred Stock called for redemption shall look only to the
Company for the payment thereof, without interest, unless an applicable escheat
or abandoned property law otherwise requires.

         6.  Limitations on Dividends and Redemptions.  If at any time the
Company shall have failed to pay, or declare and set aside the consideration
sufficient to pay, full cumulative dividends for all prior dividend periods on
any Parity Stock which by the terms of the instrument creating or evidencing
such Parity Stock is entitled to the payment of such cumulative dividends prior
to the redemption, exchange, purchase or other acquisition of the Series G
Preferred Stock, and until full cumulative dividends on such Parity Stock for
all prior dividend periods are paid, or declared and the consideration
sufficient to pay the same in full is set aside so as to be available for such
purpose and no other purpose, neither the Company nor any Subsidiary thereof
shall redeem, exchange, purchase or otherwise acquire any shares of Series





                                     -14-
<PAGE>   180
G Preferred Stock, Parity Stock or Junior Stock, or set aside any money or
assets for any such purpose pursuant to paragraph 5(d) hereof, any sinking fund
or otherwise, unless all then outstanding shares of Series G Preferred Stock,
of such Parity Stock and of any other class or series of parity Stock that by
the terms of the instrument creating or evidencing such parity Stock is
required to be redeemed under such circumstances are redeemed pursuant to the
terms hereof and thereof.

        If at any time the Company shall have failed to pay, or declare and set
aside the consideration sufficient to pay, full cumulative dividends on the
Series G Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date are paid, or declared and the
consideration sufficient to pay the same in full is set aside so as to be
available for such purpose and no other purpose, (i) neither the Company nor
any Subsidiary thereof shall redeem, exchange, purchase or otherwise acquire
any shares of Series G preferred Stock, Parity Stock, or Junior Stock, or set
aside any money or assets for any such purpose pursuant to paragraph 5(d)
hereof, any sinking fund or otherwise, unless all then outstanding shares of
Series G Preferred Stock and of any other class or series of Parity Stock that
by the terms of the instrument creating or evidencing such Parity Stock is
required to be redeemed under such circumstances are redeemed pursuant to the
terms hereof and thereof, and (ii) the Company shall not declare or pay any
dividend on or make any distribution with respect to any Junior stock or parity
Stock or set aside any money or assets for any such purpose, except that the
Company may declare and pay a dividend on any Parity Stock ranking on a parity
basis with the Series G Preferred Stock with respect to the right to receive
dividend payments, contemporaneously with the declaration and payment of a
dividend on the Series G Preferred Stock, provided that such dividends are
declared and paid pro rata so that the amount of dividends declared and paid
per share of Series G Preferred Stock and such Parity Stock shall in all cases
bear to each other the same ratio that accumulated and accrued and unpaid
dividends per share on the Series G Preferred Stock and such Parity Stock bear
to each other.

         If the Company shall fail to redeem on any date fixed for redemption
pursuant to paragraph 5(a) or 5(b) of this Certificate of Designations any
shares of Series G Preferred Stock called for redemption or required to be
redeemed on such date, and until such shares are redeemed in full, the Company
shall not (x) redeem any Junior Stock or, except as provided in paragraph 5(b)
hereof, Parity Stock or (y) declare or pay any dividend on or make any
distribution with respect to any Junior Stock or, except as provided in the
second paragraph of this paragraph 6, parity Stock, or set aside any money or
assets for any such purpose, and neither the Company nor any Subsidiary thereof
shall purchase or otherwise acquire any Series G Preferred Stock, Parity Stock
or Junior Stock, or set aside any money or assets for any such purpose.

         Nothing contained in the first or third paragraph of this paragraph 6
shall prevent (i) the payment of dividends on any Junior Stock solely in shares
of Junior Stock or the redemption, purchase or other acquisition of Junior
Stock solely in exchange for (together with





                                     -15-
<PAGE>   181
a cash adjustment for fractional shares, if any), or (but only in the case of
the first paragraph of this paragraph 6) through the application of the 
proceeds from the sale of, shares of Junior Stock; (ii) the payment of
dividends on any Parity Stock solely in shares of Parity Stock and/or Junior
Stock or the redemption, exchange, purchase or other acquisition of Series G
Preferred Stock or Parity Stock solely in exchange for (together with a cash
adjustment for fractional shares, if any), or (but only in the case of the
first paragraph of this paragraph 6) through the application of the proceeds
from the sale of, shares of Parity Stock and/or Junior Stock; or (iii) the
purchase or acquisition of shares of Series G Preferred Stock pursuant to a
purchase or exchange offer made to all holders of outstanding shares of Series
G Preferred Stock, provided that the terms of the purchase or exchange offer
shall be identical for all shares of Series G Preferred Stock and all accrued
dividends on such shares shall have been paid or shall have been declared and
irrevocably set apart in trust for the benefit of the holders of shares of
Series G Preferred Stock and for no other purpose.

         The provisions of the first paragraph of this paragraph 6 are for the
sole benefit of the holders of Series G Preferred Stock and Parity Stock having
the terms described therein and accordingly, at any time when there are no
shares of any such class or series of Parity Stock outstanding or if the
holders of each such 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 such provisions (either generally or in the specific instance), then
the provisions of the first paragraph of this paragraph 6 shall not (to the
extent waived, in the case of any partial waiver) restrict the redemption,
exchange, purchase or other acquisition of any shares of Series G Preferred
Stock, Parity Stock or Junior Stock.  All other provisions of this paragraph 6
are for the sole benefit of the holders of Series G Preferred Stock and
accordingly, if the holders of shares of Series G Preferred Stock shall have
waived as provided in paragraph 10 of this Certificate of Designations) in
whole or in part the benefit of the applicable provision, either generally or
in the specific instance, such provision shall not (to the extent of such
waiver, in the case of a partial waiver) restrict the redemption, exchange,
purchase or other acquisition of, or declaration, payment or making of any
dividends or distributions on, the Series G Preferred Stock, any Parity Stock
or any Junior Stock.

         7.  Conversion of Series G Preferred Stock.

         (a)  Right to Convert.  Unless previously redeemed as provided in
paragraph 5 of this Certificate of Designations, shares of Series G Preferred
Stock may be converted at the option of the holder thereof, in the manner and
upon the terms and conditions set forth in this paragraph 7, into fully paid
and nonassessable whole shares of Series A TCI Group Common Stock at the
Conversion Rate in effect on the Conversion Date, at any time prior to the
close of business on the Business Day immediately preceding the Redemption Date
for the redemption of shares of Series G Preferred Stock pursuant to paragraph
5(a) or 5(b) of this Certificate of Designations.

         (b)  Mechanics of Conversion.  In order to convert shares of Series G
Preferred Stock, the holder thereof shall surrender the certificate or
certificates representing the shares of





                                      -16-
<PAGE>   182
Series G Preferred Stock to be converted at the office of the Company or the
office of any transfer agent for the Series G Preferred Stock, which
certificate or certificates shall be duly endorsed to the Company in blank (or
accompanied by duly executed instruments of transfer to the Company in blank)
with signatures guaranteed (such endorsements or instruments of transfer to be
in form satisfactory to the Company), together with a written notice to the
Company at said office of the election to convert the same, specifying the
number of shares of Series G Preferred Stock to be converted and the name or
names (with addresses) in which the certificate or certificates for shares of
Series A TCI Group Common Stock are to be issued. 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 Series G Preferred Stock surrendered for conversion,
such holder shall also deliver to the Company a sum sufficient to pay all
taxes, if any, payable in respect of such transfer or evidence satisfactory to
the Company that such taxes have been paid.  Except as provided in the
immediately preceding sentence, the Company shall pay any issue, stamp or other
similar tax in respect of such issuance or delivery.

         The Company shall, as soon as practicable after the Conversion Date,
deliver to the holder of the shares of Series G Preferred Stock so surrendered
for conversion, or to such holder's nominee(s) or, subject to compliance with
applicable law, transferee(s), a certificate or certificates for the number of
whole shares of Series A TCI Group Common Stock to which such holder shall be
entitled, together with cash or its check in lieu of any fractional share as
provided in paragraph 7(o).  If the shares of Series G Preferred Stock
represented by a certificate surrendered for conversion are converted only in
part, the Company will also issue and deliver to the holder, or to such
holder's nominee(s) or, subject to compliance with applicable law,
transferee(s), without charge therefor, a new certificate or certificates
representing in the aggregate the unconverted shares of Series G Preferred
Stock.

         The Person in whose name the certificate for shares of Series A TCI
Group Common Stock is issued upon such conversion 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 Conversion Date; provided,
however, that no surrender of Series G Preferred Stock on any date when the
stock transfer books of the Company 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 on such date, but such surrender shall be
effective (assuming all other requirements of this paragraph 7 have been
satisfied) to constitute such Person or Persons as the record holders 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 conversion shall be at the Conversion Rate in effect on the date
that such shares of Series G Preferred Stock were surrendered for conversion
(and such other requirements satisfied) as if the stock transfer books of the
Company had not been closed on such date.  Upon conversion of shares of Series
G Preferred stock, the rights of the holder of the shares so converted, as a
holder thereof, will cease.





                                     -17-
<PAGE>   183
         Notwithstanding the last sentence of the immediately preceding
paragraph, if the Board of Directors declares any dividend on the Series G
Preferred Stock pursuant to paragraph 3 of this Certificate of Designations,
and the Conversion Date for any shares of Series G Preferred Stock occurs on or
after the Record Date or Special Record Date, as the case may be, and before
the Dividend Payment Date for such dividend (or, in the case of a dividend
declared pursuant to Section 3(d), then the holder of such shares of Series G
Preferred Stock on such Record Date shall be entitled to receive such dividend
on such Dividend Payment Date (or such other date, as the case may be), as if
such Conversion Date had not occurred.

         (c)  Adjustments for Change in Capital Stock.  If after the Issue
Date, the Company:
                 (i)  pays a dividend or makes a distribution on the Series A
         TCI Group Common Stock in shares of Series A TCI Group Common Stock;

                 (ii)  subdivides combines the outstanding shares of Series A 
         TCI Group Common Stock into a greater number of shares;

                 (iii) combines the outstanding shares of Series A TCI Group
         Common Stock into a smaller number of shares;

                 (iv)  pays a dividend or makes a distribution on the Series A
         TCI Group Common Stock in shares of its capital stock (other than
         Series A TCI Group Common Stock or rights, warrants or options for
         its capital stock); or

                 (v)  issues by reclassification of its shares of Series A TCI
         Group Common Stock (other than a reclassification by way of merger or
         binding share exchange that is subject to paragraph 7(f)) any shares
         of its capital stock (other than rights, warrants or options for its
         capital stock),

then, subject to the following sentence and to paragraph 7(j), the conversion
privilege and the Conversion Rate in effect immediately prior to the opening of
businesses on the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be
adjusted so that the holder of any shares of Series G Preferred Stock
thereafter converted may receive the kind and number of shares of capital stock
of the Company which such holder would have owned immediately following such
event if such holder had converted his shares of Series G 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
(iv) or (v) above would result in the shares of Series G Preferred Stock being
convertible into shares or units (or a fraction thereof) of more than one class
or series of capital stock of the Company and any such class or series of
capital stock provides by its terms a right in favor the Company 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





                                     -18-
<PAGE>   184
to as "Redeemable Capital Stock") then, at the option of the Company, the
conversion privilege and Conversion Rate of the Series G Preferred Stock shall
not be adjusted pursuant to this paragraph 7(c) and in lieu thereof, but
subject to paragraph 7(j), the adjustment to the Conversion Rate contemplated
by paragraph 7(e) shall be made with the same effect as if the dividend or
distribution of Redeemable Capital Stock or the issuance of the additional
class or series of Redeemable Capital Stock by reclassification had been a
distribution of assets of the Company.

         The adjustment contemplated by this paragraph 7(c) shall be made
successively whenever any event listed above shall occur. For a dividend or
distribution, the adjustment shall become effective immediately after the
record date for the dividend or distribution. For a subdivision, combination
or reclassification, the adjustment shall become effective immediately after
the effective date of the subdivision, combination or reclassification.

         If after an adjustment a holder of Series G Preferred Stock would be
entitled to receive upon conversion thereof shares of two or more classes or
series of capital stock of the Company, the Conversion 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 as is contemplated by this paragraph
7 with respect to the Series A TCI Group Common Stock, on terms comparable to
those applicable to the Series A TCI Group Common Stock pursuant to this
paragraph 7.

         Any shares of Series A TCI Group Common Stock issuable in payment of a
dividend shall be deemed to have been issued immediately prior to the time of
the record date for such dividend for purposes of calculating the number of
outstanding shares of Series A TCI Group Common Stock under paragraphs 7(d) and
7(e) below.

        (d)  Adjustment for Rights Issue.  If, after the Company distributes any
rights, warrants or options to holders of shares of Series A TCI Group Common
Stock entitling them, for a period expiring within 45 days after the record date
for the determination of stockholders entitled to receive such distribution, to
purchase shares of Series A TCI Group Common Stock (or Convertible Securities)
at a price per share (or having a 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
conversion of such Convertible Securities) less than the Current Market Price on
the Determination Date, the Conversion Rate shall be adjusted so that it shall
equal the rate determined by dividing the Conversion Rate in effect immediately
prior to the opening of business on such record date 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 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 conversion price
of the Convertible Securities to be 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 the holders of Convertible Securities and Series B TCI Group Common Stock
referred to in the immediately succeeding paragraph of this paragraph 7(d) if
the distribution to which this





                                     -19-
<PAGE>   185
paragraph 7(d) applies is also being made to such holders) would purchase at
such Current Market Price, 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 so offered
to the holders of Series A TCI Group Common Stock (and to such holders of
Convertible Securities and Series B TCI Group Common Stock) for subscription or
purchase (or into which the Convertible Securities so offered are convertible).
Shares of Series A TCI Group Common Stock owned by or held for the account of
the Company shall not be deemed to be outstanding the purpose of any such
adjustment.

         For purposes of this paragraph 7(d) the number of shares of Series A
TCI Group Common Stock outstanding on any 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 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
paragraph 7(d) is  being applied) equal 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 paragraph 7(d) shall be made
successively whenever any such rights, warrants or options are issued, and
shall become effective immediately after the record date for the determination
of stockholders entitled to receive the rights, warrants or options.  If all of
the shares of Series A TCI Group Common Stock (or all of the Convertible
Securities) 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 which have been
exercised, if all of the shares of Series A TCI Group Common Stock issuable
upon conversion of such Convertible Securities have not been issued prior to
the expiration of the conversion right thereof), then the Conversion Rate shall
promptly be readjusted to the Conversion 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 Convertible Securities) issued upon the exercise of such rights, warrants
or options (or conversion  of such Convertible Securities).

         No adjustment shall be made under this paragraph 7(d) if the adjusted
Conversion Rate would be lower than the Conversion Rate in effect immediately
prior to such adjustment.

         (e)  Adjustments for Other Distributions.  If, after the Issue Date
(i) the Company distributes to all holders of shares of Series A TCI Group
Common Stock any assets


                                     -20-
<PAGE>   186
or debt securities or any rights, warrants or options to purchase securities
(excluding (x) dividends or distributions referred to in paragraph 7(c) (except
as otherwise provided in clause (ii) of this sentence) and distributions of
rights, warrants or options referred to in paragraph 7(d) and (y) cash
dividends or other cash distributions, unless such cash dividends or cash
distributions are Extraordinary Cash Dividends), or (ii) the Company makes a
dividend or distribution of Redeemable Capital Stock on, or issues Redeemable
Capital Stock by reclassification of, the Series A TCI Group Common Stock by
reclassification of, the Series A TCI Group Common Stock and determines
pursuant to paragraph 7(c) to treat the same as a distribution of assets of the
Company subject to this paragraph 7(e), then in each such event the Conversion
Rate shall be adjusted by dividing the Conversion Rate in effect immediately
prior to the opening of business on (A) the record date for the determination
of stockholders entitled to receive the distribution or (B) 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 Determination
Date, less the fair market value (as determined in good faith by the Board of
Directors) on such record date or effective date of said 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 and Series B TCI Group Common Stock referred to in the
immediately succeeding paragraph of this paragraph 7(e) if the distribution to
which this paragraph 7(e) applies is also being made to such holders), 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.

         For purposes of this paragraph 7(e), 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 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 distribution to which this paragraph 7(e) 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 Stock is then
convertible into 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 paragraph 7(e), 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 below in the following
sentence.  If, upon the date prior to the Ex-Dividend Date with respect to a
cash


                                     -21-
<PAGE>   187
dividend on Series A TCI Group Common Stock, the aggregate of the 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
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 Conversion Rate was previously made
under this paragraph 7(e)) 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 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-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 paragraph
7(e) shall be made successively whenever any distribution to which this
paragraph 7(e) applies is made, and shall become effective immediately after
the record date for the determination of stockholders entitled to receive the
distribution (or, in the case of a reclassification, the effective date).
Shares of Series A TCI Group Common Stock owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
adjustment.

         No adjustment shall be made under this paragraph 7(e) if the adjusted
Conversion Rate would be lower than the Conversion Rate in effect prior to such
adjustment.  In the event that, with respect to any distribution to which this
paragraph 7(e) would otherwise apply, the numerator of the fraction in the
formula set forth in the first paragraph of this paragraph 7(e) is zero or a
negative number, then the adjustment provided by this paragraph 7(e) shall not
be made.  If the Company makes a distribution to all holders of its Series A
TCI Group Common Stock of any of its assets or debt securities or any rights,
warrants or options to purchase securities of the Company that, but for the
immediately preceding sentence, would otherwise result in an adjustment in the
Conversion Rate pursuant to the foregoing provisions of this paragraph 7(e),
then, from and after the record date for determining the holders of Series A
TCI Group Common Stock entitled to receive the distribution, a holder of Series
G Preferred Stock that converts such shares in accordance with the provisions of
this paragraph 7 will upon such conversion be entitled to receive, in addition
to the shares of Series A TCI Group Common Stock into which such shares of
Series G Preferred Stock are convertible, the kind and amount of securities,
cash or other assets comprising the distribution that such holder would have
received if such holder had converted such shares of Series G Preferred Stock
immediately prior to the record date for determining the holders of Series A
TCI Group Common Stock entitled to receive the distribution.





                                     -22-
<PAGE>   188
        (f)  Consolidation, Merger or Sale of the Company.  If the Company
consolidates with or merges into, or transfers (other than by mortgage or
pledge) the properties and assets substantially as an entirety to, another
Person or the Company is a party to a merger or binding share exchange which
reclassifies or changes its outstanding Series A TCI Group Common Stock, the
Company (or its successor in such transaction) or the transferee of such
properties and assets shall make appropriate provision so that the holders of
the shares of Series G Preferred Stock then outstanding shall have the right
thereafter to convert such shares into the kind and amount of securities, cash
or other assets receivable upon such transaction by a holder of the number of
shares of Series A TCI Group Common Stock into which such shares of Series G
Preferred Stock could have been converted immediately before the effective date
of such transaction (assuming, to the extent applicable, that such holder
failed to exercise any rights of election with respect thereto and received per
share of Series A TCI Group Common Stock the kind and amount of securities,
cash or other assets received per share by a plurality of the non-electing
shares of Series A TCI Group Common Stock), and the holders of the Series G
Preferred Stock shall have no other conversion rights under these provisions;
provided that (i) effective provision shall be made, in the Articles or
Certificate of Incorporation of the resulting or surviving corporation or
otherwise or in any contracts of sale or transfer, so that the provisions set
forth herein for the protection of the conversion rights of Series G Preferred
Stock shall thereafter be made applicable, as nearly as reasonable may be, to
any such other securities and assets deliverable upon conversion of the Series
G Preferred Stock remaining outstanding or other convertible preferred stock or
other securities received by the holders of Series G Preferred Stock in place
thereof; and (ii) any such resulting or surviving corporation or transferee
shall expressly assume the obligation to deliver, upon the exercise of the
conversion privilege, such securities, cash or other assets as the holders of
the Series G Preferred Stock remaining outstanding, or other convertible
preferred stock or other securities received by the holders in place thereof,
shall be entitled to receive pursuant to the provisions hereof, and to make
provision for the protection of the conversion rights of the Series G Preferred
Stock, or of any other convertible preferred stock or other securities received
by the holders in place thereof, as provided in clause (i) of this sentence.

         If this paragraph 7(f) applies, paragraphs 7(c), 7(d) and 7(e) shall
not apply.

         (g)  Effect of Redemption.  Subject to paragraph 7(j) and to the
remaining provisions of this paragraph 7(g), in the event that a holder of
Series G Preferred Stock would be entitled to receive upon conversion thereof
pursuant to this paragraph 7 any Redeemable Capital Stock and the Company
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 Series G Preferred Stock then outstanding shall be entitled to
receive upon conversion 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 into which such shares of Series G
Preferred Stock could have been converted 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





                                     -23-
<PAGE>   189
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 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 holders of the Series G Preferred Stock shall have no other
conversion rights under these provisions with respect to such Redeemable
Capital Stock.

         Notwithstanding the foregoing, if the Redemption price for the shares
of such Redeemable Capital Stock is paid in whole or in part in Redemption
Securities, and the Mirror Preferred Stock Condition is met, the Series G
Preferred Stock shall not be convertible into such Redemption Securities and,
from and after the applicable redemption date, the holders of any shares of
Series G Preferred Stock that have not been exchanged for Mirror Preferred
Stock and Exchange Preferred Stock shall have no conversion rights under these
provisions except for any conversion right that may have existed immediately
prior to the effective date of the Redemption Event with respect to any
securities (including the Series A TCI Group Common Stock), cash or other
assets other than the Redeemable Capital Stock so Redeemed.  The Mirror
Preferred Stock Condition will be met in connection with a redemption of any
Redeemable Capital Stock into which the Series G Preferred Stock is then
convertible, if the Company makes appropriate provision so that the holders of
the Series G Preferred Stock have the right to exchange their shares of Series
G Preferred Stock on the effective date of the Redemption Event for Exchange
Preferred Stock of the Company and Mirror Preferred Stock of the issuer of the
Redemption Securities.  The sum of the initial liquidation preferences of the
shares of Exchange Preferred Stock and Mirror Preferred Stock delivered in
exchange for a share of Series G Preferred Stock will equal the Liquidation
Preference of a share of Series G Preferred Stock on the effective date of the
Redemption Event.  The Mirror Preferred Stock will have an aggregate initial
liquidation preference equal to the product of the aggregate Liquidation
Preference of the shares of Series G Preferred Stock exchanged therefor and the
quotient of (x) the product of the Conversion Rate for the Redeemable Capital
Stock to be Redeemed (determined immediately prior to the effective date of the
Redemption Event) and the average of the daily Closing Prices of the Redeemable
Capital Stock for the period of ten consecutive trading days ending on the
third trading day prior to the effective date of the Redemption Event, divided
by (y) the sum of the amount determined pursuant to clause (x), plus the fair
value of the securities (other than those being Redeemed), cash or other assets
that would have been receivable by a holder of Series G Preferred Stock upon
conversion thereof immediately prior to the effective date of the Redemption
Event (such fair value to be determined in the case of securities with a
Closing Price in the same manner as provided in clause (x) and otherwise by the
Board of Directors in the exercise of its good faith judgment).  The shares of
Exchange Preferred Stock will have an aggregate initial liquidation preference
equal to the difference between the aggregate Liquidation Preference of the
shares of Series G Preferred Stock exchanged therefore and the aggregate
initial liquidation preference of the Mirror Preferred Stock.

         When used in connection with a redemption by the Company of any
Redeemable Capital Stock into which the Series G Preferred Stock is then
convertible, the following terms have the following meanings:





                                      -24-
<PAGE>   190
                 (i)  "Redemption Securities" means securities of an issuer
         other than the Company that are distributed by the Company in
         payment, in whole or in part, of the redemption price for such
         Redeemable Capital Stock.

                 (ii)  "Mirror Preferred Stock" means convertible preferred
         stock issued by the issuer of the Redemption Securities and having
         terms, conditions, designations, dividend rights, voting powers,
         rights on liquidation and other preferences and relative,
         participating, optional or other special rights, and qualifications,
         limitations or restrictions thereof that are identical, or as nearly
         so as is practicable in the good faith judgment of the Board of
         Directors, to those of the Series G Preferred Stock for which such
         Mirror Preferred Stock is exchanged, except that (x) the liquidation
         preference will be determined as provided above in this paragraph
         7(g), (y) the running of any time periods pursuant to the terms of the
         Series G Preferred Stock shall be tacked to the corresponding time
         periods in the Mirror Preferred Stock and (z) the Mirror Preferred
         Stock shall be convertible into the kind and amount of Redemption
         Securities, cash and other assets that the holder of a share of Series
         G Preferred Stock in respect of which such Mirror Preferred Stock is
         issued pursuant to the terms hereof would have received upon
         redemption of the Redeemable Capital Stock had such shares of Series G
         Preferred Stock been converted prior to the effective date of the
         Redemption Event.

                 (iii)  "Exchange Preferred Stock" means a series of
         convertible preferred stock of the Company having terms, conditions,
         designations, dividend rights, voting powers, rights on liquidation
         and other preferences and relative, participating, optional or other
         special rights, and qualifications, limitations or restrictions
         thereof that are identical, or as nearly so as is practicable in the
         good faith judgment of the Board of Directors, to those of the Series
         G Preferred Stock for which such Exchange Preferred Stock is
         exchanged, except that (x) the liquidation preference will be
         determined as provided above in this paragraph 7(g), (y) the running
         of any time periods pursuant to the terms of the Series G Preferred
         Stock shall be tacked to the corresponding time period in the Exchange
         Preferred Stock and (z) the Exchange Preferred Stock will not be
         convertible into, and the holders will have no conversion rights 
         thereunder with respect to, the Redeemable Capital Stock redeemed in 
         the Redemption Event.

        Notwithstanding the second paragraph of this paragraph 7(g), the Mirror
Preferred Stock Condition shall only be deemed to have been satisfied in
connection with any Redemption Event if, in the good faith determination of the
Board of Directors: (i) receipt of Mirror Preferred Stock and/or Exchange
Preferred Stock in exchange for Series G Preferred Stock pursuant to the second
paragraph of this paragraph 7(g) would not result in the recognition of gain or
loss by the holders of such Series G Preferred Stock for United States federal
income tax purposes; (ii)  an adjustment made in the Conversion Rate of the
Series G Preferred Stock with respect to such Redemption Event, as provided in
the first paragraph of this paragraph 7(g), would result in the recognition of
gain or loss by the holders of Series G Preferred Stock for United States
federal





                                     -25-
<PAGE>   191
income tax purposes; or (iii) receipt of Redemption Securities in redemption of
the Redeemable Capital Stock to be redeemed in the Redemption Event would
result in the recognition of gain or loss by the holders of such Redeemable
Capital Stock, as the case may be.

         (h)  Simultaneous Adjustments.  In the event that this paragraph 7
requires adjustments to the Conversion Rate under more than one of paragraph
7(c)(iv), (d) or (e), and the record dates for the distributions giving rise to
such adjustments shall occur on the same date, then such adjustments shall be
made by applying, first, the provisions of paragraph 7(c), second, the
provisions of paragraph 7(e) and, third, the provisions of paragraph 7(d).

         (i)  When Adjustment May Be Deferred.  In any case in which this
paragraph 7 shall require that an adjustment shall become effective immediately
after a record date for an event, the Company may defer until the occurrence of
such event (x) issuing to the holder of any shares of Series G Preferred Stock
converted after such record date and before the occurrence of such event the
additional shares of Series A TCI Group Common Stock issuable upon such
conversion by reason of the adjustment required by such event over and above
the shares of Series A TCI Group Common Stock issuable upon such conversion 
before giving effect to such adjustment and (y) paying to such holder cash or 
its check in lieu of any fractional interest to which he is entitled pursuant 
to paragraph 7(o); provided, however, that the Company 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.

         (j)  De Minimis Adjustment; When Adjustment Is Not Required.  No
adjustments in the Conversion Rate need be made unless the adjustment would
require an increase or decrease of at least one percent (1%) in the Conversion
Rate.  Any adjustment which is not made shall be carried forward and taken into
account in any subsequent adjustment.

         All calculations under this paragraph 7 shall be made to the nearest
cent or to the nearest 1/1000th of a share, as the case may be.

         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 Company plan providing for
reinvestment of dividends or interest or pursuant to a bona fide employee stock
option or stock purchase plan of the Company.  No adjustment need be made for a
change in the par value of the Series A TCI Group Common Stock.

         No adjustment need be made under this paragraph 7 for a transaction
referred to in paragraph 7(c), 7(d), 7(e) or 7(g) if holders of the Series G
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 Series G Preferred Stock are to participate in
the transaction shall not be deemed to





                                     -26-
<PAGE>   192
be fair if it would require the holder to convert his shares of Series G
Preferred Stock, in order to participate, at any time prior to the expiration
of the conversion period specified for the shares of Series G Preferred Stock
pursuant to paragraph 7(a) of this Certificate of Designations.  The
immediately preceding sentence shall apply to any transaction referred to in
paragraph 7(c), 7(d), 7(e) or 7(g) only  if, in good faith determination of the
Board of Directors: (i) participation in such transaction by the holders of the
Series G Preferred Stock would not result in the recognition of gain or loss by
such holders of United States federal income tax purposes; (ii) an adjustment
made in the Conversion Rate of the Series G Preferred Stock in lieu of
participating in such transaction, pursuant to this paragraph 7, would result
in the recognition of gain or loss by holders of Series G Preferred Stock for
United States federal income tax purposes; or (iii) participation in such
transaction by the holders of the Series A TCI Group Common Stock would result
in the recognition of gain or loss by such holders for United States federal
income tax purposes.

         To the extent the shares of Series G Preferred Stock become
convertible into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.

         (k)  Company Determination Final.  Any determination required to be
made pursuant to paragraph 7(c), 7(d), 7(e), 7(f), 7(g), 7(h), 7(j) or 7(o)
shall be made by the Board of Directors (whether or not reference to the Board
of Directors is expressly made in any such paragraph) and any determination so
made in good faith shall be conclusive and binding, absent manifest error, on
the holders of shares of Series G Preferred Stock.  In making any determination
as to the expected tax treatment of any action, transaction or event referred
to herein, including, without limitation, the determinations provided for in
the last paragraph of Paragraph 7(g) and the last sentence of the fourth
paragraph of paragraph 7(j), the Board of Directors shall be entitled to rely
conclusively on (i) an opinion of counsel rendered by a law firm acceptable to
the Board of Directors, acting in good faith, or (ii) a private letter ruling
from the Internal Revenue Service, to such effect, which opinion of counsel or
private letter ruling may be based upon such assumptions, and be subject to
such qualifications, conditions and limitations, as the Board of Directors
shall in good faith determine to be appropriate under the circumstances.  Any
such determination by the Board of Directors shall be based on the expected
United States federal income tax consequences applicable to the transaction in
question, without regard to special tax rules such as those applicable to
dealers in securities, foreign persons, mutual funds, insurance companies,
tax-exempt entities and holders ho do not hold the securities or other property
in question as capital assets, or the personal circumstances of any particular
stockholder.

         (l)  Notice of Adjustment.  Whenever the provisions of this paragraph
7 require an adjustment of the Conversion Rate, the Company shall promptly
compute such adjustment and (i) file with the transfer agent for the Series G
Preferred Stock (or with the books of the Company if there is no transfer
agent) an Officers' Certificate setting forth a description of the event
requiring the adjustment, the new Conversion Rate (including a reasonable
detailed calculation thereof), and the kind and amount of capital stock or
other securities or cash or other assets into which the Series G Preferred
Stock shall be convertible after such event, and (ii) cause a notice containing
a summary of the information set forth in said certificate to be given to the





                                      -27-
<PAGE>   193
holders of Series G Preferred Stock.  Where appropriate, such notice may be
given in advance and included as a part of the notice required to be given
under the provisions of paragraph 7(m).

         (m)  Advance Notice of Certain Transactions.  If the Company:

                 (i)  takes any action which would require an adjustment in the 
         Conversion Rate;

                 (ii)  is a party to a consolidation, merger or binding share
         exchange, or transfers all or substantially all of its assets to
         another Person, and any stockholders of the Company must approve the
         transaction; or

                 (iii) voluntarily or involuntarily dissolves, liquidates or 
         winds up,

then, in any such event, the Company shall give the holders of the Series G
Preferred Stock, at least twenty (20) days prior to any record date or other
date set for definitive action if there shall be no record date, a notice
stating the record date for and the anticipated effective date of such action
or event and, if the event is a dividend or distribution or issuance by
reclassification of Redeemable Capital Stock, whether the Company has
determined to adjust the Conversion Rate pursuant to paragraph 7(c), or 7(e),
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 Series A
TCI Group Common Stock.  Without limiting the obligation of the Company to
provide notice of corporate actions hereunder, the failure to mail the notice
or any defect in it shall not affect the legality or validity or any corporate
action or the vote thereon.

         (n)  Reservation of Series A TCI Group Common Stock Issuable Upon
Conversion.  The Company shall at all times on and after the Issue Date reserve
and keep available out of its authorized but unissued shares of Series A TCI
Group Common Stock, solely for the purpose of effecting the conversion of the
shares of Series G Preferred Stock, such number of its shares of Series A TCI
Group Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series G Preferred Stock; provided that
nothing contained herein shall be construed to preclude the Company from
satisfying its obligations in respect of the conversion of the outstanding
shares of Series G Preferred Stock by delivery of shares of Series A TCI Group
Common Stock which are held in the treasury of the Company.  The Company shall
take all such corporate and other actions as from time to time may be necessary
to insure that all shares of Series A TCI Group Common Stock issuable upon
conversion of shares of Series G Preferred Stock at the Conversion Rate in
effect from time to time will, when issued, be duly and validly authorized and
issued, fully paid and nonassessable, and free from all preemptive or similar
rights.  in order that the Company may issue shares of Company will in good
faith and as expeditiously as possible endeavor to comply with all applicable
Federal and state securities laws and will in good faith and as expeditiously
as possible endeavor to list such shares to be issued upon conversion on such
national securities exchange





                                     -28-
<PAGE>   194
or national securities association, if any, on which the Series A TCI Group
Common Stock is then listed.

         (o)  Fractional Shares.  No fractional shares of Series A TCI Group
Common Stock or scrip shall be issued upon conversion of the Series G Preferred
Stock.  Whether or not fractional shares would otherwise be required to be
issued to a holder of Series G Preferred Stock upon such conversion shall be
determined on the basis of the total number of shares of Series G Preferred
Stock the holder is at the time converting into Series A TCI Group Common Stock
and the total number of shares of Series A TCI Group Common Stock issuable
upon such conversion.  In lieu of the issuance of fractional shares of Series A
TCI Group Common Stock, the Company shall pay instead an amount in cash or by
its check equal to the same fraction of the Closing Price of a full share of 
Series A TCI Group Common Stock on the last full trading day prior to the 
Conversion Date.

          (p)  Impairment.  The Company will not, by amendment of this
Certificate of Designations or through any reorganization, recapitalization, 
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, other than as expressly permitted by
this Certificate of Designations or approved by the requisite vote or written
consent of the holders of Series G Preferred Stock taken or given in accordance
with this Certificate, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company, but will
at all times in good faith assist in the carrying out of all the provisions of
this paragraph 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the holders of Series
G Preferred Stock against impairment.

         8.      Voting.

         (a)  Voting Rights.  The holders of Series G Preferred Stock shall
have no voting rights whatsoever, except as required by law and except for the
voting rights described in this paragraph 8; provided, however, that the number
of authorized shares of Series G Preferred Stock may be increased or decreased
(but not below the number of shares of Series G Preferred Stock then
outstanding) by the affirmative vote of the holders of at least 66 2/3% of the
total voting power of the then outstanding Voting Securities (as defined in
Section A of Article VIII of the Restated Certificate of Incorporation of the
Company (the "Restated Certificate")), voting together as a single class as
provided in Article IX of the Restated Certificate.  Without limiting the
generality of the foregoing, no vote or consent of the holders of Series G
Preferred Stock shall be required for (a) the creation of any indebtedness of
any kind of the Company, (b) the creation or designation of any class or series
of Senior Stock, Parity Stock or Junior Stock, or (c) any amendment to the
Restated Certificate that would increase the number of authorized shares of
Preferred Stock or the number of authorized shares of Series G Preferred Stock
or that would decrease the number of authorized shares of Preferred Stock or
the number of authorized shares of Series G Preferred Stock (but not below the
number of shares of Preferred Stock or Series G Preferred Stock, as the case
may be, then outstanding).





                                     -29-
<PAGE>   195
         (b)  Election of Directors.  The holders of the Series G Preferred
Stock shall have the right to vote at any annual or special meeting of
stockholders for the purpose of electing directors.  Each share of Series G
Preferred Stock shall have one vote for such purpose, and shall vote as a
single class with all other classes or series of capital stock of the Company
that are entitled to vote in any general election of directors, unless the
instrument creating or evidencing such class or series of capital stock
otherwise expressly provides.

         9.  No Preemptive Rights.  The holders of shares of Series G Preferred
Stock shall have no preemptive rights, including preemptive rights with respect
to any shares of capital stock or other securities of the Company convertible
into or carrying rights or options to purchase any such shares.

         10.  Waiver.  Any provision of this Certificate of Designations which,
for the benefit of the holders of Series G Preferred Stock, prohibits, limits
or restricts actions by the Company, or imposes obligations on the Company,
including but not limited to provisions relating to the obligation of the
Company to redeem or convert such shares, 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 by the affirmative vote
or with the consent of the holders of at least a majority of the number of
shares of Series G Preferred Stock then outstanding (or such greater percentage
thereof as may be required by applicable law or any applicable rules of any
national securities exchange or national interdealer quotation system), either
in writing or by vote at an annual meeting or a special meeting called for such
purpose at which the holders of Series G Preferred Stock shall vote as a
separate class.

         11.  Method of Giving Notices.  Any notice required or permitted by
the provisions of this Certificate of Designations to be given to the holders
of shares of Series G Preferred Stock shall be deemed duly given if deposited
in the United States mail, first class mail, postage prepaid, and addressed to
each holder of record at his address appearing on the books of the Company or
supplied by him in writing to the Company for the purpose of such notice.

         12.  Exclusion of Other Rights.  Except as may otherwise be required
by law and except for the equitable rights and remedies which may otherwise be
available to holders of Series G Preferred Stock, the shares of Series G
Preferred Stock shall not have any designations, preferences, limitations or
relative rights other than those specifically set forth in this Certificate of
Designations.

         13.  Headings of Subdivisions.  The headings of the various
subdivisions of this Certificate of Designations are for convenience of
reference only and shall not affect the interpretation of any of the provisions
of this Certificate of Designations.





                                     -30-
<PAGE>   196
                               State of Delaware

                        OFFICE OF THE SECRETARY OF STATE                  PAGE 1

                        _______________________________



         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "TELE-COMMUNICATIONS, INC.", FILED IN THIS OFFICE ON THE
TWENTY-FIFTH DAY OF JANUARY, A.D. 1996, AT 3:05 O'CLOCK P.M.

         A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OR DEEDS FOR RECORDING.





                                     [SEAL]
                                                /s/ EDWARD J. FREEL      
                                             -----------------------------------
                                             Edward J. Freel, Secretary of State

                                             AUTHENTICATION:


2371729  8100                                           DATE:  7804670
960024231                                                     01-25-96
<PAGE>   197
                                                           STATE OF DELAWARE
                                                          SECRETARY OF STATE
                                                       DIVISION OF CORPORATIONS
                                                       FILED 03:05 PM 01/25/1996
                                                          980024220 - 2371729



                           TELE-COMMUNICATIONS, INC.

                          CERTIFICATE OF DESIGNATIONS

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

                       SETTING FORTH A COPY OF RESOLUTION
                     CREATING AND AUTHORIZING THE ISSUANCE
                  OF A SERIES OF PREFERRED STOCK DESIGNATED AS
                  "REDEEMABLE CONVERTIBLE LIBERTY MEDIA GROUP
                           PREFERRED STOCK, SERIES H"
                       ADOPTED BY THE BOARD OF DIRECTORS
                          OF TELE-COMMUNICATIONS, INC.

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

         The undersigned, an executive Vice President of TELE-COMMUNICATIONS,
INC., a Delaware corporation (the "Company"), HEREBY CERTIFIES that the Board
of Directors of the Company on December 13, 1995, duly adopted the following
resolutions creating a new series of the Company's Series Preferred Stock:

         "BE IT RESOLVED, that pursuant to authority expressly granted by the
provisions of Article IV, Section D of the Restated Certificate of
Incorporation of the Company, the Board of Directors hereby creates and
authorizes the issuance of a new series of the Company's Series Preferred
Stock, par value $.01 per share  ("Series Preferred Stock"), and hereby fixes
the powers, designations, dividend rights, voting powers, rights on
liquidation, conversion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and the
qualifications, limitations or restrictions of the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Restated Certificate of Incorporation
that are applicable to each class and series of the Company's preferred stock,
par value $.01 per share ("Preferred Stock")) as follows:

         1.  Designation Number of Shares.  The designation of the series of
Series Preferred Stock, par value $.01 per share, of the Company created hereby
shall be "Redeemable Convertible Liberty Media Group Common Stock, Series H"
("Series H Preferred Stock").  The designated number of shares of Series H
Preferred Stock shall be 7,259,380.  Each share of Series H Preferred Stock
shall be 7,259,380.  Each share of Series H Preferred Stock shall have a stated
value of $5.40 ("Stated Value").





                                     - 1 -
<PAGE>   198
         Any shares of Series H Preferred Stock redeemed, converted or
otherwise acquired by the Company shall be retired, shall not be reissued as
shares of Series H Preferred Stock and shall resume the status of authorized
and unissued shares of Series Preferred Stock, without designation  as to
series, until such shares are once more designated as part of a particular
series of Series Preferred Stock by the Board of Directors.

         2.  Certain Definitions.  Unless the context otherwise requires, the
terms defined in this paragraph 2 shall have, for all purposes of this
Certificate of Designations, the meanings herein specified:

         "Anniversary Date" shall mean January 25, 1997.

         "Average Market Price" as of any Record Date or Special Record Date
for a dividend payment declared by the Board of Directors shall mean the
average of the daily Closing Prices of the Series A TCI Group Common Stock for
the period of ten (10) consecutive trading days ending on the tenth trading day
prior to such Record date or Special Record Date, 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, 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 or 
other date fixed for the payment of dividends to which such Record Date or 
Special Record Date relates.

         "Board of Directors" shall mean the Board of Directors of the Company,
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
Company 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 not
required to be open.

         "capital stock" shall mean any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock.

         "Class B Preferred Stock" shall mean the Class B 6% Cumulative
Redeemable Exchangeable Junior Preferred Stock, par value $.01 per share, of
the Company.

         "Closing Price" of a share of Series A TCI Group Common Stock or of a
share of Series A Liberty Media Group Common Stock, or a share of any other
class or series of capital stock of the Company into which the Series H
Preferred Stock may hereafter become convertible pursuant to paragraph 7, on
any day shall mean the last reported per share sale price (or, if no sale price
is reported, the average of the high and low bid prices) of the Series A TCI





                                     - 2 -
<PAGE>   199
Group Common Stock, the Series A Liberty Media Group Common Stock or such
capital stock, as the case may be, on such day on the Nasdaq Stock Market or as
quoted by the National Quotation Bureau Incorporated or, if the Series A TCI
Group Common Stock, the Series A Liberty Media Group Common Stock or such
capital stock, as applicable, is listed on an exchange, on the principal
exchange on which the Series A TCI Group Common Stock, the Series A Liberty
Media Group Common Stock or such capital stock, as the case may be, is listed.
In the event that no such quotation is available for any day, the Board of
Directors shall be entitled to determine the Closing Price on the basis of such
quotations as it in good faith considers appropriate.

         "Contingency" shall have the meaning set forth in paragraph 3(a.).

         "Conversion Date" of a share of Series H Preferred Stock shall mean
the date on which the requirements for conversion of such share set forth in
paragraph 7(b) of this Certificate of designations have been satisfied by the
holder thereof.

         "Conversion Rate" shall mean the kind and amount of securities, assets
or other property that as of any date are issuable or deliverable upon
conversion of a share of Series H Preferred Stock.  The Conversion Rate of a
share of Series H Preferred Stock shall initially be .2625 shares of Series A
Liberty Media Group Common Stock for each share of Series H Preferred Stock,
subject to adjustment as set forth in paragraph 7 of this Certificate of
Designations.  In the event that pursuant to paragraph 7 of the Series H
Preferred Stock becomes convertible into more than one class or series of
capital stock of the Company, the term Conversion 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
conversion of a share of Series H Preferred Stock.

         "Convertible Securities" shall mean any or all options, warrants,
securities and rights which are convertible into or exercisable or exchangeable
for Series A Liberty Media Group Common Stock at the option of the holder
thereof, or which otherwise entitle the holder thereof to subscribe for,
purchase or otherwise acquire Series A Liberty Media Group Common Stock;
provided, however, that such term shall not include the Series B Liberty Media
Group Common Stock.

         "Career 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 Liberty Media Group Common Stock for the shortest of:

                 (i)  the period of 30 consecutive trading days commencing 45
         trading days before such Determination Date.

                 (ii) the period commencing on the date next succeeding the
         first public announcement of the issuance of rights, warrants or
         options or the distribution in





                                     - 3 -
<PAGE>   200
         respect of which the Current Market Price is being calculated and
         ending on the last full trading day before such Determination Date,
         and

                 iii)  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 paragraph 7(c)(iv), 7(d)
         or 7(e), 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 paragraph
7(c)(iv), 7(d) or 7(e) (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 Liberty Media 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 to which paragraph 7(c)(i), (ii),
(iii) or (v) applies occurs during the 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 Liberty Media Group Common Stock during such period.

         "Determination Date" for any issuance of rights, warrants or options
or any distribution to which paragraph 7(d) or 7(e) 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 distribution to which such
paragraph applies and (ii) the Ex-Dividend date for such rights, warrants or
options or distribution.

         "Dividend Payment Date" shall mean the first day of each February and
August, commencing with August 1, 1997, or the next succeeding Business
Day if any such day is not a Business Day.

         "Dividend Period" shall mean the period from the Anniversary Date to
but excluding the first Dividend Payment Date and, thereafter, each semi-annual
period from and including a Dividend Payment Date to but excluding the next
Dividend Payment Date.

         "Exchange Preferred Stock" shall have the meaning set forth in
paragraph 7(g).





                                     - 4 -
<PAGE>   201
         "Ex-Dividend Date: shall mean the date on which "ex-dividend" trading
commences for a dividend, an issuance of rights, warrants or options or a
distribution to which any of paragraph 7(c), (d), or (e) applies in the
over-the- counter market or on the principal exchange on which the Series A
Liberty Media Group Common Stock is then quoted or listed.

         "Issue Date" shall mean the date on which shares of Series H Preferred
Stock are first issued.

         "Junior Stock" shall mean (i) the TCI Group Common Stock, (ii) the
Liberty Media Group Common Stock, (iii) the Class B Preferred Stock, (iv) any
other class or series of capital stock, whether now existing or hereafter
created, of the Company, other than (A) the Series H Preferred Stock, (B) any
class or series of Parity Stock (except to the extent provided under clause (v)
hereof) and (C) any class or series of Senior Stock, and (v) above, a class or
series of Parity Stock shall rank junior to the Series H Preferred Stock as to
dividend rights, rights of redemption or rights on liquidation if the holders
of shares of Series H Preferred Stock shall be entitled to dividend payments,
payments on redemption or payments of amounts distributable upon dissolution,
liquidation or winding up of the Company, as the case may be, in preference or
priority to the holders of shares of such class or series of Parity Stock.

         "Liberty Media Group Common Stock" shall mean the Series A Liberty
Media Group Common Stock and the Series B Liberty Media Group Common Stock.

         "Liquidation Preference" measured per share of the Series H Preferred
Stock as of any date in question (the "Relevant Date") shall mean an amount
equal to the sum of (a) the Stated Value of such share, plus (b) an amount
equal to all dividends accrued on such share which pursuant to paragraph 3(d)
of this Certificate of Designations have been added to and remain a part of the
Liquidation Preference as of the Relevant Date, plus (c) for purposes of
determining the amounts payable pursuant to paragraph 4 and paragraph 5 of this
Certificate of Designations and the definition of Redemption Price, an amount
equal to all unpaid dividends accrued on the sum of the amounts specified in
clauses (a) and (b) above during the period from and including the immediately
preceding Dividend Payment Date (or the Anniversary Date if the Relevant Date
is on or prior to the first Dividend Payment Date) to but excluding the
Relevant Date, and, in the case of clauses (b) and (c) hereof, whether or not
such unpaid dividends have been declared or there are any unrestricted funds of
the Company legally available for the payment of dividends,  In connection with
the determination of the Liquidation Preference of a share of Series H 
Preferred Stock upon redemption or upon liquidation, dissolution or winding up
of the company, the Relevant Date shall be the applicable date of redemption or
the date of distribution of amounts payable to stockholders in connection with
any such liquidation, dissolution or winding up.

         "Mirror Preferred Stock" shall have the meaning set forth in paragraph
7(g).





                                     - 5 -
<PAGE>   202
         "1933 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.

         "Officers' Certificate" shall mean a certificate signed by the
chairman of the Board, President or any Senior Vice President of the Company
and by the Treasurer or any Assistant Treasurer of the Company.

         "Parity Stock" shall mean any class or series of capital stock,
whether now existing or hereafter created of the Company ranking on a parity
basis with the Series H 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 Series
H 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 different form those of the Series H
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 Company, as
the case may be, in proportion to their respective accumulated and accrued and
unpaid dividends, redemption prices or liquidation 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 Series H Preferred Stock.  No
class or series of capital stock that ranks junior to the Series H Preferred
Stock as to rights on liquidation shall rank or be deemed to rank on a parity
basis with the Series H 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 so provides.  The Series C Preferred
Stock, the Series D Preferred Stock, the Series F Preferred Stock and the
Series G Preferred Stock rank on a parity basis with the Series H Preferred
Stock as to dividend rights, rights of redemption and rights on liquidation and
constitute "Parity Stock" for purposes of this Certificate of Designations.

         "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.                           

         "Record Date" for the dividends payable on any Dividend Payment Date
shall mean the 15th day of the month preceding the month during which such
Dividend Payment Date shall occur as and if designated by the Board of
Directors.

         "Redeemable Capital Stock" shall have the meaning set forth in
paragraph 7(c).

         "Redemption Date" as to any share of Series H Preferred Stock shall
mean the date fixed for redemption of such share pursuant to paragraph 5(a) or
5(b) of this Certificate of Designation, provided that no such date will be a
Redemption Date unless the applicable Redemption Price is actually paid in full
on such date or the consideration sufficient for the





                                     - 6 -
<PAGE>   203
payment thereof, and for no other purpose, has been set apart or deposited in
trust as contemplated by paragraph 5(d) of this Certificate of Designations.

         "Redemption Price", as to any share of Series H Preferred Stock that
is to be redeemed on any Redemption Date, shall mean the Liquidation Preference
thereof on such Redemption Date.

         "Redemption Securities" shall have the meaning set forth in paragraph
7(g).

         "Senior Stock" shall mean any class or series of capital stock of the
Company hereafter created ranking prior the Series H 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 Series H 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 of the Company, as the case may be, in preference or priority to the
holders of shares of Series H Preferred Stock.  No class or series of capital
stock that ranks on a parity basis with or junior to the Series H Preferred
Stock as to rights on liquidation shall rank or be deemed to rank prior to the
Series H 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 Series H Preferred Stock, unless the instrument creating or
evidencing such class or series of capital stock otherwise expressly so
provides.

         "Series A Liberty Media Group Common Stock" shall mean the Tele-
Communications, Inc. Series A Liberty Media Group Common Stock, par value
$1.00 per share, which term shall include, where appropriate, in the case of
any reclassification, recapitalization or other change in the Series A Liberty
Media Group Common Stock, or in the case of a consolidation or merger of the
Company with or into another Person affecting the Series A Liberty Media Group
Common Stock, such capital stock to which a holder of Series A Liberty Media
Group Common Stock shall be entitled upon the occurrence of such event.

         "Series A TCI Group Common Stock" shall mean the Tele-Communications,
Inc. Series A TCI Group Common Stock, par value $1.00 per share, 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 the Company 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 Liberty Media Group Common Stock" shall mean the Tele-
Communications, Inc. Series B Liberty Media Group Common Stock par value
$1.00 per share, which term shall include, where appropriate, in the case of
any reclassification, recapitalization or other change in the Series B Liberty
Media Group Common Stock, or in the case of a





                                     - 7 -
<PAGE>   204
consolidation or merger of the Company with or into another Person affecting
the Series B Liberty Media Group Common Stock, such 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, 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 the Company 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.

         "Series C Preferred Stock" shall mean the Convertible Preferred Stock,
Series C, par value $.01 per share, of the Company.

         "Series D Preferred Stock" shall mean the Convertible Preferred Stock,
Series D, par value $.01 per share, of the Company.

         "Series F Preferred Stock" shall mean the Convertible Redeemable
Participating Preferred Stock, Series F, par value $.01 per share, of the
Company.

         "Series G Preferred Stock" shall have the meaning set forth in
paragraph 1 of this Certificate of Designations.

         "Series H Preferred Stock" shall mean the Redeemable Convertible
Liberty Media Group Preferred Stock, Series H, par value $.01 per share, of the
Company.

         "Special record Date" hall have the meaning set forth in paragraph
3(d) of this Certificate of Designations.

         "Shared Value" of a share of Series H Preferred Stock shall have the
meaning set forth in paragraph 1 of this Certificate of Designations.

         "Subsidiary" shall mean (i) a corporation (other than the Company) 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 Company and/or one or more Subsidiaries of the Company and (ii) any
other Person (other than a corporation) in which the Company and/or one or more
Subsidiaries of the Company, 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.

         "Target Price" shall initially mean $27 and shall be appropriately
adjusted to take into account any stock dividends on the Series A TCI Group
Common Stock or the Series A Liberty Media Group Common Stock, or any stock
splits, reclassifications or combinations of





                                     - 8 -
<PAGE>   205
the Series A TCI Group Common Stock or the Series A Liberty Media Group Common
Stock during the period following the Issue Date and ending on the Anniversary
Date or on such earlier date, if any, as of which the Contingency is met.

                 "TCI Group Common Stock" shall mean the Series A TCI Group 
Common Stock and the Series B TCI Group Common Stock.

         3.  Dividends

         (a)     The Contingency.  If the sum of (i) the Closing Price of the
Series A TCI Group Common Stock, plus (ii) one-fourth of the Closing Price of
the Series A Liberty Media Group Common Stock equals or exceeds the Target
Price for any ten (10) consecutive trading days during the period of sixty-five
(65) consecutive trading days ending on and including the last trading day
immediately preceding the Anniversary Date (the "Contingency"), no dividends
will accrue or be payable with respect to the Series H Preferred Stock.

         (b)     Payment.  In the event that the Contingency is not met, and
only in such event, the holders of Series H Preferred Stock shall, subject to
the prior preferences and other rights of any Senior Stock and to the
provisions of paragraph 6 hereof, be entitled to receive, when and as declared
by the Board of Directors out of unrestricted funds legally available therefor,
cumulative dividends, in preference to dividends on any Junior Stock, which
shall accrue as provided herein.  Except as otherwise provided in paragraph
3(d) of this Certificate of Designations, dividends on each share of Series H
Preferred Stock will, if the Contingency is not met, accrue on a daily basis at
the rate of 4% per annum of the Liquidation Preference of such share from and
including the Anniversary Date to but excluding the date on which the
Liquidation Preference or Redemption Price of such share is made available
pursuant to paragraph 4 or 5, respectively, of this Certificate of Designations
or the date of conversion of such share pursuant to paragraph 7 hereof, as
applicable.  Dividends shall accrue as provided herein whether or not such
dividends have been declared and whether or not there are any unrestricted
funds of the Company legally available for the payment of dividends.  Accrued
dividends on the series H Preferred Stock shall be payable semiannually on each
Dividend Payment Date, commencing on August 1, 1997, to the holders of record
of the Series H Preferred Stock as of the close of business on the applicable
Record Date.  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 in this paragraph 3(b) for the actual number of days
elapsed from and including the Anniversary 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 to be made, based on a
365-day year, and (ii) as of any Dividend Payment Date after the first Dividend
payment Date, such amount shall be calculated on the basis of such rate per
annum based on a 360-day year of twelve 30-day months.  For so long as the
Liquidation Preference of a share of Series H Preferred Stock is equal to the
Stated Value per share, the amount of the dividend payable per share on the
Dividend Payment Date for each full semi-annual Dividend Period shall be $.108.





                                     - 9 -
<PAGE>   206
         (c)  Method of Payment.  All dividends payable with respect to the
shares of Series H Preferred Stock may be declared and paid, in the sole
discretion of the Board of Directors, in cash, through the issuance of shares
of Series A TCI Group Common Stock or in any combination of the foregoing.  If
any dividend payment declared by the Board of Directors with respect to the
shares of Series H Preferred Stock is to be paid in whole or in part through
the issuance of shares of Series A TCI Group Common Stock, the amount of such
dividend payment to be paid per share of Series H Preferred Stock in shares of
Series A TCI Group Common Stock (the "Stock Dividend Amount") shall be
satisfied and paid by the delivery to the holders of record of such shares of
Series H Preferred Stock on the Record Date or Special Record Date, as the case
may be, 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 Average
Market Price of a share of Series A TCI Group Common Stock as of such Record
Date or Special Record Date. The Company shall not be required to issue any
fractional share of Series A TCI Group Common Stock to which any holder of
Series H Preferred Stock may become entitled pursuant to this paragraph 3(c). 
The Board of Directors may elect to settle any final fraction of a share of
Series A TCI Group Common Stock which a holder of one or more shares of Series
H Preferred Stock would otherwise be entitled to receive pursuant to this
paragraph 3(c) by having the Company pay to such holder, in lieu of issuing
such fractional share, cash in an amount (rounded upward to the nearest whole
cent) equal to the same fraction of the Average Market Price of a share of
Series A TCI Group Common Stock as of the Record Date or Special Record Date,
as the case may be, for the dividend payment with respect to which such shares
of Series A TCI Group Common Stock who would otherwise be entitled to receive a
fractional share of Series A TCI Group Common Stock on the Dividend payment
Date or other date fixed for the payment of such dividend.     

         All dividends paid with respect to the shares of Series H Preferred
Stock pursuant to this paragraph 3 shall be paid pro rata to all the holders of
shares of Series H Preferred Stock outstanding on the applicable Record Date or
Special Record Date, as the case may be.

         (d)  Unpaid Dividends.  If an any Dividend Payment Date the Company,
pursuant to applicable law or otherwise, shall be prohibited or restricted from
paying the full dividends of which holders of Series H Preferred Stock, and any
Parity Stock ranking on a parity basis with the Series H Preferred Stock with
respect to the right to receive dividend payments, shall be entitled, the
amount available for such payment pursuant to applicable law and which is not
otherwise restricted (if any) shall be distributed among the holders of Series H
Preferred Stock and any such Parity Stock ratably in proportion to the full
amounts to which they would otherwise be entitled.  On each Dividend Payment
Date, all dividends that have accrued ton each share of Series H Preferred
Stock during the Dividend Period ending on such Dividend Payment Date shall, to
the extent not paid on such Dividend Payment Date for any reason (whether or
not such unpaid dividends have been declared or there are any unrestricted
funds of the Company legally available for the payment of dividends), be added
cumulatively to the Liquidation Preference of such share and will remain a part 
thereof until such dividends are paid.  The rate per annum at which dividends 
accrue in respect of that portion of the Liquidation Preference of





                                     - 10 -
<PAGE>   207
a share of Series H Preferred Stock that consists of accrued unpaid dividends
that have been added to the Liquidation Preference of such share on a Dividend
Payment Date pursuant to this paragraph 3(d) and remain unpaid on the next
succeeding Dividend Payment Date shall increase to 8.625% per annum from and
after such next succeeding Dividend Payment Date to and including the date on
which the Liquidation Preference or Redemption Price of such share is made
available pursuant to paragraph 4 or 5, respectively, of this Certificate of
Designations or the date of conversion of such share pursuant to paragraph 7
hereof, as applicable, unless the portion of the Liquidation Preference that
consists of such accrued unpaid dividends is earlier declared and paid or an
amount sufficient to pay the same in full is irrevocably set apart in trust for
such purpose.  That portion of the Liquidation Preference of a share of Series
H Preferred Stock that consists of accrued unpaid dividends, together with all
dividends accrued in respect thereof, may be declared an paid at any time
(subject to the rights of any Senior Stock and to the concurrent satisfaction
of any dividend arrearages that existing with respect to any Parity Stock that
ranks on a parity basis with the Series H Preferred Stock as to the payment of
dividends), without reference to any regular Dividend Payment Date, to holders
of record as of the close of business, on such date, not more than 45 days nor
less than 10 days prior thereto, to the holders of record of the shares of
Series H Preferred Stock.

         (e)  Credit.  Any dividend payment made on the shares of Series H
Preferred Stock shall first be credited against the earliest accrued but unpaid
dividend due with respect to the shares of Series H Preferred Stock.

         (f)  Authorized Shares.  All shares of Series A TCI Group Common Stock
issued in payment of any dividend on the Series H Preferred Stock shall, when
issued, be duly and validly authorized, fully paid, nonassessable and free from
all preemptive or similar rights; the delivery of such shares shall be made in
compliance  with all applicable Federal and state securities losses, and such
shares shall have been listed for trading on such national securities exchange
or national securities association, if any, on which the Series A TCI Group
Common Stock is then listed.

         4.  Distributions Upon Liquidation, Dissolution or Winding Up.
Subject to the prior payment in full of the preferential amounts to which any
Senior Stock is entitled, in the event of any liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, the holders of
Series H Preferred Stock shall be entitled to receive from the assets of the
company available for distribution to stockholders before any payment or
distribution shall be made to the holders of any Junior Stock, an amount in
cash (or, at the election of the Company, property at its fair market value, as
determined by the Board of Directors in good faith) per share, equal to the
Liquidation Preference of a share of Series H Preferred Stock as of the date of
payment or distribution, which payment or distribution shall be made pari
passu with, and if the Company has elected to pay in property, in the same form
of property as, any such payment or distribution made to the holders of any
Parity Stock ranking on a parity basis with the Series H Preferred Stock with
respect to distributions upon liquidation, dissolution or winding





                                     - 11 -
<PAGE>   208
up of the Company.  The holders of Series H Preferred Stock shall be entitled
to no other or further distribution of or participation in any remaining assets
of the Company after receiving the Liquidation Preference per share.  If, upon
distribution of the Company's assets in liquidation, dissolution or winding up,
the assets of the company to be distributed among the holders of the Series H
Preferred Stock and to all holders of any Parity Stock ranking on a parity
basis with the Series H Preferred Stock with respect to distributions upon
liquidation, dissolution or winding up shall be insufficient to permit payment
in full to such holders of the respective preferential amounts to which they
are entitled, then the entire assets of the Company to be distributed to holders
of the Series H Preferred Stock and such Parity Stock shall be distributed pro
rata to such holders based upon the aggregate of the full preferential amounts
to which the shares of Series H Preferred Stock and such Parity Stock would
otherwise respectively be entitled.  Neither the consolidation or merger of the
Company with or into any other corporation or corporations nor the sale,
transfer, or lease of all or substantially all of the assets of the Company
shall itself be deemed a liquidation, dissolution or winding up of the Company
within the meaning of this paragraph 4.  Notice of the liquidation, dissolution
or winding up of the Company shall be given, not less than twenty (20) days 
prior to the date on which such liquidation, dissolution or winding up is 
expected to take place or become effective to the holders of record of the 
shares of Series H Preferred Stock.

         5.  Redemption.

         (a)  Optional Redemption.  Subject to the rights of any Senior Stock
and the provisions of paragraph 6 of this Certificate of Designation, the
shares of Series H Preferred Stock may be redeemed, at the option of the
Company by action of the Board of Directors, in whole or from time to time in
part, on any Business Day occurring on or after February 1, 2001, at the
Redemption Price on the Redemption Date.  If fewer than all of the outstanding
shares of Series H Preferred Stock are to be redeemed on any Redemption Date,
the shares of Series H Preferred Stock to be redeemed shall be chosen by the
Company pro rata (as nearly as may be practicable) among all holders of Series
H Preferred Stock.  The Company shall not be required to register a transfer of
(i) any shares of Series H Preferred stock for a period of 15 days next
preceding any selection of shares of Series H Preferred Stock to be redeemed or
(ii) any shares of Series H Preferred Stock selected or called for redemption.

         (b)  Mandatory Redemption.  Subject to the rights of any Senior Stock
and the provisions of paragraph 6 of this Certificate of Designations, the
Company shall redeem, out of funds legally available therefor, on February 1,
2016 (or, if such day is not a Business Day, on the first Business Day
thereafter) all shares of Series H Preferred Stock remaining outstanding at the
Redemption Price on the Redemption Date.  If the funds of the Company legally
available for redemption of shares of the Series H Preferred Stock and any
Parity Stock then required to be redeemed are insufficient to redeem the total
number of such shares remaining outstanding, those funds which are legally
available shall, subject to the rights of any Senior Stock and the provisions
of paragraph 6, to be used to redeem the maximum possible number of shares of
Series H Preferred Stock and each such other class or series of Parity Stock.
Subject to the rights of any Senior Stock and the provisions of paragraph 6
hereof, at any time and from time to time





                                     - 12 -
<PAGE>   209
thereafter when additional funds of the Company are legally available for such
purpose, such funds shall immediately be used to redeem the shares of Series H
Preferred Stock and of each such other class or series of Parity Stock which
were required to be redeemed that the Company 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.

         (c)  Notice of Redemption.  Notice of redemption shall be given by or
on behalf other the Company at least sixty (60) days prior to the Redemption
Date, in the case of a redemption pursuant to paragraph 5(a) and not more than
sixty (60) days nor less than thirty (30) days prior to the Redemption Date, in
the case of the redemption pursuant to paragraph 5(b), to the holders of record
of the shares of Series H Preferred Stock to be redeemed; but no defect in such
notice or in the mailing thereof shall affect the validity of the proceedings
for the redemption of any shares of Series H Preferred Stock.  In addition to
any information required by law or by the applicable rules of an national
securities exchange or national interdealer quotation system on which the
Series H Preferred Stock may be listed or admitted to trading or quoted, such
notice shall set forth the Redemption Price, the Redemption Date, the number of
shares to be redeemed and the place at which the shares called for redemption
will, upon presentation and surrender of the stock certificates evidencing such
shares, be redeemed, and if the Company has elected to deposit the Redemption
Price with a Redemption Agent in accordance with paragraph 5(d), shall state
the name and address of the Redemption Agent and the date on which such deposit
was or will be made.  Such notice shall also set forth the then current
Conversion Rate for the shares of Series H Preferred Stock and the place or
places to which a holder desiring to convert shares of Series H Preferred Stock
should deliver the certificate(s) evidencing such shares, together with such
other documents and instruments as are or may be required pursuant to paragraph
7 of this Certificate of Designations.  In the event that fewer than the total
number of shares of Series H preferred Stock represented by a certificate are
redeemed, a new certificate representing the number of unredeemed shares will
be issued to the holder thereof without cost to such holder.  If the shares of
Series H Preferred Stock evidenced by a certificate selected for partial
redemption pursuant to paragraph 5(a) of this Certificate of Designations are
thereafter converted in part pursuant to paragraph 7 hereof, the shares so
converted (as far as may be) will be deemed to be the shares selected for
redemption.

         (d)  Deposit of Redemption Price.  If notice of any redemption by the
Company pursuant to this paragraph 5 shall have been given as provided in
paragraph 5(c) of this Certificate of Designations and if on or before the
Redemption Date specified in such notice an amount in cash sufficient to redeem
in full on the Redemption Date at the Redemption Price all shares of Series H
Preferred Stock call for redemption or required to be redeemed shall have been
set apart so as to be available for such purpose and only for such purpose,
then effective as of the close of business on the Redemption Date, the shares
of Series H Preferred Stock called for redemption, notwithstanding that any
certificate therefor shall not have been surrendered for cancellation, shall no
longer be deemed outstanding, and the holders thereof shall cease to be
stockholders with respect to such shares and all remaining rights with respect
to such shares shall





                                     - 13 -
<PAGE>   210
forthwith cease and terminate, except the right of the holders thereof to
receive the Redemption Price of such shares, without interest, upon the
surrender of certificates representing the same.

         At its election, the Company on or prior to the Redemption Date (but
no more than ninety (90) days prior to the Redemption Date) may deposit
immediately available funds in an amount equal to the aggregate Redemption
Price of the shares of Series H Preferred Stock called for redemption in trust
for the holders thereof with any bank of 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 Company, to mail the notice of redemption 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 the Redemption Date or prior thereto, the Redemption Price of the
shares of Series H Preferred Stock to be redeemed to their respective holders
upon the surrender of the certificates therefor. A deposit made in compliance
with the immediately receding sentence shall be deemed to constitute full
payment for the shares of Series H 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 the Redemption Date) or the date notice of redemption is mailed, the
shares of Series H 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 convert such shares in
accordance with paragraph 7 prior to the close of business on the Business Day
immediately preceding the Redemption Date.  Any funds so deposited which shall
not be required for the payment of the Redemption Price of any shares of Series
H Preferred Stock to be redeemed because of the conversion of such shares shall
after such conversion be repaid to the Company by the Redemption Agent.  Any
interest accrued on the funds so deposited shall be paid to the Company from
time to time.  Any funds so deposited with the Redemption Agent which shall
remain unclaimed by the holders of such shares of Series H Preferred Stock at
the end of one year after the Redemption Date shall be returned by the
Redemption Agent to the Company, after which repayment the holders of such
shares of Series H Preferred Stock called for redemption shall look only to the
Company for the payment thereof, without interest, unless an applicable escheat
or abandoned property law otherwise requires.

         6.  Limitations on Dividends and Redemptions.  If at any time the
Company shall have failed to pay, or declare and set aside the consideration
sufficient to pay, full cumulative dividends for all prior dividend periods on
any Parity Stock which by the terms of the instrument creating or evidencing
such Parity Stock which by the terms of the instrument creating or evidencing
such Parity Stock is entitled to the payment of such cumulative dividends prior
to the redemption, exchange, purchase or other acquisition of the Series H
Preferred Stock, and until full cumulative dividends on such Parity Stock for
all prior dividend periods are paid, or declared and the consideration
sufficient to pay the same in full is set aside so as to be available for such
purpose and no other purpose, neither the Company nor any Subsidiary thereof
shall redeem, exchange, purchase or otherwise acquire any shares of Series





                                     - 14 -
<PAGE>   211
H Preferred Stock, Parity Stock or Junior Stock, or set aside any money or
assets for any such purpose pursuant to paragraph 5(d) hereof, any sinking fund
or otherwise, unless all then outstanding shares of Series H Preferred Stock,
of such Parity Stock and of any other class or series of Parity Stock that by
the terms of the instrument creating or evidencing such Parity Stock is
required to be redeemed under such circumstances are redeemed pursuant to the
terms hereof and thereof.

         If at any time the Company shall have failed to pay, or declare and
set aside the consideration sufficient to pay, full cumulative dividends on the
Series H Preferred Stock for all Dividend Periods ending on or before the
immediately preceding Dividend Payment Date, and until full cumulative
dividends on the Series H Preferred Stock for all Dividend Periods ending on or
before the immediately preceding Dividend Payment Date, and until full
cumulative dividends on the Series H Preferred Stock for all dividend Periods
ending before the immediately preceding Dividend Payment Date are paid, or
declared and the consideration sufficient to pay the same in full is set aside
so as to be available for such purpose and no other purpose, (i) neither the
Company nor any Subsidiary thereof shall redeem, exchange, purchase or
otherwise acquire any shares of Series H Preferred Stock, Parity Stock, or
Junior Stock, or set aside any money or assets for any such purpose pursuant to
paragraph 5(d) hereof, any sinking fund or otherwise, unless all then
outstanding shares of Series H Preferred Stock and of any other class or series
of Parity Stock that by the terms of the instrument creating or evidencing such
Parity Stock is required to be redeemed under such circumstances are redeemed
or exchanged pursuant to the terms hereof and thereof, and (ii) the Company
shall not declare or pay any dividend on or make any distribution with respect
to any Junior Stock or Parity Stock or set aside any money or assets for any
such purpose, except that the Company may declare and pay a dividend on any
Parity Stock ranking on a parity basis with the Series H Preferred Stock with
respect to the right to receive dividend payments, contemporaneously with the
declaration and payment of a dividend on the Series H Preferred Stock, provided
that such dividends are declared and paid pro rata so that the amount of
dividends declared and paid per share of Series H Preferred Stock and such
Parity Stock shall in all cases bear to each other the same ratio that
accumulated and accrued and unpaid dividends per share on the Series H
Preferred Stock and such Parity Stock bear to each other.           

         If the Company shall fail to redeem on any date fixed for redemption
pursuant to paragraph 5(a) or 5(b) of this Certificate of Designations any
shares of Series H Preferred Stock called for redemption or required to be
redeemed on such date, and until such shares are redeemed in full, the Company
shall not (x) redeem any Junior Stock or, except as provided in paragraph 5(b)
hereof, Parity Stock or (y) declare or pay any dividend on or make any
distribution with respect to any Junior Stock or, except as provided in the
second paragraph of this paragraph 6, Parity Stock, or set aside any money or
assets for any such purpose, and neither the Company nor any Subsidiary thereof
shall purchase or otherwise acquire any Series H Preferred Stock, Parity Stock
or Junior Stock, or set aside any money or assets for any such purpose.

         Nothing contained in the first or third paragraph of this paragraph 6
shall prevent (i) the payment of dividends on any Junior Stock solely in shares
of Junior Stock or the redemption, purchase or other acquisition of Junior
Stock solely in exchange for (together with





                                     - 15 -
<PAGE>   212
a cash adjustment for fractional shares, if any), or (but only in the case of
the first paragraph of this paragraph 6) through the application of the
proceeds from the sale of shares of Junior Stock; (ii) the payment of dividends
on any Parity Stock solely in shares of Parity Stock and/or Junior Stock or the
redemption, exchange, purchase or other acquisition of Series H Preferred Stock
or Parity Stock solely in exchange for (together with a cash adjustment for
fractional shares, if any), or (but only in the case of the first paragraph of
this paragraph 6) through the application of the proceeds from the sale of,
shares of Parity Stock and/or Junior Stock; or (iii) the purchase or
acquisition of shares of Series H Preferred Stock pursuant to a purchase or
exchange offer made to all holders of outstanding shares of Series H Preferred
Stock, provided that the terms of the purchase or exchange offer shall be
identical for all shares of Series H Preferred Stock and all accrued dividends
on such shares shall have been paid or shall have been declared and irrevocably
set apart in trust for the benefit of the holders of shares of Series H
Preferred Stock and for no other purpose.                                 

         The provisions of the first paragraph of this paragraph 6 are for the
sole benefit of the holders of Series H Preferred Stock and Parity Stock having
the terns described therein and accordingly, at any time when there are no
shares of any such class or series of Parity Stock outstanding or if the
holders of each such 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 such provisions (either generally or in the specific instance), then
the provisions of the first paragraph of this paragraph 6 shall not (to the
extent waived, in the case of any partial waiver) restrict the redemption,
exchange, purchase or other acquisition of any shares of Series H Preferred
Stock, Parity Stock or Junior Stock.  All other provisions of this paragraph 6
are for the sole benefit of the holders of Series H Preferred Stock and
accordingly, if the holders of shares of Series H Preferred Stock shall have
waived as provided in paragraph 10 of this Certificate of Designations) in
whole or in part the benefit of the applicable provision, either generally or
in the specific instance, such provision shall not (to the extent of such
waiver, in the case of a partial waiver) restrict the redemption, exchange,
purchase or other acquisition of, or declaration, payment or making of any
dividends or distributions on, the Series H Preferred Stock, any Parity Stock
or any Junior Stock.

         7.  Conversion of Series H Preferred Stock.

         (a)  Right to Convert.  Unless previously redeemed as provided in
paragraph 5 of this Certificate of Designations, shares of Series H Preferred
Stock may be converted at the option of the holder thereof, in the manner and
upon the terms and conditions set forth in this paragraph 7, into fully paid
and nonassessable whole shares of Series A Liberty Media Group Common Stock at
the Conversion Rate in effect on the Conversion Date, at any time prior to the
close of business on the Business Day immediately preceding the Redemption Date
for the redemption of shares of Series H Preferred Stock pursuant to paragraph
5(a) or 5(b) of this Certificate of Designations.

         (b)  Mechanics of Conversion.  In order to convert shares of Series H
Preferred Stock, the holder thereof shall surrender the certificate or
certificates representing the shares of





                                     - 16 -
<PAGE>   213
Series H Preferred Stock to be converted at the office of the Company or the
office of any transfer agent for the Series H Preferred Stock, which
certificate or certificates shall be duly endorsed to the Company in blank (or
accompanied by duly executed instruments of transfer to the Company in blank)
with signatures guaranteed (such endorsements or instruments of transfer to be
in form satisfactory to the Company), together with a written notice to the
Company at said office of the election to convert the same, specifying the
number of shares of Series H Preferred Stock to be converted and the name or
names (with addresses) in which the certificate or certificates for shares of
Series A Liberty Media Group Common Stock are to be issued.  If any transfer
certificates for shares of Series A Liberty Media Group Common Stock are to be
issued.  If any transfer is involved in the issuance or delivery of any
certificate or certificates for shares of Series A Liberty Media Group Common
Stock in a name other than that of the registered holder of the shares of
Series H Preferred Stock surrendered for conversion, such holder shall also
deliver to the Company a sum sufficient to pay all taxes, if any, payable is
respect of such transfer or evidence satisfactory to the company that such
taxes have been paid.  Except as provided in the immediately preceding
sentence, the Company shall pay any issue, stamp or other similar tax in
respect of such issuance or delivery.

         The Company shall, as soon as practicable after the Conversion Date,
deliver to the holder of the shares of Series H Preferred Stock so surrendered
for conversion, or to such holder's nominee(s) or, subject to compliance with
applicable law, transferee(s), a certificate or certificates for the number of
whole shares of Series A Liberty Media Group Common Stock to which such holder
shall be entitled, together with cash or its check in lieu of any fractional
share as provided in paragraph 7(o).  If the shares of Series H Preferred Stock
represented by a certificate surrendered for conversion are converted only in
part, the Company will also issue and deliver to the holder, or to such
holder's nominee(s) or, subject to compliance with applicable law,
transferee(s), without charge therefor, a new certificate or certificates
representing in the aggregate the unconverted shares of Series H Preferred
Stock.

         The Person in whose name the certificate for shares of Series A
Liberty Media Group Common Stock is issued upon such conversion shall be
treated for all purposes as the stockholder of record of such shares of Series
A Liberty Media Group Common Stock as of the close of business on the
Conversion Date; provided, however, that no surrender of Series H Preferred
Stock on any date when the stock transfer books of the Company are closed for
any purpose shall be effective to constitute the Person or Persons entitled to
receive the shares of Series A Liberty Media Group Common Stock on such date,
but such surrender shall be effective (assuming all other requirements of this
paragraph 7 have been satisfied) to constitute such Person or Persons as the
record holders of such shares of Series A Liberty Media 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 conversion shall be at the
Conversion Rate in effect on the date that such shares of Series H Preferred
Stock were surrendered for conversion (and such other requirements satisfied)
as if the stock transfer books of the Company had not been closed on such date.
upon conversion of shares of Series H Preferred stock, the rights of the holder
of the shares so converted as a holder thereof, will cease.





                                     - 17 -
<PAGE>   214
         Notwithstanding the last sentence of the immediately preceding
paragraph, if the Board of Directors declares any dividend on the Series H
Preferred Stock pursuant to paragraph 3 of this Certificate of Designations,
and the Conversion Date for any shares of Series H Preferred Stock occurs on or
after the Record Date or Special Record Date, as the case may be, and before
the Dividend payment Date for such dividend (or, in the case of a dividend
declared pursuant to Section 3(d), then the holder of such shares of Series H
Preferred Stock on such Record Date shall be entitled to receive such dividend
on such Dividend Payment Date (or such other date, as the case may be), as if
such Conversion Date had not occurred.

         (c)  Adjustments for Change in Capital Stock.  If after the Issue
Date, the Company:

                 (i)  pays a dividend or makes a distribution on the Series A
         Liberty Media Group Common Stock in shares of Series A Liberty Media
         Group Common Stock;

                 (ii)  subdivides the outstanding shares of Series A Liberty
         Media Group Common Stock into a greater number of shares;

                 (iii) combines the outstanding shares of Series A Liberty
         Media Group Common Stock into a smaller number of shares;

                 (iv)  pays a dividend or makes a distribution on the Series A
         Liberty Media Group Common Stock in shares of its capital stock (other
         than Section A Liberty Media Group Common Stock or rights, warrants or
         options for its capital stock), or

                 (v)  issues by reclassification of its shares of Series A
         Liberty Media Group Common Stock (other than a reclassification by way
         of merger or binding share exchange that is subject to paragraph 7(f))
         any shares of its capital stock (other than rights, warrants or
         options for its capital stock).

then, subject to the following sentence and to paragraph 7(j), the conversion
privilege and the Conversion Rate in effect immediately prior to the opening of
business on the record date for such dividend or distribution or the effective
date of such subdivision, combination or reclassification shall be adjusted so
that the holder of any shares of Series H Preferred Stock thereafter converted
may receive the kind and number of shares of capital stock of the Company which
such holder would have owned immediately following such event if such holder
had converted his shares of Series H 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 (iv) of (v) above
would result in the shares of Series H Preferred Stock being convertible into
shares or units (or a fraction thereof) of more than one class or series of
capital stock of the Company and any such class or series of capital stock
(other than Series A                                 





                                     - 18 -
<PAGE>   215
Liberty Media Group Stock) provides by its terms a right in favor the Company
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") then, at the option of the
Company, the conversion privilege and Conversion Rate of the Series H Preferred
Stock shall not be adjusted pursuant to this paragraph 7(c) and in lieu
thereof, but subject to paragraph (j), the adjustments to the Conversion Rate
contemplated by paragraph 7(e) shall be made with the same effect as if the
dividend or distribution of Redeemable Capital Stock or the issuance of the
additional class or series of Redeemable Capital stock by reclassification had
been a distribution of assets of the Company.

         The adjustment contemplated by this paragraph 7(c) shall be made
successively whenever any event listed above shall occur.  For a dividend or
distribution, the adjustment shall become effective immediately after the
record date for the dividend or distribution.  For a subdivision, combination
or reclassification, the adjustment shall become effective immediately after
the effective date of the subdivision, combination or reclassification.

         If after an adjustment a holder of Series H Preferred Stock would be
entitled to receive upon conversion thereof shares of two or more classes or
series of capital stock of the Company, the Conversion 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 as is contemplated by this paragraph
7 with respect to the Series A Liberty Media Group Common Stock, on terms
comparable to those applicable to the Series A Liberty Media Group Common Stock
pursuant to this paragraph 7.

         Any shares of Series A Liberty Media Group Common Stock issuable in
payment of a dividend shall be deemed to have been issued immediately prior to
the time of the record date for such dividend for purposes of calculated the
number of outstanding shares of Series A Liberty Media Group Common Stock under
paragraphs 7(d) and 7(e) below.

         (d)  Adjustment for Rights Issue.  If, after the Company distributes
any rights, warrant or options to holders of shares of Series A Liberty Media
Group Common Stock entitling them for a period expiring within 45 days after
the record date of the determination of stockholders entitled to receive such
distribution, to purchase shares of Series A Liberty Media Group Common Stock
(or Convertible Securities) as a price per share (or having a 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 Liberty Media Group
Common Stock issuable upon conversion of such Convertible Securities) less than
the Current Market Price on the Determination Date, the Conversion Rate in
effect immediately prior to the opening of business on such record date by a
fraction, of which the numerator shall be the number of shares of Series A
Liberty Media Group Common Stock outstanding on such record date plus the
number of shares of Series A Liberty Media Common Stock which the aggregate
offering price of the total number of shares of Series A Liberty Media Group
Common Stock so offered

                      



                                     - 19 -
<PAGE>   216
(or the aggregate conversion price of the Convertible Securities to be 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 Liberty Media Group Common Stock (and to the holders of Convertible
Securities and Series B Liberty Media Group Common Stock referred to in the
immediately succeeding paragraph of this paragraph 7(d) if the distribution to
which this paragraph 7(d) applies is also being made to such holders) would
purchase at such Current Market Price, and of which the denominator shall be
the number of shares of Series A Liberty Media Group Common Stock outstanding
on such record date plus the number of additional shares of Series A Liberty
Media Group Common Stock so offered to the holders of Series A Liberty Media
Group Common Stock (and to such holders of Convertible Securities and Series B
Liberty Media Group Common Stock) for subscription or purchase (or into which
the Convertible Securities so offered are convertible).  Shares of Series A
Liberty Media Group Common Stock owned by or held for the account of the
Company shall not be deemed to be outstanding the propose of any such
adjustment.

         For purposes of this paragraph 7(d) the number of shares of Series A
Liberty Media Group Common Stock outstanding on any record date shall be deemed
to include (i) the maximum number of shares of Series A Liberty Media Group
Common Stock the issuance of which would be necessary to effect the full
exercise, exchange or conversion of all Convertible Securities 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 paragraph 7(d) is being applied) equal or less than
the Current Market Price per share of Series A Liberty Media 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 Liberty
Media Group Common Stock is then convertible into Series A Liberty Media Group
Common Stock, the maximum number of shares of Series A Liberty Media Group
Common Stock the issuance of which would be necessary to effect the full
conversion of all shares of Series B Liberty Media Group Common Stock
outstanding on such record date, if all of such shares of Series B Liberty
Media 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 paragraph 7(d) shall be made
successively whenever any such rights, warrants or options are issued, and
shall become effective immediately after the record date for the determination
of stockholders entitled to receive the rights, warrants or options.  If all of
the share of Series A Liberty Media Group Common Stock (or all of the
Convertible Securities) 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 which have been
exercised, if all of the shares of Series A Liberty Media Group Common Stock
issuable upon conversion of such Convertible Securities have not been issued
prior to the expiration of the conversion right hereof), then the Conversion
Rate shall promptly be readjusted to the Conversion 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 Liberty Media
Group Common Stock (or Convertible Securities) issued





                                     - 20 -
<PAGE>   217
upon the exercise of such rights, warrants or options (or conversion  of such
Convertible Securities).

         No adjustment shall be made under this paragraph 7(d) if the adjusted
Conversion Rate would be lower than the Conversion Rate in effect immediately
prior to such adjustment.

         (e)  Adjustments for Other Distributions.  If, after the Issue Date
(i) the Company distributes to all holders of shares of Series A Liberty Media
Group Common Stock any assets or debt securities or any rights, warrants or
options to purchase securities (excluding (x) dividends or distributions
referred to in paragraph 7(c) (except as otherwise provide in clause (ii) of
this sentence) and distributions of rights, warrants or options referred to in
paragraph 7(d) and (y) cash dividends or other cash distributions, unless such
cash dividends or cash distributions are Extraordinary Cash Dividends), or (ii)
the Company makes a dividend or distribution of Redeemable Capital Stock on, or
issues Redeemable Capital Stock by reclassification of, the Series A Liberty
Media Group Common Stock by reclassification of, the Series A Liberty Media
Group Common Stock and determines pursuant to paragraph 7(c) to treat the same
as a distribution of assets of the Company subject to this paragraph 7(e),
then in each such event the Conversion Rate shall be adjusted by dividing the
Conversion Rate in effect immediately prior to the opening of business on (A)
the record date for the determination of stockholders entitled to receive the
distribution or (B) 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 or Series A Liberty Media Group Common Stock outstanding on
such record date or immediately prior to such effective date multiplied by the
Current Market price on the Determination Date, less the fair market value (as
determined in good faith by the Board of Directors) on such record date or
effective date of said assets (or Redeemable Capital Stock) or debt securities
or rights, warrants or options so distributed to the holders of Series A
Liberty Media Group Common Stock (and to the holders of Convertible Securities
and Series B Liberty Media Group Common Stock referred to in the immediately
succeeding paragraph of this paragraph 7(e) if the distribution to which this
paragraph 7(e) applies is also being made to such holders), and of which the
denominator shall be the total number of shares of Series A Liberty Media Group
Common Stock outstanding on such record date or immediately prior to such
effective date multiplied by such Current Market Price.

         For purposes of this paragraph 7(e), the number of shares of Series A
Liberty Media Group Common Stock outstanding on any relevant date shall be
deemed to include (i) the maximum number of shares of Series A Liberty Media
Group Common Stock the issuance of which would be 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 distribution to which
this paragraph 7(e) 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 Liberty Media Group Stock is then convertible into Series A Liberty
Media Group Common Stock the issuance of which would be necessary to effect the
full conversion of all





                                     - 21 -
<PAGE>   218
shares of Series B Liberty Media Group Common Stock outstanding on such date,
if all of such shares of Series B Liberty Media Group Common Stock were deemed
to have been converted immediately prior to the opening of business on such
date.

         For purposes of this paragraph 7(e), the term "Extraordinary Cash
Dividend" shall mean any cash dividend with respect to the Series A Liberty
Media Group Common Stock the amount of which, together with the aggregate
amount of cash dividends on the Series A Liberty Media 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 below
in the following sentence.  If, upon the date prior to the Ex-Dividend Date
with respect to a cash dividend on Series A Liberty Media Group Common Stock,
the aggregate of the amount of such cash dividend together with the amounts of
all cash dividends on the Series A Liberty Media Group Common Stock with
Ex-Dividend Dates occurring in the 365 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
Conversion Rate was previously made under this paragraph 7(e)) 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 days prior to the date immediately prior to the Ex-Dividend Date
with respect to the cash dividend to which this provision has been applied),
such cash dividend together with each other cash dividend to which this
provision is being applied), such cash dividend with an Ex-Dividend Date
occurring in such 365-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 paragraph
7(e) shall be made successively whenever any distribution to which this
paragraph 7(e) applies is made, and shall become effective immediately after
the record date for the determination of stockholders entitled to receive the
distribution (or, in the case of a reclassification, the effective date).
Shares of Series A Liberty Media Group Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such adjustment.

         No adjustment shall be made under this paragraph 7(e) if the adjusted
Conversion Rate would be lower than the conversion rate in effect prior to such
adjustment.  In the event that, with respect to any distribution to which this
paragraph 7(e) would otherwise apply, the numerator of the fraction in the
formula set forth in the first paragraph of this paragraph 7(e) is zero or a
negative number, then the adjustment provided by this paragraph 7(e) shall not
be made.  If the Company makes a distribution to all holders of its Series A
Liberty Media Group Common Stock of any of its assets or debt securities or any
rights, warrants or options to purchase securities of the Company that, but for
the immediately preceding sentence, would otherwise result in an adjustment in
the Conversion Rate pursuant to the foregoing provisions of this paragraph
7(e), then, from and after the record date for determining the holders of
Series A





                                     - 22 -
<PAGE>   219
Liberty Media Group Common Stock entitled to receive the distribution, a holder
of Series H Preferred Stock that converts such shares in accordance with the
provisions of this paragraph 7 will upon such conversion be entitled to
receive, in addition to the shares of Series A Liberty Media Group Common
Stock into which such shares of Series H Preferred Stock are convertible, the
kind and amount of securities, cash or other assets comprising the distribution
that such holder would have received if such holder had converted such shares
of Series H Preferred Stock immediately prior to the record date for
determining the holders of Series A Liberty Media Group Common Stock entitled
to receive the distribution.

         (f)  Consolidation, Merger or Sale of the Company.  If the Company
consolidates with or merges into, or transfers (other than by mortgage or
pledge) its properties and assets substantially as an entirety to, another
Person or Company is a party to a merger or binding share exchange which
reclassifies or changes its outstanding Series A Liberty Media Group Common
Stock, the Company (or its successor in such transaction) or the transferee of
such properties and assets shall make appropriate provision so that the
holders of the shares of Series H Preferred Stock then outstanding shall have
the right thereafter to convert such shares into the kind and amount of
securities, cash or other assets receivable upon such transaction by a holder
of the number of shares of Series A Liberty Media Group Common Stock, the
Company (or its successor in such transaction) or the transferee of such
properties and assets shall make appropriate provision so that the holders of
the shares of Series H Preferred Stock then outstanding shall have the right
thereafter to convert such shares into the kind and amount of securities, cash
or other assets receivable upon such transaction by a holder of the number of
shares of Series A Liberty Media Group Common Stock into which such shares of
Series H Preferred Stock could have been converted immediately before the
effective date of such transaction (assuming, to the extent applicable, that
such holder failed to exercise any rights of election with respect thereto and
received per share of Series A Liberty Media Group Common Stock the kind and
amount of securities, cash or other assets received per share by a plurality of
the non-electing shares of Series A Liberty Media Group Common Stock), and the
holders of the Series H Preferred Stock shall have no other conversion rights
under these provisions; provided that (i) effective provision shall be made, in
the Articles or Certificate of Incorporation of the resulting or surviving
corporation or otherwise or in any contracts of sale or transfer, so that the
provisions set forth herein for the protection of the conversion rights of
Series H Preferred Stock shall thereafter be made applicable, as nearly as
reasonable may be, to any such other securities and assets deliverable upon
conversion of the Series H Preferred Stock remaining outstanding or other
convertible preferred stock or other securities received by the holders of
Series H Preferred Stock in place thereof, and (ii) any such resulting or
surviving corporation or transferee shall expressly assume the obligation to
deliver, upon the exercise of the conversion privilege, such securities, cash
or other assets as the holders of the Series H Preferred Stock remaining
outstanding, or other convertible preferred stock or other securities received
by the holders in place thereof, shall be entitled to receive pursuant to the
provisions hereof, and to make provision for the protection of the conversion
rights of the Series H Preferred Stock, or of any other convertible preferred
stock or other securities received by the holders in place thereof, as provided
in clause (i) of this sentence.

         If this paragraph 7(f) applies, paragraphs 7(c), 7(d) and 7(e) apply.

         (g)  Effect of Redemption.  Subject to paragraph 7(j) and to the
remaining provisions of this paragraph 7(g), in the event that (i) the Company
redeems all, and not less than all, of the outstanding shares of Series A 
Liberty Media Group Common Stock in accordance





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with the terms thereof or (ii) a holder of Series H Preferred Stock would be
entitled to receive upon conversion thereof pursuant to this paragraph 7 any
Redeemable Capital Stock and the Company redeems, exchanges or otherwise
acquires all of the outstanding shares or other units of such Redeemable
Capital Stock (such event referred to in clause (i) and (ii) being a
"Redemption Event"), then, from and after the effective date of such Redemption
Event, the holders of shares of Series H Preferred Stock then outstanding shall
be entitled to receive upon conversion 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 into which such shares of
Series H Preferred Stock could have been converted 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 shares or unit by 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
holders of the Series H Preferred Stock shall have no other conversion rights
under these provisions with respect to such Redeemable Capital Stock, as the
case may be.

         Notwithstanding the foregoing, if the redemption price for the shares
of Series A Liberty Media Group Common Stock or Redeemable Capital Stock
is paid in whole or in part in Redemption Securities, and the Mirror Preferred
Stock Condition is met, the Series H Preferred Stock shall not be convertible
into such Redemption Securities and, from and after the applicable redemption
date, the holders of any shares of Series H Preferred Stock that have not been
exchanged for Mirror Preferred Stock shall have no conversion rights under
these provisions except for any conversion right that may have existed
immediately prior to the effective date of the Redemption Event with respect to
any securities, cash or other assets other than the Series A Liberty Media
Group Common Stock or Redeemable Capital Stock so redeemed.  The Mirror
Preferred Stock Condition will be met in connection with a redemption of the
Series A Liberty Media Group Common Stock or the Redeemable Capital Stock into
which the Series H Preferred Stock is then convertible, assuming that the
Series H Preferred Stock is not then convertible into any other security, cash
or other assets, if the Company makes appropriate provision so that the holders
of the Series H Preferred Stock have the right to exchange their shares of 
Series H Preferred Stock on the effective date of the Redemption Event for 
shares of Mirror Preferred Stock of the issuer of the Redemption Securities, 
which Mirror Preferred Stock shall have an aggregate initial liquidation 
preference equal to the aggregate Liquidation Preference of the shares of 
Series H Preferred Stock exchanged therefor.

         If before giving effect to a Redemption Even, a holder of Series H
Preferred Stock would be entitled to receive upon conversion of such Series H
Preferred Stock any Securities, cash (other than cash in lieu of fractional
securities) or other assets in addition to the Series A Liberty Media Group
Common Stock or Redeemable Capital Stock being redeemed, and





                                     - 24 -
<PAGE>   221
the redemption price payable upon such Redemption Event will include Redemption
Securities, then to satisfy the Mirror Preferred Stock Condition, the Company
would be required to make appropriate provision so that the holders of the
Series H Preferred Stock have the right to exchange their shares of Series H
Preferred Stock on the effective date of the Redemption Event for Exchange
Preferred Stock of the Company and Mirror Preferred Stock of the issuer of the
Redemption Securities.  The sum of the initial liquidation preferences of the
shares of Exchange Preferred Stock and Mirror Preferred Stock delivered in
exchange for a share of Series H Preferred Stock will equal the Liquidation
Preference of a share of Series H Preferred Stock on the effective date of the
Redemption Event.  The Mirror Preferred Stock will have an aggregate initial
liquidation preference equal to the product of the aggregate Liquidation
Preference of the shares of Series H Preferred Stock exchanged therefor and the
quotient of (x) the product of the Conversion Rate for the Series A Liberty
Media Group Common Stock or Redeemable Capital stock to be redeemed (determined
immediately prior to the effective date of the Redemption Event) and the
average of the daily Closing Prices of the Series A Liberty Media Group Common
Stock or Redeemable Capital Stock, as the case may be, for the period of ten
consecutive trading days ending on the third trading day prior to the effective
date of the Redemption event, divided by (y) the sum of the amount determined
pursuant to clause (x), plus the fair value of the securities (other than those
being redeemed), cash or other assets that would have been receivable by a
holder of Series H Preferred Stock upon conversion thereof immediately prior to
the effective date of the Redemption event (such fair value to be determined in
the case of securities with a Closing Price in the same manner as provided in
clause (x) and otherwise by the Board of Directors in the exercise of its good
faith judgment).  The shares of exchange Preferred stock will have an aggregate
initial liquidation preference equal to the difference between the aggregate
Liquidation Preference of the shares of Series H Preferred Stock exchanged
therefore and the aggregate initial liquidation preference of the Mirror
Preferred Stock.

         When used in connection with a redemption by the Company of any
redeemable Capital Stock into which the Series H Preferred stock is then
convertible, the following terms have the following meanings:

                 (i)  "Redemption Securities' means securities of an issuer
         other than the Company that are distributed by the company, in
         payment, in whole or in part, of the redemption price for the Series A 
         Liberty Media Group Common Stock or such Redeemable Capital Stock.

                 (ii)  "Mirror Preferred Stock" means convertible preferred
         stock issued by the issuer of the Redemption Securities and having
         terms, conditions, designations, dividend rights, voting powers,
         rights on liquidation and other preferences and relative,
         participating, optional or other special rights, and qualifications,
         limitations or restrictions thereof that are identical, or as nearly
         so as is practicable in the good faith judgment of the Board of
         Directors, to those of the Series H Preferred Stock for which such
         Mirror Preferred Stock is exchanged, except that (x) the liquidation
         preference will be determined as provided above in this paragraph
         7(g), (y) the running of any time periods pursuant to the terms of





                                     - 25 -
<PAGE>   222
         the Series H Preferred Stock shall be tacked to the corresponding time
         periods in the Mirror Preferred stock and (z) the Mirror Preferred
         stock shall be convertible into the kind and amount of Redemption
         Securities, cash and other assets that the holder of a share of Series
         H Preferred Stock in respect of which such Mirror Preferred Stock is
         issued pursuant to the terms hereof would have received upon
         redemption of the Series A Liberty Media Group Common Stock or 
         Redeemable Capital Stock, as the case may be, had such shares of 
         Series H Preferred Stock been converted prior to the effective date 
         of the Redemption Event.

                 (iii)  "Exchange Preferred Stock" means a series of
         convertible preferred stock of the company having terms, conditions,
         designations, dividend rights, voting powers, rights on liquidation
         and other preferences and relative, participating, optional or other
         special rights, and qualifications, limitations or restrictions
         thereof that are identical, or as nearly so as is practicable in the
         good faith judgment of the Board of Directors, to those of the Series
         H Preferred Stock for which such Exchange Preferred Stock is
         exchanged, except that (x) the liquidation preference will be
         determined as provided above in this paragraph 7 (g), (y) the running
         of any time periods pursuant to the terms of the Series H Preferred
         Stock and (z) the Exchange Preferred Stock will not be convertible
         into, and the holders will have no conversion rights thereunder with
         respect to, the Redeemable Capital Stock redeemed in th Redemption
         Event.

         Notwithstanding the second paragraph of this paragraph 7(g), the
Mirror Preferred Stock condition shall only be deemed to have been satisfied in
connection with any Redemption Event if, in the good faith determination of the
Board of Directors: (i) receipt of Mirror Preferred stock and/or Exchange
Preferred Stock in exchange for Series H Preferred Stock pursuant to the second
paragraph of this paragraph 7(g) would not result in the recognition of gain or
loss by the holders of such Series H Preferred Stock for United States federal
income tax purposes; (ii)  an adjustment made in the Conversion Rate of the
Series H Preferred Stock with respect to such Redemption Event, as provided in
the first paragraph of this paragraph of this paragraph 7(g), would result in
the recognition of gain or loss by the holders of Series H Preferred Stock for
United States federal income tax purposes; or (iii) receipt of Redemption
Securities in redemption of the Series A Liberty Media Group Common Stock or
the Redeemable Capital Stock to be redeemed in the Redemption Event would 
result in the recognition of gain or loss by the holders of such Redeemable 
Capital Stock, as the case may be.

         (h)  Simultaneous Adjustments.  In the event that this paragraph 7
requires adjustments to the conversion Rate under more than one of paragraph
7(c)(iv), (d) or (e), and the record dates of the distributions giving rise to
such adjustments shall occur on the same date, then such adjustments shall be
made by applying, first, the provisions of paragraph 7(c), second, the
provisions of paragraph 7(e) and, third, the provisions of paragraph 7(d).





                                     - 26 -
<PAGE>   223
         (i)  When Adjustment May be Deferred.  In any case in which this
paragraph 7 shall require that an adjustment shall become effective immediately
after a record date for an event, the Company may defer until the occurrence of
such event (x) issuing to the holder of any shares of Series H Preferred Stock
converted after such record date and before the occurrence of such event the
additional shares of Series A Liberty Media Group Common Stock issuable upon
such Series A Liberty Media Group Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder cash or
its check in lieu of any fractional interest to which he is entitled pursuant
to paragraph 7(o); provided, however, that the Company 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 Liberty Media Common Stock
and such cash, upon the occurrence of the event requiring such adjustment.

         (j)  De Minimis Adjustment; When Adjustment is Not Required.  No
adjustments in the Conversion Rate need be made unless the adjustment would
require an increase or decrease of at least one percent (1%) in the Conversion
Rate.  Any adjustment which is not made shall be carried forward and taken into
account in any subsequent adjustment.

         All calculations under this paragraph 7 shall be made to the nearest
cent or to the nearest 1/1000th of a share, as the case may be.

         No adjustment need be made for rights to purchase shares of Series A
Liberty Media Group Common Stock or for sales of shares of Series A Liberty
Media Group Common Stock which in either case are made pursuant to a Company
plan providing for reinvestment of dividends or interest or pursuant to a bona
fide employee stock option or stock purchase plan of the Company.  No
adjustment need be made for a change in the par value of the Series A Liberty
Media Group Common Stock.

         No adjustment need be made under this paragraph 7 for a transaction
referred to in paragraph 7(c), 7(d), 7(e), or 7(g) if holders of the Series H
Preferred stock are to participate in the transaction on a basis and with the
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
Liberty Media Group Common Stock participate in the transaction; provided that
the basis on which the holders of shares of Series H Preferred Stock are to
participate in the transaction shall not be deemed to be fair if it would
require the holder to convert his shares of Series H Preferred Stock, in order
to participate, at any time prior to the expiration of the conversion period
specified for the share of Series H Preferred Stock pursuant to paragraph 7(a)
of this Certificate of Designations.  The immediately preceding sentence shall
apply to any transaction referred to in paragraph 7(c), 7(d), 7(e) or 7(g) only
if, in good faith determination of the Board of Directors: (i) participation in
such transaction by the holders of the Series H Preferred stock would not
result in the recognition of gain or loss by such holders of United States
federal income tax purposes, (ii) an adjustment made in the Conversion Rate of
the Series H Preferred Stock in lieu of participating in such transaction,
pursuant to this paragraph 7, would result in the recognition of gain or loss
by holders of Series H Preferred Stock for United States federal





                                     - 27 -
<PAGE>   224
income tax purposes; or (iii) participation in such transaction by the holders
of the Series A Liberty Media Group Common Stock would result in the
recognition of gain or loss by such holders for United States federal income
tax purposes.

         To the extent the shares of Series H Preferred stock become
convertible into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.

         (k)  Company Determination Final.  Any determination required to be
made pursuant to paragraph 7(c), 7(d), 7(e), 7(f), 7(g), 7(g), 7(j) or 7(o)
shall be made by the Board of Directors (whether or not reference to the Board
of directors is expressly made in any such paragraph) and any determination so
made in good faith shall be conclusive and binding, absent manifest error, on
the holders of shares of Series H Preferred stock.  In making any determination
as to the expected tax treatment of any action, transaction or event referred
to herein, including, without limitation, the determinations provided for in
the last paragraph of Paragraph 7(g) and the last sentence of the fourth
paragraph of paragraph 7(j), the Board of Directors shall be entitled to rely
conclusively on (i) an opinion of counsel rendered by a law firm acceptable to
the Board of Directors, acting in good faith, or (ii) a private letter ruling
from the Internal Revenue Service, to such effect, which opinion of counsel or
private letter ruling may be based upon such assumptions, and be subject to
such qualifications, conditions and limitations, as the Board of Directors
shall in good faith determine to be appropriate under the circumstances.  Any
such determination by the Board of Directors shall be based on the expected
United States federal income tax consequences applicable to the transaction, in
question, without regard to special tax rules such as those applicable to
dealers in securities, foreign persons, mutual funds, insurance companies,
tax-exempt entities and holders ho do not hold the securities or other property
in question as capital assets, or the personal circumstances of any particular
stockholder.

         (l)  Notice of Adjustment.  Whenever the provisions of this paragraph
7 require an adjustment of the Conversion rate, the Company shall promptly
compute such adjustment and (i) file with the transfer agent for the Series H
Preferred Stock (or with the books of the Company if there is no transfer
agent) an Officers' Certificate setting forth a description of the event
requiring the adjustment, the new Conversion Rate (including a reasonable
detailed calculation thereof), and the kind and amount of capital stock or
other securities or cash or other assets into which the Series H Preferred
Stock shall be convertible after such event, and (ii) cause a notice containing
a summary of the information set forth in said certificate to be given to the
holders of Series H Preferred Stock.  Where appropriate, such notice may be
given  in advance and included as a part of the notice required to be given
under the provisions of paragraph 7(m).

         (m)  Advance Notice of Certain Transactions.  If the Company:

              (i)  takes any action which would require an adjustment in the 
          Conversion Rate;





                                    - 28 -
<PAGE>   225
                 (ii)  is a party to a consolidation, merger or binding share
         exchange, or transfers all or substantially all of its assets to
         another Person, and any stockholders of the Company must approve the
         transaction; or

                 (iii) voluntarily or involuntarily dissolves, liquidates or 
         winds up.

then, in any such event, the Company shall give the holders of the Series H
Preferred Stock, at least twenty (20) days prior to any record date or other
date set for definitive action if there shall be no record date, a notice
stating the record date for and the anticipated effective date of such action
or event and, if the event is a dividend or distribution or issuance by
reclassification of Redeemable Capital Stock, whether the Company has
determined to adjust the Conversion Rate pursuant to paragraph 7(c), or 7(e),
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 Series A
Liberty Media Group Common Stock.  Without limiting the obligation of the
Company to provide notice of corporate actions hereunder, the failure to mail
the notice or any defect in it shall not affect the legality or validity or any
corporate action or the vote thereon.

         (n)  Reservation of Series A Liberty Media Group Common Stock Issuable
Upon Conversion.  The Company shall at all times on and after the Issue Date
reserve and keep available out of its authorized but unissued shares of Series
A Liberty Media Group Common Stock, solely for the purpose of effecting the
conversion of the shares of Series H Preferred Stock, such number of its shares
of Series A Liberty Media Group Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series H
Preferred Stock; provided that nothing contained herein shall be construed to
preclude the Company from satisfying its obligations in respect of the
conversion of the outstanding shares of Series H Preferred Stock by delivery of
shares of Series A Liberty Media Group Common Stock which are held in the
treasury of the Company.  The Company shall take all such corporate and other
actions as from time to time may be necessary to insure that all shares of
Series A Liberty Media Group Common Stock issuable upon conversion of shares of
Series H Preferred Stock at the Conversion Rate in effect from time to time
will, when issued, be duly and validly authorized and issued, fully paid and
nonassessable, and free from all preemptive or similar rights.  in order that
the Company may issue shares of Series A Liberty Media Group Common Stock upon
conversion of the Series H Preferred Stock, the Company will in good faith and
as expeditiously as possible endeavor to comply with all applicable Federal 
and state securities laws and will in good faith and as expeditiously as 
possible endeavor to list such shares to be issued upon conversion on such 
national securities exchange or national securities association, if any, on 
which the Series A Liberty Media Group Common Stock is then listed.

         (o)  Fractional Shares.  No fractional shares of Series A Liberty
Media Group Common Stock or scrip shall be issued upon conversion of the Series
H Preferred Stock.  Whether or not fractional shares would otherwise be
required to be issued to a holder of Series H Preferred Stock upon such
conversion shall be determined on the basis of the total number of shares of
Series H Preferred Stock the holder is at the time converting into Series A
Liberty Media Group Common Stock and the total number of shares of Series A
Liberty Media Group





                                     - 29 -
<PAGE>   226
Common Stock issuable upon such conversion.  In lieu of the issuance of
fractional shares of Series A Liberty Media Group Common Stock, the Company
shall pay instead an amount in cash or by its check equal to the same fraction
of the Closing Price of a full share of Series A Liberty Media Group Common 
Stock on the last full trading day prior to the Conversion Date.

         (p)  Impairment.  The Company will not, by amendment of this
Certificate of Designations or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, other than as expressly permitted by this Certificate of
Designations or approved by the requisite vote or written consent of the
holders of Series H Preferred Stock taken or given in accordance with this
Certificate, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
paragraph 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the holders of Series
H Preferred Stock against impairment.

         8.      Voting.

         (a)  Voting Rights.  The holders of Series H Preferred Stock shall
have no voting rights whatsoever, except as required by law and except for the
voting rights described in this paragraph 8; provided, however, that the number
of authorized shares of Series H Preferred Stock may be increased or decreased
(but not below the number of shares of Series H Preferred Stock then
outstanding) by the affirmative vote of  the holders of at least 66 2/3% of the
total voting power of the then outstanding Voting Securities (as defined in
Section A of Article VIII of the Restated Certificate of Incorporation of the
Company (the "Restated Certificate")), voting together as a single class as
provided in Article IX of the Restated Certificate.  Without limiting the
generality of the foregoing, no vote or consent of the holders of Series H
Preferred Stock shall be required for (a) the creation of any indebtedness of
any kind of the Company, (b) the creation or designation of any class or series
of Senior Stock, Parity Stock or Junior Stock, or (c) any amendment to the
Restated Certificate that would increase the number of authorized shares of
Preferred Stock or the number of authorized shares of Series H Preferred Stock
or that would decrease the number of authorized shares of Preferred Stock or
the number of authorized shares of Series H Preferred stock (but not below the
number of shares of Preferred Stock or Series H Preferred Stock, as the case
may be, then outstanding).

         (b)  Election of Directors.  The holders of the Series H Preferred
Stock shall have the right to vote at any annual or special meeting of
stockholders for the purpose of electing director.  Each shares of Series H
Preferred Stock shall have one vote for such purpose, and shall vote as a
single class with all other classes or series of capital stock of the Company
that are entitled to vote in any general election of directors, unless the
instrument creating or evidencing such class or series of capital stock
otherwise expressly provides.

         9.  No Preemptive Rights.  The holders of shares of Series H Preferred
Stock shall have no preemptive rights, including preemptive rights with respect
to any shares of capital





                                     - 30 -
<PAGE>   227
stock or other securities of the Company convertible into or carrying rights or
options to purchase any such shares.

         10.  Waiver.  Any provision of this Certificate of Designations which,
for the benefit of the holders of Series H Preferred Stock, prohibits, limits
or restricts actions by the Company, or imposes obligations on the Company,
including but not limited to provisions relating to the obligation of the
Company to redeem or convert such shares, 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 by the affirmative vote
or with the consent of the holders of at least a majority of the number of
shares of Series H Preferred Stock then outstanding (or such greater percentage
thereof as may be required by applicable law or any applicable rules of any
national securities exchange or national interdealer quotation system), either
in writing or by vote at an annual meeting or a special meeting called for such
purpose at which the holders of Series H Preferred Stock shall vote as a
separate class.

         11.  Method of Giving Notices.  Any notice required or permitted by
the provisions of this Certificate of Designations to be given to the holders
of shares of Series H Preferred Stock shall be deemed duly given if deposited
in the United States mail, first class mail, postage prepaid, and addressed to
each holder of record at his address appearing on the books of the Company or
supplied by him in writing to the Company for the purpose of such notice.

         12.  Exclusion of Other Rights.  Except as may otherwise be required
by law and except for the equitable rights and remedies which may otherwise be
available to holders of Series H Preferred Stock, the shares of Series H
Preferred Stock shall not have any designations, preferences, limitations or
relative rights other than those specifically set forth in this Certificate of
Designations.

         13.  Headings of Subdivisions.  The headings of the various
subdivisions of this Certificate of Designations are for convenience of
reference only and shall not affect the interpretation of any of the provisions
of this Certificate of Designations.

         FURTHER RESOLVED, that the appropriate officers of this Company are
hereby authorized to execute and acknowledge a certificate setting forth these
resolutions and to cause such certificate to be filed and recorded in
accordance with the requirements of section 151(g) of the General Corporation
Law of the State of Delaware."

         The undersigned has signed this Certificate of Designations on this 
25th day of January, 1996.



                           /s/ STEPHEN M. BRETT 
                          --------------------------------
                          Name:  Stephen M. Brett
                          Title: Executive Vice President





                                    - 31 -