<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
DMX Inc.
(Name of Issuer)
Common Stock, $.01 par value
----------------------------
(Title of Class of Securities)
23323Q104
---------
(CUSIP Number)
Stephen M. Brett, Esq., Executive Vice President and General Counsel,
Tele-Communications, Inc.
Terrace Tower II, 5619 DTC Parkway, Englewood, CO 80111, (303-267-5500)
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 30, 1996
---------------
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check the following box: [ ].
Check the following box if a fee is being paid with this statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) 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 ("Exchange 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 is on Page 11
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Cusip No. 23323Q104
- --------------------------------------------------------------------------------
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of
Above Persons
TELE-COMMUNICATIONS, INC.
84 - 1260157
- --------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds
WC, AF, OO
- --------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of (7) Sole Voting Power 27,100,687 Shares
Shares Bene-
ficially ------------------------------------------------------------
Owned by (8) Shared Voting Power 0 Shares
Each Report-
ing Person ------------------------------------------------------------
With (9) Sole Dispositive Power 27,100,687 Shares
------------------------------------------------------------
(10) Shared Dispositive Power 0 Shares
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
27,100,687 Shares
- --------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
45.5%
- --------------------------------------------------------------------------------
(14) Type of Reporting Person
HC, CO
2
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Cusip No. 23323Q104
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 4)
Statement of
TELE-COMMUNICATIONS, INC.
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
DMX Inc.
(Commission File No. 0-18806)
ITEM 1. Security and Issuer
-------------------
Tele-Communications, Inc., a Delaware corporation ("TCI"), hereby
amends and supplements its Statement on Schedule 13D (the "Statement"), with
respect to the common stock, $.01 par value (the "Common Stock"), of DMX Inc., a
Delaware corporation ("DMX"). DMX's principal executive offices are located at
11400 W. Olympic Blvd., Suite 1100, Los Angeles, California 90064-1507. Unless
otherwise indicated, capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Statement.
TCI is filing this amendment to the Statement as a result of the
execution of a letter to DMX relating to a proposed merger. A description of
the terms of the proposed merger is set forth in "ITEM 3 - Source and Amount of
--------------------
Funds or Other Consideration" below.
- ----------------------------
ITEM 2. Identity and Background
-----------------------
Item 2 of the Statement is hereby amended and supplemented by adding
the following information thereto:
This Amendment No. 4 is being filed by TCI whose principal business
address is 5619 DTC Parkway, Englewood, Colorado 80111.
Schedule 1 attached to this Amendment No. 4 to the Statement contains
the following information concerning each director, executive officer or
controlling person of TCI: (i) name and residence or business address, (ii)
principal occupation or employment; and (iii) the
3
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Cusip No. 23323Q104
name, principal business and address of any corporation or other organization in
which such employment is conducted. Schedule 1 is incorporated herein by
reference and replaces the Schedule previously filed with the Statement.
To the knowledge of TCI, each of the persons named on Schedule 1 (the
"Schedule 1 Persons") is a United States citizen. During the last five years,
neither TCI nor any of the Schedule 1 Persons (to the knowledge of TCI) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). During the last five years, neither TCI nor any of the Schedule
1 Persons (to the knowledge of TCI) has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and, as a result of
such proceeding, is or was subject 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.
ITEM 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
Item 3 of the Statement is hereby amended and supplemented by adding
the following information thereto:
Proposed Merger
- ---------------
On August 30, 1996, TCI executed and delivered to DMX a letter which
sets forth a proposal by which a corporation to be formed by one or more
affiliates of TCI ("MusicCo") will acquire all of the issued and outstanding
shares of the Common Stock of DMX in a transaction structured as a merger of a
wholly owned subsidiary of MusicCo with and into DMX (the "Merger"). TCI
understands that DMX has appointed a special committee of disinterested
directors to evaluate the proposal for the Merger and that the special committee
will retain an investment banking firm to advise it and the Board as to the
proposal. The following discussion sets forth the proposed terms of the Merger
as stated in the letter and is qualified in its entirety by reference to the
copy of the letter attached hereto as Exhibit 7(E).
In the proposed Merger, the outstanding shares of Common Stock of DMX,
including the shares of Common Stock beneficially owned by TCI, will be
converted into shares of Class A common stock of MusicCo representing, in the
aggregate, approximately 19.25% of the total number of shares of Class A and
Class B common stock of MusicCo outstanding immediately after the Merger. The
definitive merger agreement will provide for the cancellation or other
appropriate treatment of outstanding options or other rights to acquire
securities of DMX.
All shares of MusicCo Class B common stock outstanding immediately
after the Merger will be owned by one or more affiliates of TCI. The two
classes of MusicCo common stock will have identical rights, except that each
share of Class B common stock will represent the right to cast ten votes on each
matter submitted to a vote of MusicCo stockholders, compared to one vote per
share of Class A common stock.
4
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Cusip No. 23323Q104
It will be a condition precedent to the Merger that all of TCI's and
its controlled affiliates' subscriber agreements with residential and commercial
DMX subscribers be transferred to MusicCo. TCI also will agree that, subject to
such conditions and limitations as may be agreed between MusicCo and TCI,
MusicCo will be the exclusive vehicle through which TCI and its controlled
affiliates will engage in the business of producing and selling by any means of
distribution audio and video music programming to wholesale and retail
commercial and residential customers.
In the definitive documents for the Merger, TCI will agree that if,
during the one-year period beginning on the date of closing of the Merger, the
market price of MusicCo's Class A common stock has not equaled or exceeded $2.00
per share for any period of at least 20 consecutive trading days, holders of
MusicCo common stock issued in the Merger will have the right (a "Put"),
exercisable during the 30-day period beginning on the first anniversary of the
closing of the Merger, to require TCI to purchase such common stock at a
purchase price of $2.00 per share. That purchase price may be paid, at TCI's
election, in cash or in shares of Tele-Communications, Inc. Series A TCI Group
Common Stock.
If TCI's proposal is accepted by DMX, it is anticipated that TCI will
provide to DMX in the near future a loan of $3.5 million, payable with interest
at 12.5% per annum in 36 equal monthly installments of principal and interest.
Proceeds of that loan may be used by DMX only to purchase tuners for use by
residential and commercial customers of DMX. Payment of the loan will be secured
by a security interest in the equipment acquired with the loan proceeds and by
DMX's commercial subscriber agreements. At the time the loan is originated by
TCI, DMX will grant to TCI and its affiliates rights to distribute DMX's
services on the terms and conditions set forth in the form of an affiliation
agreement to be submitted to DMX.
Consummation of the Merger will be subject, in addition to the matters
specified above, to the expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, the absence of any material adverse change in the financial condition
or results of operations of DMX, effectiveness of a registration statement under
the Securities Act of 1933 pertaining to the issuance of shares of MusicCo in
the Merger and the Puts, the absence of any court order or other legal
requirement that would have the effect of making consummation of the Merger
illegal, the obtaining of any material required consents of third parties and
the accuracy as of the closing date of representations and warranties set forth
in the merger agreement.
The letter states that the letter is intended only to assist the
parties in negotiating the definitive terms of the proposed transactions and is
not intended to constitute or create a legally binding obligation. Prior to the
execution of definitive documents expressly stating the intention of the parties
to be legally bound, the letter states that either party may terminate
negotiations at any time without further obligation or liability.
5
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Cusip No. 23323Q104
Consideration for the Merger
- ----------------------------
TCI intends to use the common stock of MusicCo, certain above-
described contractual rights, cash and/or the Series A TCI Group Common Stock of
TCI as consideration in the Merger. TCI intends to use its working capital to
fund the loan of $3.5 million to DMX and any cash required by the Merger.
ITEM 4. Purpose of Transaction
----------------------
Item 4 of the Statement is hereby amended and supplemented by adding
the following information thereto:
The information under the heading "Item 3- Source and Amount of Funds
or Other Consideration - Proposed Merger" is hereby incorporated by reference.
The purpose of the proposed transactions, including the Merger, will be to
provide interim financial support to DMX and to increase TCI's voting interest
in DMX.
Due to the current financial condition of DMX, management of DMX and
the board of directors of DMX are continually reviewing alternatives and
strategies for improving the financial performance of DMX. The discussions
regarding the proposed Merger are part of this review. No assurance can be given
that the outcome of this review by DMX management will result in the signing of
the letter or result in the closing of the Merger. Until a definitive merger
agreement is signed, no assurance can be given that TCI will not change its
present investment in DMX or participate in an extraordinary corporate
transaction related to DMX.
ITEM 7. Material to be Filed as Exhibits
--------------------------------
E. Letter, dated as of August 30, 1996.
6
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Cusip No. 23323Q104
SIGNATURE
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.
September 12, 1996 TELE-COMMUNICATIONS, INC.
/s/ STEPHEN M. BRETT
--------------------------
Stephen M. Brett
Executive Vice President and
General Counsel
7
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Cusip No. 23323Q104
SCHEDULE 1
----------
Directors, Executive Officers & Controlling Persons
of
Tele-Communications, Inc. ("TCI")
<TABLE>
<CAPTION>
Name Principal Occupation & Principal Business or Organization in
- ---- Business Address Which such Employment Is
---------------------- Conducted
---------
<C> <S> <C>
Bob Magness Chairman of the Board & Director of TCI Cable television &
5619 DTC Parkway telecommunications
Englewood, CO 80111 & programming services
John C. Malone President & Chief Executive Officer & Cable television &
Director of TCI telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Donne F. Fisher Consultant & Director of TCI Cable television &
5619 DTC Parkway telecommunications
Englewood, CO 80111 & programming services
John W. Gallivan Director of TCI; Chairman of the Board Newspaper publishing
of Kearns-Tribune Corporation
400 Tribune Building
Salt Lake City, UT 84111
Tony Lee Coelho Director of TCI; Chairman of the Board & Investment Services
Chief Executive Officer of ETC w/tci, Inc.;
Chairman & Chief Executive Officer of
Coelho Associates, LLC
1325 Avenue of the Americas,
26th Floor
New York, New York 10019
Kim Magness Director of TCI & TCI Communications, Management of personal investments
Inc.; Manages various personal investments;
4000 E. Belleview
Englewood, CO 80111
Robert A. Naify Director of TCI; President & C.E.O. of Motion Picture Industry
Todd-AO Corporation;
172 Golden Gate Avenue
San Francisco, CA 94102
</TABLE>
8
<PAGE>
Cusip No. 23323Q104
<TABLE>
<C> <S> <C>
Jerome H. Kern Director of TCI; Business Consultant; Business Consulting; Law
Special Counsel to Baker & Botts, L.L.P.
5619 DTC Parkway
Englewood, CO 80111
Gary K. Bracken Senior Vice President & Controller Cable television &
of TCI Communications, Inc. telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Stephen M. Brett Executive Vice President, Secretary Cable television &
& General Counsel of TCI telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Brendan R. Executive Vice President & Chief Cable television &
Clouston Operating Officer of TCI telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Barry P. Marshall Executive Vice President of TCI Cable television &
Communications, Inc. telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Larry E. Romrell Executive Vice President of TCI Cable television &
5619 DTC Parkway telecommunications
Englewood, CO 80111 & programming services
Bernard W. Senior Vice President - Finance & Cable television &
Schotters II Treasurer of TCI Communications, Inc. telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Robert N. Thomson Senior Vice President - Government Cable television &
Affairs of TCI Communications, Inc. telecommunications
5619 DTC Parkway & programming services
Englewood, CO 80111
Fred A. Vierra Executive Vice President of TCI Cable television &
5619 DTC Parkway telecommunications
Englewood, CO 80111 & programming services
</TABLE>
9
<PAGE>
Cusip No. 23323Q104
<TABLE>
<C> <S> <C>
Peter R. Barton Executive Vice President of TCI Cable television &
5619 DTC Parkway telecommunications
Englewood, CO 80111 & programming services
</TABLE>
10
<PAGE>
Cusip No. 23323Q104
EXHIBIT INDEX
-------------
- --------------------------------------------------------------------------------
EXHIBIT EXHIBIT PAGE
NUMBER
- --------------------------------------------------------------------------------
7(E) Letter, dated as of August 30, 1996.
- --------------------------------------------------------------------------------
11
<PAGE>
[LOGO OF TCI APPEARS HERE]
[LETTERHEAD OF TCI APPEARS HERE]
August 30, 1996
Board of Directors
DMX Inc.
11400 West Olympic Boulevard VIA TELECOPY
Suite 1100 ------------
Los Angeles, California 90064-1507
Gentlemen:
This letter sets forth a proposal pursuant to which a corporation to
be formed ("MusicCo") by one or more affiliates of Tele-Communications, Inc.
("TCI") will acquire all the issued and outstanding shares of common stock of
DMX Inc. ("DMX") in a transaction structured as a merger (the "Merger") of a
wholly owned subsidiary of MusicCo with and into DMX. We expect that the Merger
will result in the recognition of gain or loss by DMX stockholders for federal
income tax purposes.
Should the proposed terms of the Merger, as described more fully
below, be acceptable to the Board of Directors of DMX, we will proceed to
negotiate and enter into a definitive merger agreement that will include, among
other things, customary representations and warranties, covenants (including
recommendation of the transaction to stockholders by the Board, standstill
provisions and information access and confidentiality covenants) and conditions,
including approval by DMX stockholders. We also expect that DMX will require
that it receive, at the time of execution of the merger agreement, an opinion of
an investment banking firm of national repute to the effect that the Merger is
fair from a financial point of view to DMX stockholders.
It will be a condition precedent to the Merger that all of TCI's and
its controlled affiliates' subscriber agreements with residential and commercial
DMX subscribers be transferred to MusicCo. TCI also will agree that, subject to
such conditions and limitations as may be agreed between MusicCo and TCI,
MusicCo will be the exclusive vehicle through which TCI and its controlled
affiliates will engage in the business of producing and selling by any means of
distribution audio and video music programming to wholesale and retail
commercial and residential customers.
Subject to our further investigation of DMX, its business, assets and
liabilities, we propose that, in the Merger, the outstanding shares of DMX
common stock (which we understand total approximately 59,586,594 shares as of
the date of this letter), including shares held by TCI
<PAGE>
DMX, Inc. Board of Directors
August 30, 1996
Page 2
affiliates, will be converted into shares of Class A common stock of MusicCo
representing, in the aggregate, approximately 19.25% of the total number of
shares of Class A and Class B common stock of MusicCo outstanding immediately
after the Merger. The merger agreement will provide for the cancellation or
other appropriate treatment of outstanding options or other rights to acquire
securities of DMX.
All shares of MusicCo Class B common stock outstanding immediately after
the Merger will be owned by one or more affiliates of TCI. The two classes of
MusicCo common stock will have identical rights, except that each share of Class
B common stock will represent the right to cast ten votes on each matter
submitted to a vote of MusicCo stockholders, compared to one vote per share of
Class A common stock.
TCI also will agree that if, during the one-year period beginning on the
date of closing of the Merger, the market price of MusicCo's Class A common
stock has not equaled or exceeded $2.00 per share for any period of at least 20
consecutive trading days, holders of MusicCo common stock issued in the Merger
will have the right (a "Put"), exercisable during the 30-day period beginning on
the first anniversary of the closing of the Merger, to require TCI to purchase
such common stock at a purchase price of $2.00 per share. That purchase price
may be paid, at TCI's election, in cash or in shares of Tele-Communications,
Inc. Series A TCI Group Common Stock.
As soon as possible after the execution of this letter, TCI will provide
to DMX a loan of $3.5 million, payable with interest at 12.5% per annum in 36
equal monthly installments of principal and interest. Proceeds of that loan may
be used by DMX only to purchase tuners for use by residential and commercial
customers of DMX, and payment of that loan will be secured by a security
interest in the equipment acquired with loan proceeds and DMX's commercial
subscriber agreements. At the same time as the loan is made, DMX will grant to
TCI and its affiliates rights to distribute DMX's services on the terms and
conditions set forth in the form of affiliation agreement to be submitted to DMX
under separate cover.
Consummation of the Merger will be subject, in addition to the matters
specified above, to the expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, the absence of any material adverse change in the financial condition
or results of operations of DMX, effectiveness of a registration statement under
the Securities Act of 1933 pertaining to the issuance of shares of MusicCo in
the Merger and the Puts, the absence of any court order or other legal
requirement that would have the effect of making consummation of the Merger
illegal, the obtaining of any material required consents of third parties
<PAGE>
DMX Inc. Board of Directors
August 30, 1996
Page 3
and the accuracy as of the closing of representations and warranties set forth
in the merger agreement.
Each of DMX and TCI agrees that it will not issue any press release or
otherwise disclose the contents of this letter without the approval of the
other, which approval will not be unreasonably withheld.
Except for the agreement stated in the immediately preceding paragraph,
this letter is intended only to assist the parties in negotiating definitive
terms of the proposed transactions and is not intended to constitute or create a
legally binding obligation. Prior to the execution of definitive documents
expressly stating the intention of the parties to be legally bound, either party
may terminate negotiations at any time without further obligation or liability.
Please indicate your agreement with the foregoing by executing and
returning a copy of this letter.
Very truly yours,
TELE-COMMUNICATIONS, INC
By: /s/ Brendan R. Clouston
-----------------------------------
Brendan R. Clouston
Executive Vice President
Agreed and accepted:
DMX Inc.
By:
------------------------
Title:
---------------------
Dated: , 1996
-------------
