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UGC: Lawsuit Is Financially Motivated

UnitedGlobalCom Inc. said it believes a lawsuit by a former
executive is financially motivated and aimed at taking advantage of the company's
skyrocketing share price.

"The bottom line is that we're totally baffled by his
claim," UGC senior vice president of business and legal affairs Ellen Spangler said
of a lawsuit filed this month by former executive Donald Hagans.

"This is an employee whose employment was terminated
over two years ago, and the only reason we think he's asserting a claim at this point is
because the stock in that time period has gone up about 1,000 percent," she added.
"It's completely financially motivated."

Hagans -- who worked for United International Holdings
Inc., as UGC was formerly known, from 1993 through 1997 -- is suing UGC for about $16
million.

The suit -- filed in U.S. District Court in Denver --
accuses UGC of unfairly dismissing him and revoking his rights to options on UGC stock.
UGC president Michael Fries and John Porter, who heads the company's Australian
operations, were also named as defendants in the suit.

In the lawsuit, Hagans alleged that he was terminated three
years into a five-year contract, and that he is entitled to options to purchase "in
excess of" 170,000 shares of UGC stock, as well as an interest in Austar
Entertainment Pty. Ltd., UGC's Australian unit.

In naming Fries and Porter, the suit alleged that the two
executives "participated in a politically motivated, carefully orchestrated scheme to
cause Hagans' termination and to defraud him of the various components of his compensation
package that were promised to him."

The remaining two years of Hagans' contract are valued in
the lawsuit at $1 million, including salary, bonus, entry compensation and other benefits,
according to the suit.

The biggest component of the damages the lawsuit is seeking
is the UGC and Austar equity. The 170,000 options would entitle Hagans to about $10
million worth of UGC stock, the suit said, adding that he also has the right to a $5
million share of Austar, which went public on the Australian Stock Exchange last year.

UIH shares passed the strike price of Hagans' options in
late March 1998, the lawsuit said. Although the suit didn't specify what the strike price
was, the timing would indicate it to be in the $17-per-share range.

Hagans, the suit said, opted to hold on to the options
based on the alleged promise that their life would be extended to two years from 90 days
after he left the company in 1997.

At press time last Thursday, UGC shares traded at $76.25.
The shares were split two-for-one last year.

The lawsuit also said that in 1995, Hagans was told by Mark
Schneider, who is now CEO of UGC's United Pan-Europe Communications N.V. (UPC) unit, that
his compensation "would be substantial, in the millions of dollars."

Spangler, however, said there was no extension of the
options, and Hagans did not have a written employment contract with the company.

R. Daniel Scheid, Hagans' lawyer, declined to comment on
the lawsuit.

Hagans, an American, is living in Australia, and he could
not be reached for comment. After leaving Austar, he worked for a unit of telco Cable
& Wireless Optus Ltd. and for Australian Internet start-up LibertyOne Ltd.