<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
Tele-Communications, Inc.
---------------------------------
(NAME OF ISSUER)
1. Tele-Communications, Inc. Series A TCI Group Common Stock, par value $1.00
per share ("Series A TCI Group Common Stock")
2. Tele-Communications, Inc. Series B TCI Group Common Stock, par value $1.00
per share ("Series B TCI Group Common Stock")
3. Tele-Communications, Inc. Series A Liberty Media Group Common Stock, par
value $1.00 per share ("Series A Liberty Media Group Common Stock")
4. Tele-Communications, Inc. Series B Liberty Media Group Common Stock, par
value $1.00 per share ("Series B Liberty Media Group Common Stock")
5. Tele-Communications, Inc. Series A TCI Ventures Group Common Stock, par
value $1.00 per share ("Series A Ventures Group Common Stock")
6. Tele-Communications, Inc. Series B TCI Ventures Group Common Stock, par
value $1.00 per share ("Series B Ventures Group Common Stock")
---------------------------------
(TITLE OF CLASS OF SECURITIES)
<TABLE>
<S> <C> <C>
1. Series A TCI Group Common Stock: 87924V101
2. Series B TCI Group Common Stock: 87924V200
3. Series A Liberty Media Group Common Stock: 87924V507
4. Series B Liberty Media Group Common Stock: 87924V606
5. Series A Ventures Group Common Stock: 87924V887
6. Series B Ventures Group Common Stock: 87924V879
</TABLE>
---------------------------------
(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 Sections 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(b) 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 7
<PAGE>
CUSIP Nos.
<TABLE>
<S> <C>
Series A TCI Group Common Stock: 87924V101
Series B TCI Group Common Stock: 87924V200
Series A Liberty Media Group Common Stock: 87924V507
Series B Liberty Media Group Common Stock: 87924V606
Series A Ventures Group Common Stock: 87924V887
Series B Ventures Group Common Stock: 87924V879
</TABLE>
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------
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) N/A.
- ----------------------------------------------------------------------------------------------------------------------
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 Series A TCI Group Common Stock 0
Series B TCI Group Common Stock 0
Series A Liberty Media Group Common Stock 0
Series B Liberty Media Group Common Stock 0
Series A Ventures Group Common Stock 0
Series B Ventures Group Common Stock 0
----------------------------------------------------------------------------------------------------
8) Shared Voting Power Series A TCI Group Common Stock 0
Series B TCI Group Common Stock 0
Number of Shares Series A Liberty Media Group Common Stock 0
Series B Liberty Media Group Common Stock 0
Beneficially Series A Ventures Group Common Stock 0
Series B Ventures Group Common Stock 0
Owned by Each ----------------------------------------------------------------------------------------------------
9) Sole Dispositive Power Series A TCI Group Common Stock 0
Reporting Person Series B TCI Group Common Stock 0
Series A Liberty Media Group Common Stock 0
With Series B Liberty Media Group Common Stock 0
Series A Ventures Group Common Stock 0
Series B Ventures Group Common Stock 0
----------------------------------------------------------------------------------------------------
10) Shared Dispositive Power Series A TCI Group Common Stock 0
Series B TCI Group Common Stock 0
Series A Liberty Media Group Common Stock 0
Series B Liberty Media Group Common Stock 0
Series A Ventures Group Common Stock 0
Series B Ventures Group Common Stock 0
----------------------------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
Series A TCI Group Common Stock 0
Series B TCI Group Common Stock 0
Series A Liberty Media Group Common Stock 0
Series B Liberty Media Group Common Stock 0
Series A Ventures Group Common Stock 0
Series B Ventures Group Common Stock 0
- ----------------------------------------------------------------------------------------------------------------------
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) / /
- ----------------------------------------------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
0% of Series A TCI Group Common Stock
0% of Series B TCI Group Common Stock
0% of Series A Liberty Media Group Common Stock
0% of Series B Liberty Media Group Common Stock
0% of Series A Ventures Group Common Stock
0% of Series B Ventures Group Common Stock
- ----------------------------------------------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions) OO
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2 of 7
<PAGE>
ITEM 1. SECURITY AND ISSUER
Kim Magness, as the manager of Magness Securities, LLC (the "Magness
LLC"), hereby amends and supplements the Statement on Schedule 13D (the
"Statement") with respect to the following shares of stock of
Tele-Communications, Inc. beneficially owned by the Magness LLC.
1. Tele-Communications, Inc. Series A TCI Group, Common Stock, par
value $1.00 per share ("Series A TCI Group Common Stock");
2. Tele-Communications, Inc. Series B TCI Group, Common Stock, par
value $1.00 per share ("Series B TCI Group Common Stock");
3. Tele-Communications, Inc. Series A Liberty Media Group, Common
Stock, par value $1.00 per share ("Series A Liberty Media Group Common Stock");
4. Tele-Communications, Inc. Series B Liberty Media Group, par value
$1.00 per share ("Series B Liberty Media Group Common Stock");
5. Tele-Communications, Inc. Series A TCI Ventures Group, Common
Stock, par value $1.00 per share ("Series A Ventures Group Common Stock");
6. Tele-Communications, Inc. Series B TCI Ventures Group, Common
Stock, par value $1.00 per share ("Series B Ventures Group Common Stock"); and
The issuer of 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, the Series A Ventures Group Common Stock and
the Series B Ventures Group Common Stock (collectively, the "Company
Securities") is Tele-Communications, Inc. (the "Company" or "TCI") whose
principal executive offices are located at Terrace Tower II, 5619 DTC Parkway,
Englewood, Colorado 80111.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 of the Statement is hereby amended and supplemented by adding
the following at the end thereof:
AT&T MERGER
On March 9, 1999, AT&T Corp. ("AT&T") acquired TCI in a merger (the
"AT&T Merger") in which Italy Merger Corp., a wholly-owned subsidiary of
AT&T, merged with and into TCI, and TCI thereby became a subsidiary of AT&T.
As a result of the AT&T Merger, (i) each share of 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 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 "AT&T Class A Liberty Media Group Common Stock"),
(iv) each share of 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
"AT&T Class B Liberty Media Group Common Stock"), (v) each share of Series A
Ventures Group Common Stock was converted into 0.52 of a share of AT&T Class
A Liberty Media Group Common Stock, (vi) each share of Series B Ventures
Group Common
Page 3 of 7
<PAGE>
Stock was converted into 0.52 of a share of AT&T 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 AT&T 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 AT&T 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.
CHANGES TO CALL AGREEMENT AND STOCKHOLDERS' AGREEMENT
In March 1999, the Magness Group (now including Magness FT Investment
Company LLC ("FT LLC"), Magness Securities, 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 AT&T Class B Liberty Media Group Common Stock 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 AT&T 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 4 of 7
<PAGE>
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 of the Statement is hereby deleted in its entirety and replaced
with the following:
(a) The aggregate number and percentage of the Company Securities
beneficially owned by the filing person are as follows:
<TABLE>
<CAPTION>
AMOUNT OF PERCENT OF
TITLE OF CLASS BENEFICIAL OWNERSHIP CLASS
-------------- -------------------- -----
<S> <C> <C>
Series A TCI Group Common Stock 0(1) 0%
Series B TCI Group Common Stock 0(1) 0%
Series A Liberty Media Group Common Stock 0(1) 0%
Series B Liberty Media Group Common Stock 0(1) 0%
Series A Ventures Group Common Stock 0(1) 0%
Series B Ventures Group Common Stock 0(1) 0%
</TABLE>
(1) On March 9, 1999, AT&T acquired the Company in the AT&T Merger in
which Italy Merger Corp., a wholly-owned subsidiary of AT&T, merged
with and into TCI, and TCI thereby became a subsidiary of AT&T. As a
result of the AT&T Merger, (i) each share of 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 Series A
Liberty Media Group Common Stock was converted into one share of AT&T
Class A Liberty Media Group Common Stock, (iv) each share of Series B
Liberty Media Group Common Stock was converted into one share of AT&T
Class B Liberty Media Group Common Stock, (v) each share of Series A
Ventures Group Common Stock was converted into 0.52 of a share of AT&T
Class A Liberty Media Group Common Stock, (vi) each share of Series B
Ventures Group Common Stock was converted into 0.52 of a share of AT&T
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 AT&T 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 AT&T Class A Liberty Media Group Common Stock.
(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>
Shared
Class of Security Sole Power Power
----------------- ---------- -----
<S> <C> <C>
Series A TCI Group Common Stock 0 0
Series B TCI Group Common Stock 0 0
Series A Liberty Media Group Common Stock 0 0
Series B Liberty Media Group Common Stock 0 0
Series A Ventures Group Common Stock 0 0
Page 5 of 7
<PAGE>
Series B Ventures Group Common Stock 0 0
</TABLE>
(c) The transactions described in Item 4 are the only transactions
effected during the last sixty days or since the most recent filing on Schedule
13D 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) On March 9, 1999, the reporting person disposed of all of the
shares of the Company Securities beneficially owned by the reporting person, and
therefore the reporting person is not a beneficial owner of more than five
percent of such shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Item 6 of the Statement is hereby amended and supplemented by adding
the following at the end thereof:
TCI, the Malones, the Magness Group, Liberty Ventures Group LLC and
Liberty Media Corporation are parties to the Stockholders' Letter Agreement, and
TCI, the Magness Group, Liberty Ventures Group LLC and Liberty Media Corporation
are parties to the Magness Letter Agreement as described in Item 4.
The Stockholders' Letter Agreement and the Magness Letter Agreement are
attached to this Statement as Exhibits 99.3 and 99.4, respectively, and are
incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
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)
Page 6 of 7
<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 7 of 7
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION.
<S> <C>
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
