<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
AT&T CORP.
--------------------------------------------------
(NAME OF ISSUER)
1. Common Stock, par value $1.00 per share ("AT&T Common Stock").
2. Class A Liberty Media Group Common Stock, par value $1.00 per share
("Class A Liberty Media Group Common Stock").
3. Class B Liberty Media Group Common Stock, par value $1.00 per share
("Class B Liberty Media Group Common Stock").
--------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
1. AT&T Common Stock: 001957109
2. Class A Liberty Media Group Common Stock: 001957208
3. Class B Liberty Media Group Common Stock: 001957307
--------------------------------------------------
(CUSIP NUMBER)
Raymond L. Sutton, Jr.
Baker & Hostetler LLP
303 East 17th Avenue, Suite 1100
Denver, Colorado 80203
- -------------------------------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS)
March 9, 1999
--------------------------------------------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Section Section 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. / /
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Section 240.13d-7
for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
Exhibit Index on Page A-1
Page 1 of 12
<PAGE>
<TABLE>
CUSIP Nos.
<S> <C> <C> <C>
AT&T Common Stock: 001957109
Class A Liberty Media Group Common Stock: 001957208
Class B Liberty Media Group Common Stock: 001957307
- --------------------------------------------------------------------------------------------------------------------
1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
Magness Securities, LLC
- --------------------------------------------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) / /
(b) /X/
- --------------------------------------------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------------------------------------------
4) Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) / /
- --------------------------------------------------------------------------------------------------------------------
6) Citizenship or Place of Organization Colorado
- --------------------------------------------------------------------------------------------------------------------
7) Sole Voting Power AT&T Common Stock 4,727,127(1)
Class A Liberty Media Group Common Stock 7,782,180(1)(2)
Class B Liberty Media Group Common Stock 5,408,024(1)(3)
------------------------------------------------------------------------------------------------
Number of Shares 8) Shared Voting Power AT&T Common Stock 0
Class A Liberty Media Group Common Stock 0
Beneficially Class B Liberty Media Group Common Stock 0
------------------------------------------------------------------------------------------------
Owned by Each 9) Sole Dispositive Power AT&T Common Stock 4,727,127(1)
Class A Liberty Media Group Common Stock 7,782,180(1)(2)
Reporting Person Class B Liberty Media Group Common Stock 5,408,024(1)(3)
------------------------------------------------------------------------------------------------
With 10) Shared Dispositive Power AT&T Common Stock 0
Class A Liberty Media Group Common Stock 0
Class B Liberty Media Group Common Stock 0
------------------------------------------------------------------------------------------------
11) Aggregate Amount Beneficially AT&T Common Stock 4,727,127(1)
Owned by Each Reporting Person Class A Liberty Media Group Common Stock 7,782,180(1)(2)
Class B Liberty Media Group Common Stock 5,408,024(1)(3)
- --------------------------------------------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) / /
- --------------------------------------------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
less than 1% of AT&T Common Stock
1.5% of Class A Liberty Media Group Common Stock
9.8% of Class B Liberty Media Group Common Stock
- --------------------------------------------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions) OO
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These numbers are based on the conversion ratios as set forth in
Item 4 below, assuming rounding up of all figures equal to or greater than
0.5 share after conversion.
(2) Class B Liberty Media Group Common Stock is convertible at any
time on a one-for-one basis into Class A Liberty Media Group Common Stock.
SEE Item 5 below. The numbers of shares of Class A Liberty Media Group Common
Stock shown in rows 7 through 11 above assume that the shares of Class B
Liberty Media Group Common Stock shown in rows 7 through 11 above have been
converted into shares of Class A Liberty Media Group Common Stock.
(3) SEE Item 5.
Page 2 of 12
<PAGE>
ITEM 1. SECURITY AND ISSUER
The equity securities to which this Schedule 13D relates are as
follows:
1. Common Stock, par value $1.00 per share ("AT&T Common Stock");
2. Class A Liberty Media Group Common Stock, par value $1.00 per share
("Class A Liberty Media Group Common Stock"); and
3. Class B Liberty Media Group Common Stock, par value $1.00 per share
("Class B Liberty Media Group Common Stock").
The issuer of the AT&T Common Stock, the Class A Liberty Media Group
Common Stock and the Class B Liberty Media Group Common Stock (collectively,
the "Company Securities") is AT&T Corp. (the "Company" or "AT&T") whose
principal executive offices are located at 32 Avenue of the Americas, New
York, New York, 10013-2412.
ITEM 2. IDENTITY AND BACKGROUND
(a) This Schedule 13D is filed by Magness Securities, LLC, a Colorado
limited liability company ("Magness LLC"). The principal business of Magness
LLC is to hold the Company Securities and other securities. Kim Magness and
Gary Magness each hold a 50% membership interest in Magness LLC, and Kim
Magness is the manager of Magness LLC.
(b) The business address of the Magness LLC is c/o Raymond L. Sutton,
Jr., Baker & Hostetler LLP, 303 East 17th Avenue, Suite 1100, Denver,
Colorado 80203.
(c) The filing person has no employment or occupation.
(d) The filing person has not, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) The filing person has not, during the last five years, been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction subjecting the filing person to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws, or finding any violation with
respect to such laws.
(f) Magness LLC is a Colorado limited liability company.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On March 9, 1999, certain of the equity securities of
Tele-Communications, Inc. ("TCI"), beneficially owned by Magness LLC (as more
fully described in Item 5 hereof) were exchanged for equity securities of the
Company as follows:
<TABLE>
<CAPTION>
TCI EQUITY SECURITY CLASS NUMBER EXCHANGED FOR AT&T EQUITY CLASS NUMBER
------------------------- ------ ------------------------------- ------
<S> <C> <C> <C>
Tele-Communications, Inc. Series B TCI 5,539,818 AT&T Common Stock 4,727,127
Group Common Stock, par
Page 3 of 12
<PAGE>
value $1.00 per share ("Series B
TCI Group Common Stock")
Tele-Communications, Inc. Series A 2,374,156 Class A Liberty Media Group Common 2,374,156
Liberty Media Group Common Stock, par Stock
value $1.00 per share ("TCI Series A
Liberty Media Group Common Stock")
Tele-Communications, Inc. Series B 2,379,829 Class B Liberty Media Group Common 2,379,829
Liberty Media Group Common Stock, par Stock
value $1.00 per share ("TCI Series B
Liberty Media Group Common Stock")
Tele-Communications, Inc. Series B TCI 5,823,452 Class B Liberty Media Group Common 3,028,195
Ventures Group Common Stock, par value Stock
$1.00 per share ("TCI Series B Ventures
Group Common Stock")
</TABLE>
ITEM 4. PURPOSE OF TRANSACTION
AT&T MERGER
On March 9, 1999, the Company acquired TCI in a merger (the "AT&T
Merger") pursuant to the Agreement and Plan of Restructuring and Merger,
dated as of June 23, 1998 (the "Merger Agreement"), among TCI, the Company
and Italy Merger Corp., a wholly-owned subsidiary of the Company, in which
Italy Merger Corp. merged with and into TCI, and TCI thereby became a
subsidiary of the Company. As a result of the AT&T Merger, (i) each share of
Tele-Communications, Inc. Series A TCI Group Common Stock was converted into
0.7757 of a share of AT&T Common Stock, (ii) each share of Series B Stock TCI
Group Common Stock was converted into 0.8533 of a share of AT&T Common Stock,
(iii) each share of TCI Series A Liberty Media Group Common Stock was
converted into one share of a newly created class of AT&T common stock
designated as the Class A Liberty Media Group Common Stock, par value $1.00
per share (the "Class A Liberty Media Group Common Stock"), (iv) each share
of TCI Series B Liberty Media Group Common Stock was converted into one share
of a newly created class of AT&T common stock designated as the Class B
Liberty Media Group Common Stock, par value $1.00 per share (the "Class B
Liberty Media Group Common Stock"), (v) each share of Tele-Communications,
Inc. Series A TCI Ventures Group Common Stock was converted into 0.52 of a
share of Class A Liberty Media Group Common Stock, (vi) each share of TCI
Series B Ventures Group Common Stock was converted into 0.52 of a share of
Class B Liberty Media Group Common Stock, (vii) each share of TCI's
Convertible Preferred Stock, Series C-TCI Group was converted into 103.059502
shares of AT&T Common Stock, (viii) each share of TCI's Convertible Preferred
Stock Series C-Liberty Media Group was converted into 56.25 shares of Class A
Liberty Media Group Common Stock, (ix) each share of TCI's Redeemable
Convertible TCI Group Preferred Stock, Series G was converted into 0.923083
shares of AT&T Common Stock and (x) each share of TCI's Redeemable
Convertible Liberty Media Group Preferred Stock, Series H was converted into
0.590625 of a share of Class A Liberty Media Group Common Stock. Following
the AT&T Merger, each share of TCI's Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock ("Class B Preferred Stock") continues to
be outstanding as the Class B Preferred Stock with the same rights and
preferences such stock had prior to the AT&T Merger.
Page 4 of 12
<PAGE>
In general, the holders of shares of Class A Liberty Media Group
Common Stock and the holders of shares of Class B Liberty Media Group Common
Stock will vote together as a single class with the holders of shares of AT&T
Common Stock on all matters presented to such stockholders (including the
election of directors), with the holders being entitled to one-tenth (1/10th)
of a vote for each share of Class A Liberty Media Group Common Stock held, 1
vote per share of Class B Liberty Media Group Common Stock held and 1 vote
per share of AT&T Common Stock held. The holders of the shares of the Liberty
Group Stock are entitled to vote together as a separate class with respect to
the following matters:
(i) any amendment to the Certificate of Incorporation of AT&T (as
amended, the "AT&T Charter") that would change the total
number of authorized shares or par value of the Liberty Group
Stock, or adversely change the rights of the Liberty Group
Stock;
(ii) a Covered Disposition (as defined in the AT&T Charter), which
generally includes a sale or transfer by AT&T of its equity
interest in Liberty Media Corporation or Liberty Media Group
LLC or a grant of a pledge or other security interest in the
equity interest of AT&T in Liberty Media Corporation or
Liberty Media Group LLC; or
(iii) any merger or similar transaction in which the Liberty Group
Stock is converted, reclassified or changed into or otherwise
exchanged for any consideration unless specified requirements
are met that are generally intended to ensure that the rights
of the holders are not materially altered and the composition
of the holders is not changed.
As a result of the AT&T Merger and the conversion of the equity
securities of TCI (except for the Class B Preferred Stock), the filing person
beneficially owns the Company Securities as set forth in Item 5 hereof.
The foregoing descriptions of the AT&T Merger, the Merger Agreement,
and the relationship between the AT&T Common Stock and the Liberty Group
Stock are qualified in their entirety by reference to the Merger Agreement
and the AT&T/TCI Proxy Statement/Prospectus, dated January 8, 1999, regarding
the AT&T Merger, each of which is an exhibit to this Statement and is hereby
incorporated by reference herein.
The Liberty Group Stock is tracking stock which tracks the
performance of the Liberty Media Group (as defined in the AT&T Charter),
which include Liberty Media Corporation ("Liberty"). All of the equity
interests in the Liberty Media Group are currently owned by AT&T; however, a
majority of the members of the Board of Directors (the "Liberty Board") of
Liberty are individuals elected by TCI prior to the AT&T Merger. Liberty has
three classes of directors: one class elected for a term of one year; one
class elected for a term of seven years; and one class elected for a term of
10 years. Each class of directors will have an equal number of members. Such
directors may not be removed other than for "cause," and, in the event of the
death or resignation of a director, the remaining directors of such class
will choose a successor to fill the remaining term of such deceased or
resigning director. Upon the expiration of the term of a class of Liberty
directors, the stockholders of Liberty will be entitled to elect directors to
fill such vacancy. Currently, all of the outstanding capital stock of Liberty
is owned by Liberty Ventures Group LLC, which is an indirect wholly owned
subsidiary of AT&T.
As a result of the structure of the Liberty Board, the second and
third classes of directors will constitute a majority of the Liberty Board
until at least 2006. Under Delaware law, the
Page 5 of 12
<PAGE>
business of a corporation is managed by its board of directors. As a result,
although AT&T owns all of the equity interests in the Liberty Media Group
and, initially, all of the common stock of Liberty, the incumbent directors
of Liberty (and their successors) will be able to control most aspects of the
day-to-day business of Liberty and its subsidiaries following the AT&T Merger.
In the event the incumbent directors (or their designated successors)
cease to constitute a majority of the Liberty Board, or Liberty Media
Management LLC determines that, in its reasonable judgment, the incumbent
Liberty directors (or successors) are likely to cease to constitute a
majority of the Liberty Board, such event will constitute a "Triggering
Event." Liberty Media Management LLC is a limited liability company, the
equity interests of which are currently owned by Dr. John Malone ("Malone").
Upon the occurrence of a Triggering Event, subject to the terms and
conditions of a contribution agreement entered into in connection with the
AT&T among Liberty, Liberty Media Group LLC, Liberty Media Management LLC and
Liberty Ventures Group LLC, all of the assets of Liberty and the Covered
Entities (as defined in the AT&T Charter) will be contributed to Liberty
Media Group LLC, substantially all of the equity interests of which are owned
by AT&T, unless the Triggering Event is waived by Liberty Media Management
LLC. However, Liberty Media Management LLC will own the remaining equity
interests in Liberty Media Group LLC and will be the sole manager of Liberty
Media Group LLC.
AGREEMENTS REGARDING COMPANY SECURITIES
In connection with the AT&T Merger, the filing person, TCI and other
parties amended certain agreements such parties entered into in 1998, which
agreements governed the voting and disposition of their shares of equity
securities of TCI. The agreements were originally executed in February 1998.
The first such agreement (the "Malone Call Agreement") was entered
into among TCI, Malone and Malone's wife (together with Malone, the
"Malones"), under which the Malones granted to TCI the right to acquire the
Malones' high-voting shares, then consisting of an aggregate of approximately
60 million shares of Series B TCI Group Common Stock, TCI Series B Liberty
Media Group Common Stock and TCI Series B Ventures Group Common Stock
(collectively, the "TCI Series B Shares"), upon Malone's death or upon a
contemplated sale of the TCI Series B Shares (other than a minimal amount) to
third persons. In either such event, TCI had the right to acquire the shares
at a maximum price equal to the then relevant market price of shares of
"low-voting" Series A TCI Group Common Stock, TCI Series A Liberty Media
Group Common Stock and TCI Series A Ventures Group Common Stock (the "TCI
Series A Stock") plus a ten percent premium in the case of the death of
Malone or, in the case of a sale of such shares, at the lesser of the price
offered for the shares or the market price of the TCI Series A Stock plus a
ten percent premium. The Malones also agreed that if TCI were ever to be sold
to another entity, then the maximum premium that the Malones would receive on
their TCI Series B Shares would be no greater than a ten percent premium over
the price paid for the relevant shares of TCI Series A Stock. TCI paid
approximately $150 million to the Malones for agreeing to the terms of the
Malone Call Agreement.
The second agreement was also entered into in February 1998. In that
month, the Estate of Betsy Magness Estate and the Bob Magness Estate, Kim
Magness, Gary Magness and certain others (collectively, the "Magness Group")
entered into a call agreement with TCI (on substantially the same terms as
the Malone Call Agreement, including a call on the shares owned by the
Magness Group upon Malone's death (the "Magness Call Agreement")), on the
Magness Group's aggregate of approximately 49 million TCI Series B Shares.
The Magness Group was
Page 6 of 12
<PAGE>
paid $123,579,980 by TCI for entering into the Magness Call Agreement.
The third agreement was entered into at the same time. In February
1998, the Magness Group entered into a Stockholders' Agreement (the
"Stockholders' Agreement") with the Malones and TCI under which (i) the
Magness Group and the Malones agree to consult with each other in connection
with matters to be brought to the vote of TCI's shareholders, subject to the
proviso that if they cannot mutually agree on how to vote the shares, Malone
would have an irrevocable proxy to vote the TCI Series B Shares owned by the
Magness Group, (ii) the Magness Group could designate a nominee for the Board
and Malone agreed to vote his TCI Series B Shares for such nominee and (iii)
certain "tag-along rights" were created in favor of the Magness Group with
respect to any sale by the Malones of TCI Series B Shares and certain
"drag-along rights" were created in favor of the Malones with respect to the
sale of all or substantially all of the TCI Series B Shares beneficially
owned by Malone or of the business or assets of TCI, pursuant to which the
Magness Group would consent to such sale and, if the sale is of the TCI
Series B Shares, the Magness Group would either convert their TCI Series B
Shares to the respective TCI Series A Shares of TCI or sell their TCI Series
B Shares pursuant to the terms of such sale.
In March 1999, the Magness Group (now including Magness FT Investment
Company LLC, Magness LLC, The Kim Magness Family Foundation and The Gary
Magness Family Foundation), the Malones, TCI, Liberty Ventures Group LLC and
Liberty Media Corporation entered into letter agreements to amend the terms
of the Malone Call Agreement ("The Malone Letter Agreement"), the Magness
Call Agreement (the "Magness Letter Agreement") and the Stockholders'
Agreement (the "Stockholders' Letter Agreement"). Pursuant to the
Stockholders' Letter Agreement, the parties thereto agreed to assign TCI's
rights and obligations under the Stockholders' Agreement first to Liberty
Ventures Group LLC and then to Liberty Media Corporation ("Liberty"). In
addition, the Stockholders' Letter Agreement amends the Stockholders'
Agreement so that the irrevocable proxy to vote shares held by the Magness
Group now relates to the Class B Liberty Media Group Common Stock of AT&T or
any super voting class of equity securities issued by Liberty held by the
Magness Group. The "tag-along rights" and "drag-along rights" of the
Stockholders' Agreement now relate to the Malones' and the Magness Group's
Class B Liberty Media Group Common Stock or any super voting class of equity
securities issued by Liberty and held by the Malones and the Magness Group.
Finally, the agreement concerning voting of Malone's shares for the Magness
Group Representative (as defined in the Stockholders' Agreement) for the
Board of Directors will relate to the Board of Directors of Liberty if
Liberty has a class of equity securities registered under section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended.
Pursuant to the Magness Letter Agreement and the Malone Letter
Agreement, the parties agreed to assign TCI's rights and obligations under
both agreements to Liberty. The call right under both agreements is now a
right on the part of Liberty to purchase the AT&T Class B Liberty Media Group
Common Stock upon the following events: (i) a proposed sale by the holder of
AT&T Class B Liberty Group Common stock (other than a minimal amount) or (ii)
the death of Malone. This right may be exercised for a maximum price equal to
the then relevant market price of "low-voting" AT&T Class A Liberty Media
Group Common Stock plus a ten percent premium in the case of the death of
Malone or, in the case of a sale of such shares, at the lesser of the price
offered for the shares or the market price of the AT&T Class A Liberty Media
Group Common Stock plus a ten percent premium. Upon a change in control of
AT&T, the maximum premium that the Magness Group or Malones could agree to
receive on their AT&T Class B Liberty Media Group Common Stock would be no
greater than a ten percent premium over the price paid for the AT&T Class A
Liberty Media Group Common Stock.
Page 7 of 12
<PAGE>
The filing person has no present plan or proposal that relates to or
would result in:
(a) the acquisition by any person of additional securities of the
Company, or the disposition of securities of the Company;
(b) an extraordinary corporate transaction, such as a merger,
reorganization, or liquidation, involving the Company or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company
or any of its subsidiaries;
(d) any change in the present board of directors of the Company or
management of the Company, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend
policy of the Company;
(f) any other material change in the Company's business or corporate
structure;
(g) changes in the Company's certificate of incorporation or bylaws
or other actions which may impede the acquisition of control of the Company
by any person;
(h) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Act; or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The aggregate number and percentage of the Company Securities
beneficially owned by the filing person are as follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF CLASS
TITLE OF CLASS BENEFICIAL OWNERSHIP POWER(1)
-------------- -------------------- --------
<S> <C> <C>
AT&T Common Stock 4,727,127(2)(3) less than 1%
Class A Liberty Media Group Common Stock 7,782,180(2)(3) 1.5%
Class B Liberty Media Group Common Stock 5,408,024(2)(3) 9.8%
</TABLE>
(1) Based on 2,970,483,565 shares of AT&T Common Stock, 536,024,016 shares
of Class A Liberty Media Group Common Stock, and 55,072,794 shares of
Class B Liberty Media Group Common Stock
Page 8 of 12
<PAGE>
outstanding on March 9, 1999, in each case after elimination of shares
then held by the Company and its majority owned subsidiaries. The
Company provided these outstanding share numbers. Such outstanding
share numbers represent the pro forma number of shares to be
outstanding assuming issuance of all shares issuable in the AT&T
Merger.
(2) Class B Liberty Media Group Common Stock is convertible at any time on
a one-for-one basis into Class A Liberty Media Group Common Stock. The
numbers of shares of Class A Liberty Media Group Common Stock shown in
this Item 5 assume that the shares of Class B Liberty Media Group
Common Stock have been fully converted into shares of Class A Liberty
Media Group Common Stock.
Each share of AT&T Common Stock and Class B Liberty Media Group Common
Stock is entitled to 1 vote per share and each share of Class A Liberty
Media Group Common Stock is entitled to one-tenth of one vote per
share. Holders of AT&T Common Stock vote with Class A Liberty Media
Group Common Stock and Class B Liberty Media Group Common Stock, and
with and certain classes/series of the Company preferred stock, if any,
on the election of directors. Accordingly, when these series and
classes are aggregated, Magness LLC may be deemed to currently
beneficially own voting equity securities representing approximately
(i) less than 1% of the voting power with respect to a general election
of directors of the Company and (ii) 5.7% of the voting power of the
Liberty Group Stock when voting as a separate class. SEE Item 4 above.
(3) These numbers are based on the conversion ratios as set forth in
Item 4 above, assuming rounding up of all figures equal to or
greater than 0.5 share after conversion.
(b) The following indicates for the filing person the number of shares
of Company Securities as to which there is sole or shared power to
vote or dispose of the shares:
<TABLE>
<CAPTION>
Sole Voting Shared Voting
Class of Security Power(1) Power
----------------- -------- -----
<S> <C> <C>
AT&T Common Stock 4,727,127 0
Class A Liberty Media Group Common Stock 7,782,180 0
Class B Liberty Media Group Common Stock 5,408,024 0
<CAPTION>
Sole Shared
Dispositive Dispositive
Class of Security Power(1) Power
----------------- -------- -----
<S> <C> <C>
AT&T Common Stock 4,727,127 0
Class A Liberty Media Group Common Stock 7,782,180 0
Class B Liberty Media Group Common Stock 5,408,024 0
</TABLE>
(1) These numbers are based on the conversion ratios as
set forth in Item 4 above, assuming rounding up of
all figures equal to or greater than 0.5 share after
conversion.
(c) The transactions described in Item 4 are the only transactions
effected during the last sixty days by the person named in Item
5(a) above.
(d) No person is known by the filing person to have the right to
receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the Company Securities identified
in this Item 5.
(e) Not Applicable
Page 9 of 12
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Kim Magness, as the manager of Magness LLC, has sole power to vote
and shared power to dispose of the securities directly held by Magness LLC.
Pursuant to an oral agreement between Kim Magness and Gary Magness, Kim
Magness may dispose of Magness LLC's securities provided that Gary Magness
has the right to veto any proposed disposition of a material amount of the
securities directly held by Magness LLC. Therefore, Kim Magness possesses the
sole power to vote the 4,727,127 shares of AT&T Common Stock, 2,374,156
shares of Class A Liberty Media Group Common Stock, and 5,408,024 shares of
Class B Liberty Media Group Common Stock held directly by Magness LLC. Kim
Magness, together with Gary Magness, possess shared power to direct the
disposition of the 4,727,127 shares of AT&T Common Stock, 2,374,156 shares of
Class A Liberty Media Group Common Stock, and 5,408,024 shares of Class B
Liberty Media Group Common Stock held directly by Magness LLC.
TCI, the Malones, the Magness Group, Liberty Ventures Group LLC and
Liberty Media Corporation are parties to the Stockholders' Letter Agreement;
TCI, the Magness Group, Liberty Ventures Group LLC and Liberty Media
Corporation are parties to the Magness Letter Agreement; TCI, the Malones and
the Magness Group are parties to the Stockholders' Agreement; and, TCI and
the Magness Group are parties to the Magness Call Agreement, all as described
in Item 4 above.
The Stockholders' Agreement, the Magness Call Agreement, the
Stockholders' Letter Agreement and the Magness Letter Agreement are attached
to this Statement as Exhibits 99.1, 99.2, 99.3 and 99.4, respectively, and
are incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
99.1. Stockholders' Agreement dated as of February 9, 1998, among
TCI, the Malones and the Magness Group (the "Stockholders'
Agreement") (incorporated by reference to Exhibit 99.1 to
Magness LLC's Schedule 13D in respect to TCI with a statement
date of October 8, 1998)
99.2. Call Agreement dated as of February 9, 1998, between TCI and
the Magness Group (the "Magness Call Agreement") (incorporated
by reference to Exhibit 99.2 to Magness LLC's Schedule 13D in
respect to TCI with a statement date of October 8, 1998)
99.3. Letter Agreement to Amend the Stockholders' Agreement dated as
of March 5, 1999, among TCI, the Malones, the Magness Group,
Liberty Ventures Group LLC and Liberty Media Corporation
99.4. Letter Agreement to Amend the Magness Call Agreement
dated as of March 5, 1999 among TCI, the Magness Group,
Liberty Ventures Group LLC and Liberty Media Corporation
99.5. Agreement and Plan of Restructuring and Merger dated as of
June 23, 1998 among the Company, Italy Merger Corp. and TCI
incorporated by reference to Appendix A to the AT&T/TCI Proxy
Statement/Prospectus that forms a part of the Registration
Statement on From S-4 of AT&T (File No. 333-70279), filed
January 8, 1999 (the
Page 10 of 12
<PAGE>
"AT&T Registration Statement")
99.6 AT&T/TCI Proxy Statement/Prospectus, dated January 8, 1999
(incorporated by reference to the AT&T Registration Statement)
</TABLE>
Page 11 of 12
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete
and correct.
Dated: April 7, 1999
MAGNESS SECURITIES, LLC
/s/ Kim Magness
- ---------------------------------------
By: Kim Magness, Manager
Page 12 of 12
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<S> <C>
99.1. Stockholders' Agreement dated as of February 9, 1998, among
TCI, the Malones and the Magness Group (the "Stockholders'
Agreement") (incorporated by reference to Exhibit 99.1 to
Magness LLC's Schedule 13D in respect to TCI with a statement
date of October 8, 1998)
99.2. Call Agreement dated as of February 9, 1998, between TCI and
the Magness Group (the "Magness Call Agreement") (incorporated
by reference to Exhibit 99.2 to Magness LLC's Schedule 13D in
respect to TCI with a statement date of October 8, 1998)
99.3. Letter Agreement to Amend the Stockholders' Agreement dated as
of March 5, 1999, among TCI, the Malones, the Magness Group,
Liberty Ventures Group LLC and Liberty Media Corporation
99.4. Letter Agreement to Amend the Magness Call Agreement dated
as of March 5, 1999 among TCI, the Magness Group, Liberty
Ventures Group LLC and Liberty Media Corporation
99.5. Agreement and Plan of Restructuring and Merger dated as of
June 23, 1998 among the Company, Italy Merger Corp. and TCI
incorporated by reference to Appendix A to the AT&T/TCI Proxy
Statement/Prospectus that forms a part of the Registration
Statement on From S-4 of AT&T (File No. 333-70279), filed
January 8, 1999 (the "AT&T Registration Statement")
99.6 AT&T/TCI Proxy Statement/Prospectus, dated January 8, 1999
(incorporated by reference to the AT&T Registration Statement)
</TABLE>
Page A-1
<PAGE>
EXHIBIT 99.3.
<PAGE>
EXHIBIT 99.3.
Tele-Communications, Inc. Liberty Media Corporation
5619 DTC Parkway 8101 East Prentice Avenue, Suite 500
Englewood, Colorado 80111 Englewood, Colorado 80111
March 5, 1999
Dr. John C. Malone
Ms. Leslie Malone
Mr. Gary Magness
Mr. Kim Magness
Magness Securities LLC
Magness FT Investment Company, LLC
The Kim Magness Family Foundation
The Gary Magness Family Foundation
c/o Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Ladies and Gentlemen:
Reference is made to the Stockholders' Agreement dated as of
February 9, 1998, among TCI, John C. Malone, Leslie Malone, Gary Magness,
both in any Representative Capacity and individually, Kim Magness, both in
any Representative Capacity and individually, the Estate of Bob Magness and
the Estate of Betsy Magness (the "Stockholders' Agreement"). As you know,
after the original execution of the Stockholders' Agreement, Magness
Securities LLC, Magness FT Investment Company, LLC, the Kim Magness Family
Foundation and The Gary Magness Family Foundation were each added as a party
and a member of the "Magness Group." Capitalized terms used but not expressly
defined in this letter have the meanings given to them in the Stockholders'
Agreement. Section references in this letter are to Sections of the
Stockholders' Agreement.
The purpose of this letter is to confirm and clarify the following:
1. Each of you consents to the assignment by TCI to Liberty
Ventures Group LLC, a Delaware limited liability company ("LVG"), and the
subsequent assignment by LVG to Liberty Media Corporation, a Delaware
corporation ("LMC") of all of TCI's rights, interests and obligations under
the Stockholders' Agreement, and agrees that upon such assignments TCI shall
have no further rights or obligations under the Stockholders' Agreement.
2. TCI agrees with each of you that if, for any reason, the
Agreement and Plan of Restructuring and Merger, dated as of June 23, 1998,
among TCI, AT&T Corp., a New York corporation ("AT&T"), and Italy Merger
Corp., a Delaware corporation and a wholly owned subsidiary of AT&T
("MergerSub"), terminates without consummation of the merger of MergerSub
into TCI contemplated thereby (the "Merger"), the assignments described in
paragraph 1 will be rescinded.
3. From and after the Merger (and after giving effect to the
assignments provided for above), the Stockholders' Agreement will continue in
effect in accordance with its terms and the following:
<PAGE>
(a) References to "TCI" will be references to LMC and any successor
(by merger, consolidation, sale, transfer, exchange, or otherwise) to all or
substantially all of its business and assets, other than a Spin-Off Company
(LMC and any such successor being referred to herein as "Liberty").
(b) The definition of the term "Director Votes" is deleted from
Exhibit A to the Stockholders' Agreement.
(c) The term "Company" will mean (i) Liberty if and while common
stock of which it is the issuer is registered under Section 12(b) or 12(g) of
the Securities Exchange Act of 1934, as amended, or (ii) any "Spin-Off
Company" if and while common stock of which it is the issuer is registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as
amended, and a majority of Liberty's directors then in office constitute a
majority of the Board of Directors of such Spin-off Company.
(d) The term "High Vote Share" will mean:
(i) the Class B Liberty Media Group Common Stock, par
value $1.00 per share, of AT&T and any capital stock
into which such stock may be changed (whether as a
result of a recapitalization, reorganization, merger,
consolidation, share exchange, stock dividend or
other transaction or event) (the "LMCB-Common"), and
(ii) common stock of any class or series issued by Liberty
or any Spin-Off Company that entitles the holders to
greater voting power per share than the voting power
per share to which holders of some other class or
series of common stock of such issuer are entitled
with respect to significant matters (such as the
election of directors) as to which the holders of
outstanding shares of both classes or series vote
together (with each other or with each other and one
or more other classes or series of common stock of
that issuer).
(e) the term "Low Vote Stock" will mean:
(i) the Class A Liberty Media Group Common Stock, par
value $1 .00 per dime, of AT&T and any capital stork
into which such stock may be changed (whether as a
result of a recapitalization, reorganization, merger,
consolidation, share exchange, stock dividend or
other transaction or event) (the "LMCA-Common"), and
(ii) common stock of any class or series issued by Liberty
or any Spin-Off Company that entities the holders to
lesser voting power per share than the voting power
per share to which holders of some other class or
series of common stock of such issuer are entitled
with respect to significant matters (such as the
election of directors) as to which the holders of
outstanding shares of both classes or series vote
together (with each other or with each other and one
or more other classes or series of common stock of
that issuer).
(c) The term "Spin-Off Company" shall mean any corporation or
limited liability company which initially is a subsidiary of Liberty, which
succeeds to substantially all of the businesses and assets of Liberty and
which is then "spun-off" to either Liberty shareholders (if Liberty then has
common stock which is registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended) or the holders of the
LMCA-Common and the LMCB-Common.
-2-
<PAGE>
If the foregoing accurately expresses our understanding, please
sign and return the enclosed counterpart of this letter.
Sincerely,
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
-------------------------------------
Stephen M. Brett
Executive Vice President,
Secretary and General Counsel
LIBERTY VENTURES GROUP LLC
By: /s/ Stephen M. Brett
-------------------------------------
Stephen M. Brett
Vice President
LIBERTY MEDIA CORPORATION
By: /s/ Stephen M. Brett
-------------------------------------
Stephen M. Brett
Vice President
-3-
<PAGE>
Confirmed:
ESTATE OF BETSY MAGNESS
/s/ John C. Malone By: /s/ Kim Magness
- ---------------------------------- ----------------------------------
JOHN C. MALONE Kim Magness, Personal Representative
ESTATE OF BOB MAGNESS
/s/ Leslie Malone By: /s/ Kim Magness
- ---------------------------------- ----------------------------------
LESLIE MALONE Kim Magness, Personal Representative
By: /s/ Gary Magness
-------------------------------------
Gary Magness, Personal Representative
MAGNESS SECURITIES LLC
/s/ Kim Magness By: /s/ Kim Magness
- ---------------------------------- ----------------------------------
KIM MAGNESS, individually and as Kim Magness, Manager
Trustee of the Magness Family
Irrevocable Trusts and the
Magness Issue GST Trusts MAGNESS FT INVESTMENT COMPANY, LLC
/s/ Gary Magness By: /s/ Kim Magness
- ---------------------------------- ----------------------------------
GARY MAGNESS, individually and as Kim Magness, Manager
Trustee of the Magness Family
Irrevocable Trusts and the
Magness Issue GST Trusts THE KIM MAGNESS FAMILY FOUNDATION
By: /s/ Kim Magness
-------------------------------------
Kim Magness, President
THE GARY MAGNESS FAMILY FOUNDATION
By: /s/ Gary Magness
-------------------------------------
Gary Magness, President
-4-
<PAGE>
EXHIBIT 99.4.
<PAGE>
EXHIBIT 99.4.
TELE-COMMUNICATIONS, INC. LIBERTY MEDIA CORPORATION
5619 DTC Parkway 8101 East Prentice Avenue, Suite 500
Englewood, Colorado 80111 Englewood, Colorado 90111
MARCH 5, 1999
Mr. Gary Magness
Mr. Kim Magness
Magness Securities LLC
Magness FT Investment Company, LLC
The Kim Magness Family Foundation
The Gary Magness Family Foundation
c/o Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Gentlemen:
Reference is made to the Call Agreement, dated as of February 9,
1998 (the "Magness Call Agreement"), among Tele-Communications Inc., a
Delaware corporation ("TCI"), and Gary Magness, both in any Representative
Capacity and individually, Kim Magness, both in any Representative Capacity
and individually, the Estate of Bob Magness, and the Estate of Betsy Magness.
As you know, after the original execution of the Magness Call Agreement,
Magness Securities LLC, Magness FT Investment Company, LLC, The Kim Magness
Family Foundation and The Gary Magness Family Foundation were added as
parties to the Call Agreement and members of the "Magness Group". Capitalized
terms used but not expressly defined in this letter have the meanings given
to them in the Magness Call Agreement. Section references in this letter are
to Sections of the Magness Call Agreement.
The purpose of this letter is to confirm and clarify the following:
1. Each member of the Magness Group consents to the assignment by
TCI to Liberty Ventures Group LLC, a Delaware limited liability company
("LVG"), and the subsequent assignment by LVG to Liberty Media Corporation, a
Delaware corporation ("LMC"), of all of TCI's rights, interests and
obligations under the Magness Call Agreement and agrees that upon such
assignments TCI shall have no further rights or obligations under the Magness
Call Agreement. Each member of the Magness Group also agrees that if a
Triggering Event (as defined below) occurs in the future and is not waived,
LMC may assign all of its rights, interests and obligations under the Magness
Call Agreement to Liberty Media Group LLC and, in the event of such
assignment, references to LMC herein shall thereafter refer to Liberty Media
Group LLC. "Triggering Event" has the meaning ascribed to such term in the
Contribution Agreement, being entered into on March 9, 1999, among LMC,
Liberty Media Management LLC, Liberty Media Group LLC and Liberty Ventures
Group LLC.
2. TCI and each member of the Magness Group agree that if, for any
reason, the
<PAGE>
Agreement and Plan of Restructuring and Merger, dated as of June 23, 1998, as
amended, among TCI, AT&T Corp., a New York corporation ("AT&T"), and Italy
Merger Corp., a Delaware corporation and a wholly owned subsidiary of AT&T
("MergerSub"), terminates without consummation of the merger of MergerSub
into TCI contemplated thereby (the "Merger"), the assignments described in
paragraph 1 shall be rescinded.
3. Each member of the Magness Group confirms and agrees that TCI
has exercised its right under Section 7.10 of the Magness Call Agreement to
require that, from and after the Merger (and after giving effect to the
assignments provided for above), the Magness Call Agreement continue in
effect in accordance with its terms and the following:
(a) References to the "Company" will be references to AT&T and any
successor (by merger, consolidation, sale, transfer, exchange, or otherwise)
to all or substantially all of its business and assets, except as indicated
below:
(i) in order to effectively give LMC the rights and obligations
it is intended to have after the assignments referred to in paragraph I above,
(x) the rights, interests, covenants and obligations of
the "Company" under the first sentence of Section 2.1
and under Sections 2.2 through 7.17, inclusive, will
be rights, interests, covenants and obligations of
LMC and any successor (by merger, consolidation,
sale, transfer, exchange, or otherwise) to all or
substantially all of its business and assets (LMC or
such successor being referred to as "Liberty"), and
(y) references to the "Company" in the definition of the
terms "Board of Directors", "Magness Group", "Magness
Group Representative" and "Permitted Pledge" in
Section 1.1 will be references to Liberty;
(ii) references to the Company with respect to covenants of the
Company that have been fully performed by TCI prior to the date hereof,
including, without limitation, in the second sentence of Section 2.1, shall
continue to refer to TCI, and
(iii) references to the Company in the definitions of Magness
Call Agreement and Stockholders Agreement refer to TCI.
(b) The definition of the term "High Vote Stock" shall mean the
Class B Liberty Media Group Common Stock, $1.00 par value per share, issued
by AT&T (or any successor referred to in paragraph 3(a) above), as it exists
immediately after the Merger, and any capital stock into which the Class B
Liberty Media Group Common Stock may thereafter be changed (whether as a
result of a recapitalization, reorganization, merger, consolidation, share
exchange, stock dividend, stock redemption, spinoff, split off or other
transaction or event). The definition of the term "Low Vote Stock" shall mean
the Class A Liberty Media Group Common Stock, $1.00 par value per share,
issued by AT&T (or any successor referred to in paragraph 3(a) above), as it
exists immediately after the Merger, and any capital stock into which the
Class A Liberty Media Group Common Stock may thereafter be changed (whether
as a result of a recapitalization, reorganization, merger, consolidation,
share exchange, stock dividend, stock redemption, spinoff, split off or other
transaction or event).
(c) The term "Sale of the Company" shall mean, a transaction which
results in a Change of Control of the issuer of the High Vote Stock (subject
to the same exclusions as currently pertain in the definition of such term).
2
<PAGE>
(d) In any case where the Holder has the right to elect under
Section 2.2(d) to receive payment of the Gross Purchase Price for any High
Vote Stock included in the Subject Shares in shares of a corresponding series
of Low Vote Stock, and in any case where the Company has the right under
Section 3.1 to elect to pay all or any portion of the Closing Date Amount or
Company Price in shares of Low Vote Stock, such election will not be
effective unless Liberty arranges for AT&T to issue such Low Vote Stock and
to grant to the selling Holder the registration rights with respect to such
shares of Low Vote Stock contemplated by Section 2.2(e). Similarly, the
Company's election under Section 3.1 will not be effective unless Liberty
arranges for AT&T to comply with Section 3.2.
If the foregoing accurately expresses our understanding, please sign
and return the enclosed counterpart of this letter.
Sincerely,
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
-------------------------------------
Stephen M. Brett
Executive Vice President,
Secretary and General Counsel
LIBERTY VENTURES GROUP LLC
By: /s/ Stephen M. Brett
-------------------------------------
Stephen M. Brett
Vice President
LIBERTY MEDIA CORPORATION
By: /s/ Stephen M. Brett
-------------------------------------
Stephen M. Brett
Vice President
3
<PAGE>
Confirmed:
ESTATE OF BETSY MAGNESS
/s/ Kim Magness By: /s/ Kim Magness
- ---------------------------------- ----------------------------------
KIM MAGNESS, individually and as Kim Magness, Personal Representative
Trustee of the Magness Family
Irrevocable Trusts and the
Magness Issue GST Trusts ESTATE OF BOB MAGNESS
/s/ Gary Magness By: /s/ Kim Magness
- ---------------------------------- ----------------------------------
GARY MAGNESS, individually and as Kim Magness, Personal Representative
Trustee of the Magness Family
Irrevocable Trusts and the
Magness Issue GST Trusts By: /s/ Gary Magness
-------------------------------------
Gary Magness, Personal Representative
MAGNESS SECURITIES LLC
By: /s/ Kim Magness
- -------------------------------------
Kim Magness, Manager
MAGNESS FT INVESTMENT COMPANY, LLC
By: /s/ Kim Magness
- -------------------------------------
Kim Magness, Manager
THE KIM MAGNESS FAMILY FOUNDATION
By: /s/ Kim Magness
- -------------------------------------
Kim Magness, President
THE GARY MAGNESS FAMILY FOUNDATION
By: /s/ Gary Magness
- -------------------------------------
Gary Magness, President
4
