WILLIAMS COMMUNICATIONS GROUP INC
S-3, 2001-01-12
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
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<PAGE>   1

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 12, 2001
                              REGISTRATION NO. 333-
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM S-3
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                   ----------

                       WILLIAMS COMMUNICATIONS GROUP, INC.

             (Exact name of registrant as specified in its charter)


           DELAWARE                                   73-1462856
(State or other jurisdiction of                    (I.R.S. employer
incorporation or organization)                    identification no.)

                               ONE WILLIAMS CENTER
                              TULSA, OKLAHOMA 74172
                                 (918) 573-2000
     (Address, including zip code, and telephone number, including area code
                  of registrant's principal executive offices)

                                   ----------

                                  BOB F. McCOY
                           SENIOR VICE PRESIDENT - LAW
                       WILLIAMS COMMUNICATIONS GROUP, INC.
                               ONE WILLIAMS CENTER
                              TULSA, OKLAHOMA 74172
                                 (918) 573-2000
 (Name, address, including zip code, and telephone number, including area code,
                              of agent for service)

                                   ----------

                                    Copy To:
                              ROBERT A. CURRY, ESQ.
                  CONNER & WINTERS, A PROFESSIONAL CORPORATION
                             3700 FIRST PLACE TOWER
                               15 EAST 5TH STREET
                           TULSA, OKLAHOMA 74103-4344
                                 (918) 586-5711

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
   From time to time after the effective date of this Registration Statement.

                                   ----------


<PAGE>   2


         If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

         If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]

         If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

         If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

         If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

         The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such dates as the Commission, acting pursuant to Section 8(a), may
determine.

                                   ----------

                        CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
     TITLE OF EACH                                  PROPOSED                 PROPOSED
       CLASS OF                AMOUNT                MAXIMUM                 MAXIMUM                 AMOUNT OF
      SECURITIES                TO BE            AGGREGATE PRICE        AGGREGATE OFFERING         REGISTRATION
   TO BE REGISTERED       REGISTERED(1)(2)         PER UNIT(2)             PRICE(1)(2)(3)              FEE(3)
------------------------  ----------------       ----------------       ------------------         ------------
<S>                       <C>                    <C>                    <C>                        <C>
     Class A Common
     Stock, $.01 par
       value(4)(5)
     Class B Common
     Stock, $.01 par
       value(4)(5)
 Preferred Stock, $.01
       par value(5)

  Depositary Shares(5)

   Debt Securities(5)

       Warrants(5)

     Stock Purchase
  Contracts and Stock
   Purchase Units(5)

Subscription Rights(5)
------------------------  ----------------       ----------------       ------------------         ------------
         TOTAL            $                      $                        $2,000,000,000             $500,000
========================  ================       ================       ==================         ============
</TABLE>



<PAGE>   3


(1)      The aggregate public offering price of the securities registered hereby
         will not exceed $2,000,000,000. The initial public offering price of
         any securities denominated in any foreign currencies or currency units
         shall be the U.S. dollar equivalent thereof based on the prevailing
         exchange rates at the respective times such securities are first
         offered. Any securities registered hereunder may be sold separately or
         as units with other securities registered hereby.

(2)      Pursuant to General Instruction II.D to Form S-3, the Amount To Be
         Registered, the Proposed Maximum Aggregate Offering Price Per Unit, and
         the Proposed Maximum Aggregate Offering Price have been omitted for
         each class of securities that are being registered hereby.

(3)      Calculated pursuant to Rule 457(o) of the rules and regulations under
         the Securities Act of 1933.

(4)      This Registration Statement also relates to rights to purchase shares
         of the registrant's Series A Junior Participating Preferred Stock (the
         "Rights"), which are attached to all shares of Class A common stock and
         Class B common stock. Until the occurrence of certain prescribed
         events, the Rights are not exercisable, are evidenced by the
         certificates for the Class A common stock and Class B common stock and
         will be transferred along with and only with the Class A common stock
         and Class B common stock. The value attributable to the Rights, if any,
         is reflected in the value of the common stock.

(5)      An indeterminate number of shares or amount of Class A common stock,
         Class B common stock, preferred stock, depositary shares, debt
         securities, warrants, stock purchase contracts and stock purchase units
         and subscription rights, as may from time to time be issued at
         indeterminate prices, but with an aggregate initial offering price not
         to exceed $2,000,000,000, plus such indeterminate number of shares of
         Class A common stock, Class B common stock and preferred stock as may
         be issued in exchange for, or upon conversion of, other preferred stock
         or debt securities registered hereunder, or upon exercise of warrants
         registered hereunder. Debt securities may be issued with original issue
         discount such that the aggregate initial public offering price,
         together with the other securities issued hereunder, will not exceed
         $2,000,000,000.

                                   ----------



<PAGE>   4


THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS DECLARED EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.


                 SUBJECT TO COMPLETION, DATED JANUARY 12, 2001

PROSPECTUS


                       WILLIAMS COMMUNICATIONS GROUP, INC.

                                 $2,000,000,000


  COMMON STOCK, PREFERRED STOCK, DEPOSITARY SHARES, DEBT SECURITIES, WARRANTS,
     STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS, SUBSCRIPTION RIGHTS

                                   ----------



         We will provide the specific terms of each series or issue of
securities in supplements to this prospectus. You should read this prospectus
and the supplements carefully before you invest.

         Our Class A common stock trades on the New York Stock Exchange under
the symbol "WCG".

                                   ----------

         THERE ARE SIGNIFICANT RISKS ASSOCIATED WITH ANY INVESTMENT IN OUR
SECURITIES. THESE RISK FACTORS WILL BE DISCUSSED IN DETAIL IN EACH SUPPLEMENT TO
THIS PROSPECTUS UNDER THE HEADING "RISK FACTORS." YOU SHOULD REVIEW THAT SECTION
OF THE PROSPECTUS SUPPLEMENT FOR A DISCUSSION OF MATTERS THAT INVESTORS IN OUR
SECURITIES SHOULD CONSIDER.


                                   ----------

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.


         This prospectus may not be used to sell securities unless accompanied
by a prospectus supplement.

                                   ----------





            The date of this prospectus is              , 2001


<PAGE>   5


                                TABLE OF CONTENTS


<TABLE>
<S>                                                                                                                 <C>
 ABOUT THIS PROSPECTUS................................................................................................i
 WHERE YOU CAN FIND MORE INFORMATION..................................................................................i
 FORWARD-LOOKING STATEMENTS.........................................................................................iii
 WILLIAMS COMMUNICATIONS GROUP, INC...................................................................................1
 USE OF PROCEEDS......................................................................................................1
 RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND
     REQUIREMENTS.....................................................................................................2
 DESCRIPTION OF CAPITAL STOCK.........................................................................................3
 DESCRIPTION OF DEPOSITARY SHARES....................................................................................13
 DESCRIPTION OF DEBT SECURITIES......................................................................................17
 DESCRIPTION OF WARRANTS.............................................................................................27
 DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS....................................................29
 DESCRIPTION OF SUBSCRIPTION RIGHTS..................................................................................30
 PLAN OF DISTRIBUTION................................................................................................32
 LEGAL MATTERS.......................................................................................................33
 EXPERTS.............................................................................................................33
</TABLE>



<PAGE>   6


                              ABOUT THIS PROSPECTUS

         This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under this shelf registration process, we may, from time to time, sell any
combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $2,000,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time we offer to sell securities, we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with the additional information described under the heading
"Where You Can Find More Information."


                       WHERE YOU CAN FIND MORE INFORMATION

         We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may inspect and copy any of these documents
at the public reference facilities of the SEC at its principal offices at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and
its regional offices at Northwest Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New
York, New York 10048. You can obtain information on the operation of the SEC's
public reference facilities by calling 1-800-SEC-0330. Information which we have
filed is also available at the SEC's worldwide web site at http://www.sec.gov
which contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC. You can also obtain
these materials at set rates from the Public Reference Section of the SEC at its
principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549.

         This prospectus is part of a registration statement filed by us with
the SEC. You can obtain the full registration statement from the SEC as
indicated above or from us.

         The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information we later file with the
SEC will automatically update and supercede this information. In addition, any
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, after the date of the initial
filing of the registration statement and prior to the effectiveness of the
registration statement will be incorporated by reference in this prospectus. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act, until the termination of the offering of the securities
made by this prospectus:

         o        our registration statement on Form 8-A, filed September 29,
                  1999, which contains a description of our Class A common
                  stock, including any amendment or report filed for the
                  purposes of updating that description;

         o        our annual report on Form 10-K/A for the year ended December
                  31, 1999;

         o        our quarterly reports on Form 10-Q for the quarters ended
                  March 31, 2000, June 30, 2000, and September 30, 2000; and

         o        our current reports on Form 8-K filed with the SEC on March 6,
                  2000, July 17, 2000, August 2, 2000, September 14, 2000, and
                  October 30, 2000.

         We will provide without charge, upon written or oral request, a copy of
any or all of the documents incorporated by reference into this prospectus
(other than exhibits that are specifically incorporated by reference into those
documents). Requests should be directed to:

                          Williams Communications Group, Inc.
                          One Williams Center
                          Tulsa, Oklahoma 74172
                          (918) 573-2000
                          Attention: Corporate Secretary



                                      -i-
<PAGE>   7


         The reports, proxy statements and other information we file with the
SEC can also be inspected and copied at the New York Stock Exchange, 20 Broad
Street, New York, New York 10002. For more information on obtaining copies of
our public filings at the New York Stock Exchange, you should call (212)
656-5060.

         You should rely only on the information incorporated by reference or
provided in this prospectus and its supplement(s). We have not authorized anyone
to provide you with different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy the securities
in any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.





                                      -ii-


<PAGE>   8


                           FORWARD-LOOKING STATEMENTS

         This prospectus (including the documents incorporated by reference
herein) and the accompanying prospectus supplement contain forward-looking
statements. These statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially different from any future results, performances or achievements
expressed or implied by the forward-looking statements. Forward-looking
statements include but are not limited to:

         o        our expectations and estimates as to completion dates,
                  construction costs and subsequent maintenance, expansion and
                  enhancement of our network

         o        our ability to implement successfully our operating strategy
                  and attract sufficient traffic on our network

         o        our ability to provision, install and deliver services

         o        our future financial performance, including growth in net
                  sales and earnings

         o        our continuing relationship with Williams, SBC, Intel,
                  Telfonos de Mexico and other companies with which we have
                  entered strategic alliances

         In addition to factors that may be described in this prospectus, the
following factors, among others, could cause our actual results to differ
materially from those expressed in any forward-looking statements we make:

         o        whether the tax-free spin-off of our business to Williams'
                  stockholders is completed, and the timing of its completion

         o        the effects of and changes in political and/or economic
                  conditions, including inflation, interest rates and monetary
                  conditions, and in communications, trade, monetary, fiscal and
                  tax policies in the United States and in foreign markets,
                  including Argentina, Australia, Brazil, Canada, Chile, China,
                  Japan and Mexico

         o        changes in external competitive market factors or in our
                  budget which might affect our results of operations

         o        competition from other communications companies

         o        changes in the technological, regulatory or business
                  environment applicable to us or the communications industry
                  generally

         o        changes in the prices of equipment, supplies, rights of way or
                  construction expenses necessary to complete, expand and
                  enhance our network

         You should carefully review our consolidated financial statements and
related notes incorporated by reference in this prospectus, as well as the risk
factors described in any supplement to this prospectus, before deciding to
invest in our securities.

Statements that use the terms "believe," "do not believe," "expect," "plan,"
"intend," "estimate," "anticipate" and similar expressions are intended to
identify forward-looking statements. These statements reflect our current views
with respect to future events and are based on assumptions and subject to risks
and uncertainties.



                                     -iii-
<PAGE>   9


                       WILLIAMS COMMUNICATIONS GROUP, INC.

         We own or lease, operate and have substantially completed a nationwide
intercity fiber-optic network, which we are extending locally and globally. We
operate through four business units. Our network unit provides Internet, data,
voice and video services exclusively to communications service providers.
Through our broadband media unit, we transmit live and non-live media content
worldwide, including broadcast news, sports, advertising and special events. Our
solutions unit provides professional communications services, and sells and
installs communications equipment, to address the comprehensive voice and data
needs of organizations of all sizes. Through our strategic investments unit, we
make investments in companies that we believe will, directly or indirectly,
increase revenue opportunities for our other business units. We have formed
strategic alliances with communications companies to secure long-term,
high-capacity commitments for traffic on our network and to enhance our service
offerings.

         Prior to the initial public offering of our Class A common stock in
October 1999, our company was a wholly owned subsidiary of The Williams
Companies, Inc. Williams currently owns 100% of the outstanding shares of our
Class B common stock, or 85% of the total outstanding shares of our Class A and
Class B common stock combined. On July 24, 2000, Williams announced that its
board of directors had authorized its management to pursue a course of action
that, if successful, would lead to a complete separation of our business from
Williams' energy business. On November 16, 2000, Williams announced that its
board of directors had authorized its management to continue to pursue a
tax-free spin-off of our business to Williams' stockholders. Williams further
announced that, assuming market conditions and other factors continue to support
this action, its board of directors expects to vote during the first part of
2001 to set a record date and establish the ratio of our stock to be distributed
and to direct the distribution of our shares.

         In a filing with the Securities and Exchange Commission on January 8,
2001, Williams disclosed that, although no decision has been made whether to
separate the businesses, it is considering, in either case, contributing the
promissory note made by us in favor of Williams of approximately $975 million,
adjusted for resolution of certain outstanding items, in exchange for additional
shares of our common equity. Williams further disclosed that it also may
contribute certain physical assets, including a building under construction, in
exchange for additional shares of our common equity. Williams stated that it is
evaluating several credit support mechanisms to enable us to obtain the capital
we need to allow us to continue to execute our growth plan and business
strategy.

         Our principal executive offices are located at One Williams Center,
Tulsa, Oklahoma 74172, and our telephone number is (918) 573-2000.

         Except when used in the section below entitled "Description of Debt
Securities," and unless the context otherwise requires, when we refer in this
prospectus to "we," "us" or "our" or use similar terms, we mean Williams
Communications Group, Inc. and all of its subsidiaries, collectively.

                                 USE OF PROCEEDS

         Unless otherwise indicated in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of the securities described in this
prospectus for the enhancement and expansion of our network and for working
capital and general corporate purposes, which may include repayment of
outstanding debt, capital expenditures, investments or any other purposes that
we may specify in a prospectus supplement. Pending such application, we may
invest the net proceeds in short-term, interest-bearing securities.



                                      -1-
<PAGE>   10


                     RATIO OF EARNINGS TO FIXED CHARGES AND
                   RATIO OF EARNINGS TO COMBINED FIXED CHARGES
                    AND PREFERRED STOCK DIVIDEND REQUIREMENTS

         The following table presents our consolidated ratio of earnings to
fixed charges and deficiency of earnings to cover fixed charges for the periods
shown.

<TABLE>
<CAPTION>
                                    Nine Months
                                 Ended September 30,                         Year Ended December 31,
                                 -------------------       --------------------------------------------------------
                                        2000                  1999          1998          1997       1996      1995
                                 -------------------       ----------    ----------    ---------   --------   -----
                                                            (In thousands, except ratio)
<S>                                  <C>                   <C>           <C>           <C>         <C>         <C>
Ratio of earnings to fixed
   charges...............                   --                    --            --           --         --     1.43
Deficiency of
   earnings to cover fixed
   charges...............            $(293,403)            $(402,053)    $(209,745)    $(19,897)   $(1,545)      --
</TABLE>


         The following table presents our consolidated ratio of earnings to
combined fixed charges and preferred stock dividend requirements and deficiency
of earnings to cover combined fixed charges and preferred stock dividend
requirements for the periods shown.


<TABLE>
<CAPTION>
                                          Nine Months
                                      Ended September 30,                         Year Ended December 31,
                                      -------------------       ----------------------------------------------------------
                                             2000                   1999          1998          1997        1996     1995
                                      -------------------       ------------  ------------  ------------ ---------- ------
                                                                 (In thousands, except ratio)
<S>                                          <C>                 <C>            <C>           <C>         <C>         <C>
Ratio of earnings to
   combined fixed charges
   and preferred stock
   dividend requirements ..........                 --                  --             --            --          --   1.43
Deficiency of earnings to
   cover combined fixed
   charges and preferred
   stock dividend
   requirements ...................          $(293,943)          $(402,053)     $(209,745)    $ (19,897)  $  (1,545)    --
</TABLE>



                                       -2-
<PAGE>   11


                          DESCRIPTION OF CAPITAL STOCK

CLASS A COMMON STOCK AND CLASS B COMMON STOCK

GENERAL

         Under our restated certificate of incorporation, we are authorized to
issue 1,000,000,000 shares of Class A common stock and 500,000,000 shares of
Class B common stock, par value $0.01 per share. The holders of Class A common
stock and Class B common stock have identical rights except with respect to
voting, conversion and transfer.

VOTING RIGHTS

         Holders of our Class A common stock are entitled to one vote per share
on all matters to be voted on by stockholders, while holders of Class B common
stock are entitled to 10 votes per share. Holders of shares of our Class A
common stock and Class B common stock are not entitled to cumulate their votes
in the election of directors. Generally, all matters to be voted on by
stockholders must be approved by a majority of the votes entitled to be cast by
all holders of our Class A common stock and Class B common stock present in
person or represented by proxy, voting together as a single class, subject to
any voting rights granted to holders of any preferred stock. Except as otherwise
provided by law or in our restated certificate of incorporation, and subject to
any voting rights granted to holders of any outstanding preferred stock,
amendments to our restated certificate of incorporation must be approved by a
majority of the votes entitled to be cast by all holders of our Class A common
stock and Class B common stock present in person or represented by proxy, voting
together as a single class. However, amendments to our restated certificate of
incorporation that would alter or change the powers, preferences or special
rights of our Class A common stock or Class B common stock so as to affect them
adversely also must be approved by a majority of the votes entitled to be cast
by the holders of the common stock of that class, voting as a separate class.
Any amendment to our restated certificate of incorporation to increase the
authorized shares of any class requires the approval only of a majority of the
votes entitled to be cast by all holders of Class A common stock and Class B
common stock present in person or represented by proxy, voting together as a
single class, subject to the rights set forth in any series of preferred stock
created as described below.

DIVIDENDS

         Holders of our Class A common stock and Class B common stock will share
equally on a per share basis in any dividend declared by the board of directors,
subject to any preferential rights of any outstanding preferred stock. Dividends
consisting of shares of Class A common stock and Class B common stock may be
paid only as follows:

                  (a) shares of Class A common stock may be paid only to holders
         of Class A common stock, and shares of Class B common stock may be paid
         only to holders of Class B common stock; and

                  (b) the number of shares so paid will be equal on a per share
         basis with respect to each outstanding share of Class A common stock
         and Class B common stock.

         We may not split, reclassify, subdivide or combine shares of either
class of common stock without at the same time proportionally reclassifying,
subdividing or combining shares of the other class.

ISSUANCE OF CLASS B COMMON STOCK, OPTIONS OR WARRANTS

         Subject to certain provisions regarding dividends and other
distributions described above, we will not be entitled to issue additional
shares of Class B common stock, or issue options, rights or warrants to
subscribe for additional shares of Class B common stock, except that we may make
a pro rata offer to all holders of common stock of rights to purchase additional
shares of the class of common stock held by them. The Class A common stock and
the Class B common stock will be treated equally with respect to any offer we
make to holders of common stock of options, rights or warrants to subscribe for
any of our other capital stock.



                                      -3-
<PAGE>   12


MERGER OR CONSOLIDATION

         In the event of a merger or consolidation, the holders of our Class A
common stock and Class B common stock will be entitled to receive the same per
share consideration, if any, except that if the consideration includes voting
securities, or the right to acquire voting securities or securities exchangeable
for, or convertible into, voting securities, we may, but are not required to,
provide for the holders of Class B common stock to receive consideration
entitling them to 10 times the number of votes per share as the consideration
being received by holders of Class A common stock.

CONVERSION OF CLASS B COMMON STOCK

         Our Class B common stock is convertible into Class A common stock on a
share-for-share basis at the option of the holder at any time, or automatically
upon transfer to a person or entity which is not a permitted transferee. In
general, permitted transferees will include Williams, its direct and indirect
subsidiaries, any person or entity in which Williams or any successor
beneficially owns, directly or indirectly, at least 50% of the equity or the
voting securities, any successor of any of the foregoing and stockholders of
Williams who receive our Class B common stock in a tax-free spin-off. A tax-free
spin-off generally means a transaction in which stockholders of Williams receive
shares of our Class A common stock or Class B common stock as a distribution
with respect to, or in exchange for, stock of Williams without being required to
recognize gain or loss for federal income tax purposes by reason of Section 355
of the Internal Revenue Code of 1986 (or any corresponding provision of any
successor statute). On November 16, 2000, Williams announced that its board of
directors had authorized its management to continue to pursue a tax-free
spin-off of our business to Williams' stockholders. Williams further announced
that, assuming market conditions and other factors continue to support this
action, its board of directors expects to vote during the first part of 2001 to
set a record date and establish the ratio of our stock to be distributed and to
direct the distribution of our shares. Following any distribution of our Class B
common stock to stockholders of Williams, shares of our Class B common stock
will no longer be convertible into shares of our Class A common stock. Shares of
our Class B common stock transferred to stockholders of Williams in a tax-free
spin-off will not be converted into shares of our Class A common stock, and,
following a tax-free spin-off, shares of our Class B common stock will be
transferable as our Class B common stock, subject to applicable laws, and will
not be automatically converted into Class A common stock upon such a transfer.

LISTING

         Our Class A common stock is listed on the New York Stock Exchange under
the symbol "WCG." Our Class B common stock is not listed; however, if a tax-free
spin-off occurs, as described above, we anticipate that our Class B common stock
will be listed on the New York Stock Exchange.

TRANSFER AGENT

         The transfer agent and registrar for our Class A common stock is The
Bank of New York. If a tax-free spin-off occurs, as described above, we
anticipate that The Bank of New York will also be the transfer agent and
registrar for our Class B common stock.

PREFERRED STOCK

GENERAL

         Under our restated certificate of incorporation, we are authorized to
issue 500,000,000 shares of preferred stock, par value $.01 per share. At
September 30, 2000, a total of 5,000,000 shares of our 6.75% Redeemable
Cumulative Convertible Preferred Stock, par value $0.01 per share, which we
refer to as our 6.75% preferred stock, were issued and outstanding. Our board of
directors has also authorized a series of our preferred stock, designated as the
Series A Junior Participating Preferred Stock, par value $0.01 per share, for
issuance under our stockholder rights plan. Our Series A Junior Participating
Preferred Stock, which we refer to as our Series A preferred stock, is described
in the discussion of our stockholder rights plan under "--Stockholder rights
plan" below.



                                      -4-
<PAGE>   13


         Our board of directors is empowered, without approval of the
stockholders, to cause shares of preferred stock to be issued from time to time
in one or more additional series, and the board of directors may fix the number
of shares of each new series and the designation, powers, privileges,
preferences and rights and the qualifications, limitations and restrictions of
the shares of each series.

         The specific matters that our board of directors may determine include
the following:

         o        the designation of each series

         o        the number of shares of each series

         o        the rate of any dividends

         o        whether any dividends shall be cumulative or non-cumulative

         o        the terms of any redemption

         o        the amount payable in the event of any voluntary or
                  involuntary liquidation, dissolution or winding up of the
                  affairs of our company

         o        rights and terms of any conversion or exchange

         o        restrictions on the issuance of shares of the same series or
                  any other series

         o        any voting rights

         The prospectus supplement relating to any new series of preferred stock
issued hereunder will specify the applicable terms, which may include those
listed above. The issuance of shares of our preferred stock, or the issuance of
rights to purchase shares of our preferred stock, could be used to discourage an
unsolicited acquisition proposal. For example, a business combination could be
impeded by our issuing a series of preferred stock containing class voting
rights that would enable the holder or holders of this series to block such a
transaction. Alternatively, a business combination could be facilitated by
issuing a series of preferred stock having sufficient voting rights to provide a
required percentage vote of our stockholders.

         In addition, under certain circumstances, the issuance of preferred
stock could adversely affect the voting power and other rights of the holders of
our common stock. Although our board is required to make any determination to
issue any preferred stock based on its judgment as to the best interests of our
stockholders, it could act in a manner that would discourage an acquisition
attempt or other transaction that some, or a majority, of the stockholders might
believe to be in their best interests or in which stockholders might receive a
premium for their stock over prevailing market prices of the stock. Our board
does not at present intend to seek stockholder approval prior to any issuance of
currently authorized stock, unless otherwise required by law or applicable stock
exchange requirements.

6.75% PREFERRED STOCK

         GENERAL. In September 2000, we issued 5,000,000 shares of our 6.75%
preferred stock with a liquidation preference of $50.00 per share.

         DIVIDENDS. Dividends on our 6.75% preferred stock are cumulative from
the date of issue and are payable on January 15, April 15, July 15, and October
15 of each year, beginning on January 15, 2001, at an annual rate of 6.75% of
the $50.00 liquidation preference per share. The terms of our credit facility
and our senior redeemable notes currently restrict our ability to pay cash
dividends. We have the option, however, to pay all or any part of a dividend by
delivering shares of our Class A common stock to the transfer agent to be resold
for cash. In this case, we must deliver to the transfer agent a number of shares
of our Class A common stock which, when resold by the transfer agent, will
result in net cash proceeds sufficient to pay the applicable dividend in cash to
the holders of the shares of preferred stock.

         CONVERSION. Each share of our 6.75% preferred stock is convertible, at
the option of the holder, into 1.7610 shares of our Class A common stock, based
on a conversion price of $28.39 per share, subject to adjustment in a number of
circumstances. On or after October 15, 2005, we may, at our option, cause the
conversion rights on our shares of our 6.75% preferred stock to terminate. We
may exercise this option only if, for at least 20 trading days within any period
of 30 consecutive trading days, including the last trading day of that period,
the current market price of our Class A common stock exceeds $39.75 per share,
which is equal to 140% of the conversion price, subject to adjustment in a
number of circumstances.



                                      -5-
<PAGE>   14


         OPTIONAL REDEMPTION. We may not redeem any shares of our 6.75%
preferred stock at any time before October 15, 2005. Thereafter, we may, at our
option, redeem all or any part of the shares of 6.75% preferred stock at a
redemption price equal to 103.38% of the liquidation preference if we redeem the
shares in 2005, and thereafter this percentage gradually declines to 100% on and
after October 15, 2010, plus accumulated and unpaid dividends, including special
dividends, if any, to the redemption date. The terms of our debt instruments
currently restrict our ability to redeem shares of our 6.75% preferred stock.

         MANDATORY REDEMPTION. On October 15, 2012, we will be obligated to
redeem all currently outstanding shares of preferred stock for cash, upon not
less than 30 or more than 60 days prior notice sent by first class mail to each
holder's registered address, at 100% of the liquidation preference per share,
plus accumulated and unpaid dividends, including special dividends, if any, to
the date of redemption.

         RANKING. Our 6.75% preferred stock is, with respect to dividend rights
and rights upon liquidation, winding up or dissolution, junior to all our
existing and future debt obligations; junior to each class or series of capital
stock other than our Class A common stock, our Class B common stock and any
other class or series of our capital stock the terms of which provide that such
class or series will rank junior to our 6.75% preferred stock; and on a parity
with each class or series of our capital stock the terms of which provide that
such class will rank on a parity with our 6.75% preferred stock.

STOCKHOLDER RIGHTS PLAN

         Our board has adopted a stockholder rights plan. Pursuant to the rights
plan, one right will be issued and attached to each outstanding share of our
Class A common stock and Class B common stock. For purposes of this section of
this prospectus, we refer to our Class A common stock and Class B common stock
collectively as our common stock. Each right will entitle the holder, in
circumstances described below, to purchase from our company a unit consisting of
one one-hundredth of a share of Series A preferred stock, par value $0.01 per
share, at an exercise price of $100 per right, subject to adjustment in certain
events.

         Initially, the rights will be attached to all certificates representing
outstanding shares of common stock and will be transferred with and only with
these certificates. The rights will become exercisable and separately
certificated only upon the distribution date, which will occur upon the earlier
of the following:

         o        ten business days following a public announcement that a
                  person or group other than specified exempt persons has
                  acquired or obtained the right to acquire beneficial ownership
                  of 15% or more of the shares of our common stock then
                  outstanding

         o        ten business days, or later if determined by our board prior
                  to any person acquiring 15% or more of the shares of our
                  common stock then outstanding, following the commencement or
                  announcement of an intention to commence a tender offer or
                  exchange offer that would result in a person or group becoming
                  an acquiring person

         As soon as practicable after the distribution date, certificates will
be mailed to holders of record of our common stock as of the close of business
on the distribution date. From and after the distribution date, the separate
certificates alone will represent the rights. Prior to the distribution date,
all shares of common stock issued will be issued with rights. Shares of common
stock issued after the distribution date will not be issued with rights, except
that shares issued pursuant to any of the following that exist prior to the
distribution date may be issued with rights:

         o        the exercise of stock options that exist prior to the
                  distribution date

         o        under employee plans or arrangements that exist prior to the
                  distribution date

         o        upon exercise, conversion or exchange of certain securities

         o        in other cases as may be deemed appropriate by our board



                                      -6-
<PAGE>   15


         The final expiration date of the rights will be at the close of
business on June 30, 2009, unless earlier redeemed or exchanged by us as
described below.

         In the event that a person acquires 15% or more of the shares of our
common stock then outstanding, except pursuant to any action or transaction
approved by our board before the person acquires 15% or more of the shares of
our common stock then outstanding, each holder of a right other than that person
and related parties, whose rights will automatically become null and void, will
thereafter be entitled to receive, upon exercise of the right, a number of
shares of our Class A common stock, or, in some circumstances, cash, property or
other securities of our company, having a current market price averaged over the
previous 30 consecutive trading days equal to two times the exercise price of
the right.

         In the event that, at any time on or after a person acquires 15% or
more of the shares of our common stock then outstanding, we effect a merger or
other business combination in which we are not the surviving entity, or any
shares of our common stock are changed into or exchanged for other securities,
or 50% or more of our assets, cash flow or earning power is sold or transferred,
then each holder of a right, except rights owned by any person who has acquired
15% or more of the shares of our common stock then outstanding or related
parties, which will have become void as set forth above, shall thereafter have
the right to receive, upon exercise, a number of shares of common stock of the
acquiring company having a fair market value equal to two times the exercise
price of the right.

         The exercise price payable, and the number of units of Series A
preferred stock, shares of our common stock or other securities or property
issuable, upon exercise of the rights are subject to adjustment from time to
time to prevent dilution in the event of a stock dividend or distribution on our
common stock, a grant or distribution to holders of our common stock of
specified subscription rights, warrants, evidence of indebtedness, cash or other
assets, or other similar events.

         No fractional units will be issued. In lieu thereof, an adjustment in
cash will be made based on the market price of our Class A common stock on the
last trading date prior to the date of exercise. Pursuant to the rights plan, we
reserve the right to require prior to the occurrence of one of the events that
triggers the ability to exercise the rights that, upon any exercise of rights, a
number of rights be exercised so that only whole shares of Series A preferred
stock will be issued.

         We will also have the option, at any time after a person acquires 15%
or more of our common stock, but not after a person has become the beneficial
owner of 50% or more of our common stock then outstanding, to exchange the
rights, other than rights owned by an acquiring person or related parties, which
will have become void, in whole or in part, at an exchange ratio of one share of
common stock, and/or other equity securities deemed to have the same value as
one share of common stock, per right, subject to adjustment.

         At any time prior to the close of business on the tenth business day
following the first public announcement that an acquiring person has become an
acquiring person, by vote of a majority of our board, we may redeem the rights
in whole, but not in part, at a price of $0.01 per right, payable, at our
option, in cash, shares of capital stock or such other consideration as our
board may determine. The rights will terminate at the time so designated by our
board and thereafter the only right of the holders of rights will be to receive
the redemption price.

         Prior to the distribution date, we may amend the rights plan in any
manner. After the distribution date, so long as the rights are redeemable, we
may amend the rights in any manner that does not materially adversely affect the
interests of holders of the rights other than acquiring persons. Until a right
is exercised, the holder, as such, will have no rights as a stockholder of our
company, including the right to vote or to receive dividends.

         The certificate of designations of the Series A preferred stock
provides that each share of Series A preferred stock that may be issued upon
exercise of the rights will be entitled to receive, when, as and if declared,
cash and non-cash dividends equal to 100 times the aggregate per share amount of
all cash and non-cash dividends declared or paid on our common stock, subject to
adjustments for stock splits or dividends payable in our common stock or
reclassifications of our common stock.



                                      -7-
<PAGE>   16


         Holders of Series A preferred stock will have 100 votes per share,
subject to adjustments for stock splits or dividends payable in our common stock
or reclassifications of our common stock and, except as otherwise provided by
the certificate of designations, our restated certificate of incorporation or
applicable law, shall vote together with holders of our common stock as a single
class. In the event that dividends on the Series A preferred stock are in
arrears in an amount equal to six quarterly dividends, all holders of preferred
stock (including Series A preferred stock) with dividends in arrears in that
amount, voting as a class, will have the right to elect two members to our
board, to serve until the election of their successors by the holders of
preferred stock or until such earlier time as all accrued and unpaid
preferential quarterly cash dividends are paid in full.

         In the event of the liquidation, dissolution or winding up of our
company, we may not make any distribution to the holders of shares of stock
ranking junior to the Series A preferred stock until we have paid holders of
Series A preferred stock an amount per share equal to $100 plus accrued and
unpaid dividends and distributions on the Series A preferred stock to the date
of payment. After that payment, we may make no additional distributions to
holders of Series A preferred stock until we have paid holders of our Class A
common stock and Class B common stock an amount per share equal to one-hundredth
of the per share liquidation amount paid to holders of Series A preferred stock.
After we have paid this amount to holders of our Class A common stock and Class
B common stock, we will distribute any remaining assets to holders of Series A
preferred stock and holders of our Class A common stock and Class B common stock
in the ratio of 100:1.

         In the event of a consolidation, merger or other transaction in which
the shares of our common stock are exchanged, holders of shares of Series A
preferred stock will be entitled to receive for each share of Series A preferred
stock held by them the amount and type of consideration equal to 100 times the
aggregate per share amount received by the holders of our common stock, subject
to adjustments for stock splits or dividends payable in our Class A common stock
or reclassifications of our Class A common stock.

         Except for the acquisition of shares of Series A preferred stock in any
other manner permitted by law, our certificate of designations or our restated
certificate of incorporation, the shares of Series A preferred stock are not
redeemable at the option of our company or any holder thereof.

         The rights will have certain anti-takeover effects. The rights will
cause substantial dilution to any person or group that attempts to acquire our
company without the approval of our board. As a result, the rights may render
more difficult or discourage any attempt to acquire our company, even if such
acquisition may be in the interest of our stockholders. Because our board can
redeem the rights or approve a permitted offer, the rights will not interfere
with a merger or other business combination approved by our board.

         The rights plan excludes Williams and its affiliates and associates
from being considered acquiring persons until Williams first ceases to
beneficially own 15% or more of our common stock then outstanding.

PROVISIONS OF OUR RESTATED CERTIFICATE OF INCORPORATION, OUR BY-LAWS AND
DELAWARE LAW

NOTICE OF STOCKHOLDERS' MEETING

         Our by-laws contain provisions requiring that advance notice be
delivered to us of any business to be brought by a stockholder before an annual
or special meeting of stockholders and providing for certain procedures to be
followed by stockholders in nominating persons for election to our board.
Generally, these advance notice provisions require that the stockholder must
give written notice to the secretary of our company:

         o        in the case of an annual meeting, not less than 90 days nor
                  more than 120 days before the first anniversary of the
                  preceding year's annual meeting of stockholders

         o        in the case of a special meeting, not less than 90 days, or,
                  if later, 10 days after the first public announcement of the
                  date of the special meeting, nor more than 120 days prior to
                  the scheduled date of such special meeting

         In each case, the notice must set forth specific information regarding
the stockholder giving the notice and each director nominee or other business
proposed by the stockholder, as applicable, as provided in our by-laws.



                                      -8-
<PAGE>   17


Notwithstanding the foregoing, any stockholder, including Williams, who together
with its affiliates owns capital stock entitled to exercise a majority of the
voting power in an election of directors, may nominate one or more individuals
for election as directors by giving notice to our company not later than five
days before the scheduled date for the election of directors. Generally, only
business set forth in the notice for a special meeting of stockholders may be
conducted at a special meeting.

DIRECTORS

         Our by-laws provide, in accordance with our restated certificate of
incorporation, that, except as may be provided in connection with the issuance
of any series of preferred stock, the number of directors shall be fixed from
time to time exclusively pursuant to a resolution adopted by a majority of the
whole board, as that term is defined in our restated certificate of
incorporation. Our restated certificate of incorporation provides for a
classified board of directors, consisting of three classes as nearly equal in
size as practicable. Each class holds office until the third annual
stockholders' meeting for election of directors following the most recent
election of that class, except that the current terms of two of the classes
expire in 2001 and 2002.

         Subject to the rights of the holders of any series of preferred stock
to elect and remove additional directors under specified circumstances, on or
after the time when Williams and its affiliates own less than 50% of the voting
power of our then-outstanding common stock, a director of our company may be
removed only for cause by affirmative vote of the holders of at least a majority
of the voting power of all of our outstanding shares generally entitled to vote
in the election of directors, voting together as a single class, and vacancies
on our board may only be filled by the affirmative vote of a majority of the
remaining directors. Prior to the time when Williams and its affiliates own less
than 50% of our then-outstanding capital stock, subject to the rights of holders
of any series of preferred stock, a director of our company may be removed, with
or without cause, by the affirmative vote of the holders of at least a majority
of the voting power of all voting stock then outstanding, voting together as a
single class, and vacancies on our board may be filled only by the affirmative
vote of at least 80% of the remaining directors then in office.

         Our restated certificate of incorporation provides that, on or after
the time when Williams and its affiliates own less than 50% of our
then-outstanding common stock, stockholders may not act by written consent in
lieu of a meeting. On or after the time when Williams and its affiliates own
less than 50% of our then-outstanding common stock, special meetings of the
stockholders may be called only by a majority of the whole board, but may not be
called by stockholders. Before the time when Williams and its affiliates own
less than 50% of our then-outstanding common stock, the secretary of our company
is required to call a special meeting of the stockholders at the request of
Williams or its affiliates and stockholder action may be taken by written
consent in lieu of a meeting.

         The inclusion of this provision in our restated certificate of
incorporation may have the effect of reducing the likelihood of derivative
litigation against our directors, and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty of
care, even though such an action, if successful, might otherwise have benefitted
our company and our stockholders.

AMENDMENT OF OUR BY-LAWS

         In general, our by-laws may be altered or repealed and new by-laws
adopted by the holders of a majority of our voting stock or by a majority of the
whole board. However, specified provisions, including those relating to the
limitation of actions by stockholders taken by written consent, the calling of
special stockholder meetings, other stockholder actions and proposals and
certain matters related to our board, may be amended only by the affirmative
vote of holders of at least 66 2/3% of the total voting stock.

LIMITATION ON LIABILITY OF DIRECTORS

         Our restated certificate of incorporation provides, as authorized by
Section 102(b)(7) of the Delaware General Corporation Law, which we refer to as
the DGCL, that our directors will not be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability imposed by law, as in effect from time to time, for the
following:



                                      -9-
<PAGE>   18


         o        any breach of the director's duty of loyalty to our company or
                  our stockholders

         o        any act or omission not in good faith or which involved
                  intentional misconduct or a knowing violation of law

         o        unlawful payments of dividends or unlawful stock repurchases
                  or redemptions as provided in Section 174 of the DGCL

         o        any transaction from which the director derived an improper
                  personal benefit

LIMITATIONS ON CHANGES OF CONTROL OF OUR COMPANY

         The provisions of our restated certificate of incorporation, by-laws
and stockholder rights plan described above, as well as the provisions of
Section 203 of the DGCL described below, could have the following effects, among
others:

         o        delaying, deferring or preventing a change in control

         o        delaying, deferring or preventing the removal of existing
                  management

         o        deterring potential acquirors from making an offer to our
                  stockholders

         o        limiting any opportunity of our stockholders to realize
                  premiums over prevailing market prices of our common stock in
                  connection with offers by potential acquirors

         Any of the above could occur, notwithstanding that a majority of our
stockholders might benefit from such a change in control or offer.

TRANSACTIONS AND CORPORATE OPPORTUNITIES

         Our restated certificate of incorporation includes provisions that
regulate and define the conduct of our business and affairs until the time
Williams ceases to be a significant stockholder of our company. These provisions
serve to determine and delineate the respective rights and duties of our
company, Williams, and some of our directors and officers in anticipation of the
following:

         o        directors, officers and/or employees of Williams may serve as
                  directors of our company

         o        Williams may engage in lines of business that are the same,
                  similar or related to, overlap or compete with our lines of
                  business, subject to the separation agreement

         o        our company and Williams will engage in material business
                  transactions, including pursuant to the various agreements
                  described above

         Our company may, from time to time, enter into and perform agreements
with Williams to engage in any transaction, and to agree to compete or not to
compete with each other, including to allocate, or to cause their respective
directors, officers and employees to allocate, corporate opportunities between
Williams and us. Our restated certificate of incorporation provides that no such
agreement, or its performance, shall be considered contrary to any fiduciary
duty of Williams, as the controlling stockholder of our company, or of any
director, officer and/or employee, if any of the following conditions are
satisfied:

         o        the agreement was entered into before we ceased to be a
                  wholly-owned subsidiary of Williams and continues in effect



                                      -10-
<PAGE>   19


         o        the agreement or transaction was approved, after the deciding
                  body was made aware of the material facts of the relationship
                  between Williams and us and the material terms and facts of
                  the agreement or transaction, by:

                  o        our board, by affirmative vote of a majority of
                           directors who are not interested persons

                  o        by a committee of our board consisting of members who
                           are not interested persons, by affirmative vote of a
                           majority of those members

                  o        by one or more of our officers or employees who is
                           not an interested person and who was authorized by
                           our board or a board committee as specified above or,
                           in the case of an employee, to whom authority has
                           been delegated by an officer to whom the authority to
                           approve such an action has been so delegated

         o        the agreement or transaction was fair to us as of the time it
                  was entered into

         o        the agreement or transaction was approved by affirmative vote
                  of a majority of the shares of our capital stock entitled to
                  vote and who do vote on the agreement or transaction,
                  excluding Williams and any interested person in respect of
                  such agreement or transaction

         For purposes of these provisions, an interested person is generally an
individual who has a personal financial interest in the relevant transaction.

         The provisions of our restated certificate of incorporation with regard
to such transactions and/or corporate opportunities shall terminate when
Williams, together with its affiliates, ceases to be the owner of voting stock
representing 25% or more of the votes entitled to be cast by the holders of all
the then outstanding voting stock; provided, however, that the termination shall
not terminate the effect of these provisions with respect to any agreement
between Williams and us that was entered into before the time of termination or
any transaction entered into in the performance of such agreement, whether
entered into before or after such time, or any transaction entered into between
Williams and us or the allocation of any opportunity between them before such
time. These provisions do not alter the fiduciary duty of loyalty of our
directors under applicable Delaware law. By becoming a stockholder in our
company, you will be deemed to have notice of and have consented to these
provisions of our restated certificate of incorporation, except to the extent
that any of these provisions are inconsistent with Delaware law or the fiduciary
duties of our directors.

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

         We are a Delaware corporation and subject to Section 203 of the DGCL.
Generally, Section 203 prohibits a publicly held Delaware corporation from
engaging in a business combination with an interested stockholder for a period
of three years after the time that stockholder became an interested stockholder
unless, as described below, specified conditions are satisfied. Thus, it may
make acquisition of control of our company more difficult. See "--Limitations
on changes of control of our company" above. The prohibitions in Section 203 of
the DGCL do not apply if the following occur:

         o        prior to the time the stockholder became an interested
                  stockholder, our board of directors approved either the
                  business combination or the transaction which resulted in the
                  stockholder becoming an interested stockholder

         o        upon consummation of the transaction which resulted in the
                  stockholder becoming an interested stockholder, the interested
                  stockholder owned at least 85% of the voting stock of our
                  company outstanding at the time the transaction commenced

         o        at or subsequent to the time the stockholder became an
                  interested stockholder, the business combination is approved
                  by our board of directors and authorized by the affirmative
                  vote of at least 66 2/3% of the outstanding voting stock that
                  is not owned by the interested stockholder



                                      -11-
<PAGE>   20


         Under Section 203 of the DGCL, a business combination includes the
following:

         o        any merger or consolidation of our company with the interested
                  stockholder

         o        any sale, lease, exchange or other disposition, except
                  proportionately as a stockholder of our company, to or with
                  the interested stockholder of assets of our company having an
                  aggregate market value equal to 10% or more of either the
                  aggregate market value of all the assets of our company or the
                  aggregate market value of all the outstanding stock of our
                  company

         o        specified transactions resulting in the issuance or transfer
                  by our company of our stock to the interested stockholder

         o        specified transactions involving our company which have the
                  effect of increasing the proportionate share of the stock of
                  any class or series of our company which is owned by the
                  interested stockholder

         o        specified transactions in which the interested stockholder
                  receives financial benefits provided by us

         Under Section 203 of the DGCL, an interested stockholder generally is
one of the following:

         o        any person that owns 15% or more of the outstanding voting
                  stock of our company

         o        any person that is an affiliate or associate of our company
                  and was the owner of 15% or more of the outstanding voting
                  stock of our company at any time within the three-year period
                  prior to the date on which it is sought to be determined
                  whether that person is an interested stockholder

         o        the affiliates or associates of that person

         Because Williams owned more than 15% of our voting stock before we
became a public company, Section 203 of the DGCL by its terms is not applicable
to business combinations with Williams even though Williams owns 15% or more of
our outstanding stock. If any other person acquires 15% or more of our
outstanding stock, that person will be subject to the provisions of Section 203
of the DGCL.



                                      -12-
<PAGE>   21


                        DESCRIPTION OF DEPOSITARY SHARES

         The following description is a general summary of the terms of the
depositary shares which we may issue. This summary does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all of the provisions of the applicable deposit agreement and related depositary
receipts.

GENERAL

         We may issue depositary receipts for depositary shares, each of which
will represent a fractional interest of a share of a particular series of our
preferred stock, as specified in the applicable prospectus supplement. Shares of
preferred stock of each series represented by depositary shares will be
deposited under a separate deposit agreement between the entity named as
depositary in the deposit agreement and us. Subject to the terms of the deposit
agreement, each owner of a depositary receipt will be entitled, in proportion to
the fractional interest of a share of a particular series of preferred stock
represented by the depositary shares evidenced by that depositary receipt, to
all the rights and preferences of the preferred stock represented by those
depositary shares, including dividend, voting, conversion, redemption and
liquidation rights.

         The depositary shares will be evidenced by depositary receipts issued
pursuant to the applicable deposit agreement. Immediately following the issuance
and delivery of our preferred stock to the depositary, we will cause the
depositary to issue, on our behalf, depositary receipts evidencing the
depository shares. Copies of the applicable form of deposit agreement and
depositary receipt may be obtained from us upon request, and the statements made
in this summary relating to the deposit agreement and the depositary receipts to
be issued under the deposit agreement are summaries of provisions of the deposit
agreement and the related depositary receipts.

DIVIDENDS AND OTHER DISTRIBUTIONS

         The depositary will distribute all cash dividends or other cash
distributions received in respect of the preferred stock to the record holders
of depositary receipts evidencing the related depositary shares in proportion to
the number of such depositary receipts owned by such holders, subject to the
obligations of holders to file proofs, certificates and other information and to
pay some charges and expenses to the depositary.

         In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary receipts
entitled to that property, subject to the obligations of holders to file proofs,
certificates and other information and to pay some charges and expenses to the
depositary, unless the depositary determines that it is not feasible to make the
distribution, in which case the depositary may, with our approval, sell the
property and distribute the net proceeds from the sale to the holders.

         No distribution will be made in respect of any depositary share to the
extent that it represents any preferred stock converted into other securities.

WITHDRAWAL OF PREFERRED STOCK

         Upon surrender of the depositary receipts at the corporate trust office
of the depositary, unless the related depositary shares have previously been
called for redemption or converted into other securities, the holders of those
depositary receipts will be entitled to delivery at the corporate trust office,
to or upon the holder's order, of the number of whole or fractional shares of
the preferred stock and any money or other property represented by the
depositary shares evidenced by the depositary receipts. Holders of depositary
receipts will be entitled to receive whole or fractional shares of the related
preferred stock on the basis of the proportion of preferred stock represented by
the depositary share as specified in the applicable prospectus supplement, but
holders of the shares of preferred stock will not thereafter be entitled to
receive depositary shares therefor. If the depositary receipts delivered by the
holder evidence a number of depositary shares in excess of the number of
depositary shares representing the number of shares of preferred stock to be
withdrawn, the depositary will deliver to the holder at the same time a new
depositary receipt evidencing the excess number of depositary shares.



                                      -13-
<PAGE>   22


REDEMPTION OF DEPOSITARY SHARES

         Whenever we redeem shares of preferred stock held by the depositary,
the depositary will redeem, as of the same redemption date, the number of
depositary shares representing shares of the preferred stock so redeemed,
provided we have paid in full to the depositary the redemption price of the
preferred stock to be redeemed plus an amount equal to any accrued and unpaid
dividends thereon to the date fixed for redemption. The redemption price per
depositary share will be equal to the corresponding proportion of the redemption
price and any other amounts per share payable with respect to the preferred
stock. If fewer than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected pro rata, as nearly as may be
practicable without creating fractional depositary shares, or by another
equitable method.

         From and after the date fixed for redemption, all dividends in respect
of the shares of preferred stock called for redemption will cease to accrue, the
depositary shares called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the depositary receipts evidencing
the depositary shares called for redemption will cease, except the right to
receive any moneys payable upon the redemption and any money or other property
to which the holders of the depositary receipts were entitled upon the
redemption and surrender thereof to the depositary.

VOTING OF THE PREFERRED STOCK

         Upon receipt of notice of any meeting at which the holders of the class
of preferred stock deposited with the depositary are entitled to vote, the
depositary will mail the information contained in the notice of meeting to the
record holders of the depositary receipts evidencing the depositary shares which
represent such preferred stock. Each record holder of depositary receipts
evidencing depositary shares on the record date, which will be the same date as
the record date for the preferred stock, will be entitled to instruct the
depositary as to the exercise of the voting rights pertaining to the amount of
preferred stock represented by the holder's depositary shares. The depositary
will vote the amount of preferred stock represented by the depositary shares in
accordance with the instructions, and we will agree to take all reasonable
action which may be deemed necessary by the depositary in order to enable the
depositary to do so. The depositary will abstain from voting the amount of
preferred stock represented by the depositary shares to the extent it does not
receive specific instructions from the holders of depositary receipts evidencing
the depositary shares. The depositary shall not be responsible for any failure
to carry out any instruction to vote, or for the manner or effect of any such
vote made, as long as such action or non-action is in good faith and does not
result from negligence or willful misconduct of the depositary.

LIQUIDATION PREFERENCE

         In the event of our liquidation, dissolution or winding up, whether
voluntary or involuntary, the holders of each depositary receipt will be
entitled to the fraction of the liquidation preference accorded each share of
preferred stock represented by the depositary shares evidenced by such
depositary receipt, as set forth in the applicable prospectus supplement.

CONVERSION OF PREFERRED STOCK

         The depositary shares, as such, are not convertible into either our
Class A or our Class B common stock or any of our other securities or property.
Nevertheless, if specified in the applicable prospectus supplement relating to
an offering of depositary shares, the depositary receipts may be surrendered by
their holders to the depositary with written instructions to the depositary to
instruct us to cause conversion of the preferred stock represented by the
depositary shares evidenced by the depositary receipts into whole shares of our
Class A common stock, other shares of our preferred stock or other of our equity
or debt securities, and we have agreed that upon receipt of those instructions
and any amounts payable in respect thereof, we will cause the conversion thereof
utilizing the same procedures as those provided for delivery of preferred stock
to effect such conversion. If the depositary shares evidenced by a depositary
receipt are to be converted in part only, a new depositary receipt or receipts
will be issued for any depositary shares not to be converted. No fractional
shares of Class A common stock will be issued upon conversion, and if such
conversion would result in a fractional share being issued, we will pay an
amount in cash equal to the value of the fractional interest based upon the
average of the closing prices of the Class A common stock for a specified period
of time prior to the conversion.



                                      -14-
<PAGE>   23


AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT

         The form of depositary receipt evidencing the depositary shares which
represent the preferred stock and any provision of the deposit agreement may at
any time be amended by agreement between the depositary and us. However, any
amendment that materially and adversely alters the rights of the holders of
depositary receipts or that would be materially and adversely inconsistent with
the rights granted to the holders of the related preferred stock will not be
effective unless such amendment has been approved by the existing holders of at
least a majority of the depositary shares evidenced by the depositary receipts
then outstanding. No amendment shall impair the right, subject to certain
exceptions in the deposit agreement, of any holder of depositary receipts to
surrender any depositary receipt with instructions to deliver to the holder the
related preferred stock and all money and other property, if any, represented
thereby, except in order to comply with law. Every holder of an outstanding
depositary receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold such receipt, to consent and agree to such
amendment and to be bound by the deposit agreement as amended thereby.

         Unless specified otherwise in the applicable prospectus supplement, we
may terminate the deposit agreement upon not less than 30 days' prior written
notice to the depositary if a majority of each class of depositary shares
affected by such termination consents, whereupon the depositary shall deliver or
make available to each holder of depositary receipts, upon surrender of the
depositary receipts held by such holder, such number of whole or fractional
shares of preferred stock as are represented by the depositary shares evidenced
by such depositary receipts together with any other property held by the
depositary with respect to such depositary receipt. In addition, the deposit
agreement will automatically terminate if:

         o        all outstanding depositary shares shall have been redeemed

         o        there shall have been a final distribution in respect of the
                  related preferred stock in connection with any liquidation,
                  dissolution or winding up of our company and such distribution
                  shall have been distributed to the holders of depositary
                  receipts evidencing the depositary shares representing such
                  preferred stock

         o        each share of the related preferred stock shall have been
                  converted into our securities not represented by depositary
                  shares

CHARGES OF PREFERRED STOCK DEPOSITARY

         We will pay all transfer and other taxes and governmental charges
arising solely from the existence of the deposit agreement. In addition, we will
pay the fees and expenses of the depositary in connection with the performance
of its duties under the deposit agreement. However, holders of depositary
receipts will pay the fees and expenses of the depositary for any duties
requested by such holders to be performed which are outside of those expressly
provided for in the deposit agreement.

MISCELLANEOUS

         The depositary will forward to holders of depositary receipts any
reports and communications from us which are received by the depositary with
respect to the related preferred stock.

         Unless specified otherwise in the applicable prospectus supplement,
neither we nor the depositary will be liable if either of us is prevented from
or delayed in, by law or any circumstances beyond its control, performing its
obligations under the deposit agreement. The obligations of the depositary and
our company under the deposit agreement will be limited to performing their
duties thereunder in good faith and without negligence, in the case of any
action or inaction in the voting of preferred stock represented by the
depositary shares, gross negligence or willful misconduct, and we and the
depositary will not be obligated to prosecute or defend any legal proceeding in
respect of any depositary receipts, depositary shares or shares of preferred
stock represented thereby unless satisfactory indemnity is furnished. We and the
depositary may rely on written advice of counsel or accountants, or information
provided by persons presenting shares of preferred stock represented thereby for
deposit, holders of



                                      -15-
<PAGE>   24


depositary receipts or other persons believed in good faith to be competent to
give such information, and on documents believed in good faith to be genuine and
signed by a proper party.

         In the event the depositary shall receive conflicting claims, requests
or instructions from any holders of depositary receipts, on the one hand, and
us, on the other hand, the depositary shall be entitled to act on such claims,
requests or instructions received from us.



                                      -16-
<PAGE>   25


                         DESCRIPTION OF DEBT SECURITIES

GENERAL

         The debt securities will constitute senior, senior subordinated or
subordinated debt of WCG. In this description of the debt securities, the term
"WCG" refers to Williams Communications Group, Inc. and does not include its
subsidiaries, except for purposes of financial data determined on a consolidated
basis. We will issue debt securities under a debt indenture between WCG and The
Bank of New York, as trustee. This prospectus refers to The Bank of New York as
the trustee. We have filed the form of the indenture as an exhibit to the
registration statement of which this prospectus is a part.

         THE FOLLOWING DESCRIPTION IS A SUMMARY OF THE MATERIAL PROVISIONS OF
THE INDENTURE. IT DOES NOT RESTATE THE INDENTURE IN ITS ENTIRETY. THE INDENTURE
IS GOVERNED BY THE TRUST INDENTURE ACT OF 1939. THE TERMS OF THE DEBT SECURITIES
INCLUDE THOSE STATED IN THE INDENTURE AND THOSE MADE PART OF THE INDENTURE BY
REFERENCE TO THE TRUST INDENTURE ACT. WE URGE YOU TO READ THE INDENTURE BECAUSE
IT, AND NOT THIS DESCRIPTION, DEFINES YOUR RIGHTS AS A HOLDER OF THE DEBT
SECURITIES. Wherever this prospectus refers to particular sections or defined
terms of the indenture, these sections or defined terms are incorporated by
reference in this prospectus as part of the statement made, and the statement is
qualified in its entirety by such reference. The indenture contains no covenant
or provision which affords debt holders protection in the event of a highly
leveraged transaction.

         WCG's subsidiaries will have no direct obligation to pay amounts due on
the debt securities. The debt securities effectively will be subordinated to all
existing and future indebtedness and other liabilities of WCG's subsidiaries,
including trade payables and indebtedness to Williams, our credit facility and
our asset defeasance program. Such indebtedness would effectively rank senior to
the debt securities. The indenture permits WCG and its subsidiaries to incur
substantial amounts of additional indebtedness and other liabilities. Any rights
of WCG and its creditors, including the holders of debt securities, to
participate in the assets of any of WCG's subsidiaries upon any liquidation or
reorganization of any such subsidiary will be subject to the prior claims of
that subsidiary's creditors, including trade creditors.

INFORMATION YOU WILL FIND IN THE PROSPECTUS SUPPLEMENT

         The indenture provides that we may issue debt securities from time to
time in one or more series and that we may denominate the debt securities and
make them payable in foreign currencies. The prospectus supplement will provide
information relating to the terms of the debt securities being offered, which
may include:

         o        classification as senior or subordinated debt securities

         o        ranking of the specific series of debt securities relative to
                  other outstanding indebtedness, including subsidiary debt

         o        if the debt securities are subordinated, the aggregate amount
                  of outstanding indebtedness, as of a recent date, that is
                  senior to the subordinated securities, and any limitation on
                  the issuance of additional senior indebtedness

         o        the specific designation, aggregate principal amount, purchase
                  price and denomination of such debt securities

         o        whether the debt securities are convertible or exchangeable
                  and on what terms

         o        currency or units based on or relating to currencies in which
                  the debt securities are denominated and/or in which principal,
                  premium, if any, and/or any interest will or may be payable

         o        maturity date

         o        interest rate or rates, if any, or the method by which the
                  rate will be determined



                                      -17-
<PAGE>   26


         o        the dates on which any interest will be payable

         o        the place or places where the principal of and interest, if
                  any, on the debt securities will be payable

         o        any redemption or sinking fund provisions

         o        whether the debt securities will be issuable in registered or
                  bearer form or both and, if debt securities in bearer form are
                  issuable, restrictions applicable to the exchange of one form
                  for another and to the offer, sale, and delivery of debt
                  securities in bearer form

         o        any applicable United States federal income tax consequences,
                  including whether and under what circumstances we will pay
                  additional amounts on debt securities held by a person who is
                  not a U.S. person, as defined in the prospectus supplement, in
                  respect of any tax, assessment, or governmental charge
                  withheld or deducted, and if so, whether we will have the
                  option to redeem the debt securities rather than pay the
                  additional amounts

         o        any other specific terms of the debt securities, including any
                  additional events of default or covenants with respect to the
                  debt securities

         Holders of debt securities may present debt securities for exchange in
the manner, at the places, and subject to the restrictions set forth in the debt
securities and the prospectus supplement. Holders of registered debt securities
may present debt securities for transfer in the manner, at the places, and
subject to the restrictions set forth in the debt securities and the prospectus
supplement. We will provide these services without charge, other than any tax or
other governmental charge payable in connection therewith, but subject to the
limitations provided in the indenture. Debt securities in bearer form and the
coupons, if any, appertaining thereto will be transferable by delivery.

SENIOR DEBT

         We will issue the senior debt securities under the indenture and any
coupons that will constitute part of the senior debt of WCG. The senior debt
securities will be senior unsecured obligations of WCG, ranking equally with all
of WCG's existing and future senior unsecured debt. The senior debt securities
will be senior to all of WCG's subordinated debt and junior to any secured debt
WCG may incur as to the assets securing such debt. Substantially all the
operations of WCG are conducted through its subsidiaries and, therefore, WCG is
dependent upon cash flow from those entities to meet its obligations. The
payment of dividends and the making of loans and advances to WCG by its
subsidiaries are subject to various restrictions. Future debt of certain of
WCG's subsidiaries may prohibit the payment of dividends or the making of loans
or advances to WCG. In addition, the ability of subsidiaries of WCG to make such
payments, loans or advances to WCG is limited by the laws of the relevant
jurisdictions in which such subsidiaries are organized or located. In some
cases, the prior or subsequent approval of such payments, loans or advances by
such subsidiaries to WCG may be required from applicable regulatory bodies or
other governmental entities.

SUBORDINATED DEBT

         We will issue the subordinated debt securities under the indenture and
any coupons that will constitute part of the subordinated debt of WCG. These
subordinated debt securities will be subordinate and junior in right of payment,
to the extent and in the manner set forth in the indenture, to all "senior
indebtedness" of WCG. The indenture defines "senior indebtedness" as obligations
of, or guaranteed or assumed by, WCG for borrowed money or evidenced by bonds,
debentures, notes or other similar instruments, and amendments, renewals,
extensions, modifications and refundings of any such indebtedness or obligation.
"Senior indebtedness" does not include nonrecourse obligations, the subordinated
debt securities, including senior subordinated debt securities, or any other
obligations specifically designated as being subordinate in right of payment to
senior indebtedness.

         In general, the holders of all senior indebtedness are entitled to
receive payment of the full amount unpaid on senior indebtedness before the
holders of any of the subordinated debt securities or coupons are entitled to



                                      -18-
<PAGE>   27


receive a payment on account of the principal or interest on the indebtedness
evidenced by the subordinated debt securities in certain events. These events
include:

         o        any insolvency or bankruptcy proceedings, or any receivership,
                  liquidation, reorganization or other similar proceedings which
                  concern us or a substantial part of our property

         o        a default having occurred for the payment of principal,
                  premium, if any, or interest on or other monetary amounts due
                  and payable on any senior indebtedness or any other default
                  having occurred concerning any senior indebtedness, which
                  permits the holder or holders of any senior indebtedness to
                  accelerate the maturity of any senior indebtedness with notice
                  or lapse of time, or both; this type of an event of default
                  must have continued beyond the period of grace, if any,
                  provided for this type of an event of default under the senior
                  indebtedness, and this type of an event of default shall not
                  have been cured or waived or shall not have ceased to exist

         o        the principal of, and accrued interest on, any series of the
                  subordinated debt securities having been declared due and
                  payable upon an event of default contained in the indenture;
                  this declaration must not have been rescinded and annulled as
                  provided in the indenture

         If this prospectus is being delivered in connection with a series of
subordinated debt securities, the accompanying prospectus supplement or the
information incorporated in this prospectus by reference will set forth the
approximate amount of senior indebtedness outstanding as of the end of the most
recent fiscal quarter.

SENIOR SUBORDINATED DEBT

         We will issue the senior subordinated debt securities under the
indenture and any coupons that will constitute part of the senior subordinated
debt of WCG. These senior subordinated debt securities will be, to the extent
and in the manner set forth in the indenture, subordinate and junior in right of
payment to all "senior indebtedness" of WCG and senior to other subordinate debt
of WCG. See the discussions above under "--Senior debt" and "--Subordinated
debt" for a more detailed explanation of WCG's senior and subordinated
indebtedness.

INTEREST RATE

         Debt securities that bear interest will do so at a fixed rate or a
floating rate. We will sell, at a discount below the stated principal amount,
any debt securities which bear no interest or which bear interest at a rate that
at the time of issuance is below the prevailing market rate.

         The relevant prospectus supplement will describe the special United
States federal income tax considerations applicable to:

         o        any discounted debt securities

         o        any debt securities issued at par which are treated as having
                  been issued at a discount for United States federal income tax
                  purposes

REGISTERED GLOBAL SECURITIES

GENERAL

         WCG may issue registered debt securities of a series in the form of one
or more fully registered global securities. WCG will deposit the registered
global security with a depositary or with a nominee for a depositary identified
in the prospectus supplement relating to such series. WCG will then issue one or
more registered global securities in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of outstanding registered
debt securities of the series to be represented by the registered global
security or securities. Unless and until it is exchanged in whole or in part for
debt securities in definitive registered form, a registered global security may
not be transferred, except as a whole in three cases:



                                      -19-
<PAGE>   28


         o        by the depositary for the registered global security to a
                  nominee of the depositary

         o        by a nominee of the depositary to the depositary or another
                  nominee of the depositary

         o        by the depositary or any nominee to a successor of the
                  depositary or a nominee of the successor

         The prospectus supplement relating to a series of debt securities will
describe the specific terms of the depositary arrangement concerning any portion
of the debt securities to be represented by a registered global security. WCG
anticipates that the following provisions will apply to all depositary
arrangements.

         Upon the issuance of a registered global security, the depositary will
credit, on its book-entry registration and transfer system, the principal
amounts of the debt securities represented by the registered global security to
the accounts of persons that have accounts with the depositary. These persons
are referred to as "participants." Any underwriters or agents participating in
the distribution of debt securities represented by the registered global
security will designate the accounts to be credited. Only participants or
persons that hold interests through participants will be able to beneficially
own interests in a registered global security. The depositary for a global
security will maintain records of beneficial ownership interests in a registered
global security for participants. Participants or persons that hold through
participants will maintain records of beneficial ownership interests in a global
security for persons other than participants. These records will be the only
means to transfer beneficial ownership in a registered global security.

         So long as the depositary, or its nominee, is the registered owner of a
registered global security, the depositary or its nominee will be considered the
sole owner or holder of the debt securities represented by the registered global
security for all purposes under the indenture. Except as set forth below, owners
of beneficial interests in a registered global security:

         o        may not have the debt securities represented by a registered
                  global security registered in their names

         o        will not receive or be entitled to receive physical delivery
                  of debt securities represented by a registered global security
                  in definitive form

         o        will not be considered the owners or holders of debt
                  securities represented by a registered global security under
                  the indenture

PAYMENT OF INTEREST ON AND PRINCIPAL OF REGISTERED GLOBAL SECURITIES

         WCG will make principal, premium, if any, and interest payments on debt
securities represented by a registered global security registered in the name of
a depositary or its nominee to the depositary or its nominee as the registered
owner of the registered global security. None of WCG, the trustee, or any paying
agent for debt securities represented by a registered global security will have
any responsibility or liability for:

         o        any aspect of the records relating to, or payments made on
                  account of, beneficial ownership interests in such registered
                  global security

         o        maintaining, supervising, or reviewing any records relating to
                  beneficial ownership interests

         WCG expects that the depositary, upon receipt of any payment of
principal, premium or interest, will immediately credit participants' accounts
with payments in amounts proportionate to their beneficial interests in the
principal amount of a registered global security as shown on the depositary's
records. WCG also expects that payments by participants to owners of beneficial
interests in a registered global security held through participants will be
governed by standing instructions and customary practices. This is currently the
case with the securities held for the accounts of customers registered in
"street name." WCG also expects that this payout will be the responsibility of
participants.



                                      -20-
<PAGE>   29


EXCHANGE OF REGISTERED GLOBAL SECURITIES

         WCG will issue debt securities in definitive form in exchange for the
registered global security if both of the following occur

         o        the depositary for any debt securities represented by a
                  registered global security is at any time unwilling or unable
                  to continue as depositary or ceases to be a clearing agency
                  registered under the Securities Exchange Act of 1934

         o        WCG does not appoint a successor depositary within 90 days

         In addition, WCG may, at any time, determine not to have any of the
debt securities of a series represented by one or more registered global
securities. In this event, WCG will issue debt securities of a series in
definitive form in exchange for all of the registered global security or
securities representing these debt securities.

COVENANTS BY WCG

          The indenture includes covenants by WCG, including among other things
that WCG will make all payments of principal and interest at the times and
places required. WCG expects that the supplemental indenture with respect to
each series of debt securities may contain additional covenants, including
covenants which restrict the right of WCG and its subsidiaries to incur
additional indebtedness and to take certain actions with respect to their
respective businesses and assets.

EVENTS OF DEFAULT

          Unless otherwise indicated in the applicable prospectus supplement,
the following will be events of default under the indenture:

          (a) failure to pay when due any interest on any debt security issued
     under the indenture, continued for 30 days;

          (b) failure to pay when due principal of, or premium, if any, on, any
     debt security issued under the indenture;

          (c) default in the payment of any sinking fund installment when due
     and payable;

          (d) failure to perform any other covenant or agreement of WCG under
     the indenture or the debt securities, continued for 60 days after written
     notice to WCG by the trustee or holders of at least 25% in aggregate
     principal amount of the series of outstanding debt securities to which the
     covenant or agreement relates;

          (e) an event of bankruptcy, insolvency or similar law affecting WCG;
     and

          (f) any other event of default specified in any supplemental indenture
     under which such debt securities are issued.

         Except as provided in the applicable prospectus supplement, if any
event of default under clause (a), (b) or (c) above shall occur and be
continuing with respect to any series of debt securities under the indenture,
either the trustee or the holders of at least 25% in aggregate principal amount
of outstanding debt securities of such series may accelerate the maturity of all
debt securities of such series.

         Except as provided in the applicable prospectus supplement, if an event
of default described in clause (d) or (f) above shall occur and be continuing
with respect to all series of senior debt securities then outstanding under the
indenture, either the trustee or the holders of at least 25% in aggregate
principal amount of all outstanding senior debt securities (treated as one
class) may accelerate the maturity of all senior debt securities then
outstanding. If an event of default described in clause (e) above occurs, the
principal amount of all outstanding senior debt securities



                                      -21-
<PAGE>   30


shall automatically become immediately due and payable without any declaration
or other act on the part of the trustee or any holder.

         Except as provided in the applicable prospectus supplement, if an event
of default described in clause (d) or (f) above shall occur and be continuing
with respect to all series of subordinated debt securities then outstanding
under the indenture, either the trustee or the holders of at least 25% in
aggregate principal amount of all outstanding subordinated debt securities
(treated as one class) may accelerate the maturity of all subordinated debt
securities then outstanding. If an event of default described in clause (e)
above occurs, the principal amount of all outstanding subordinated debt
securities shall automatically become immediately due and payable without any
declaration or other act on the part of the trustee or any holder.

         Except as provided in the applicable prospectus supplement, if an event
of default described in clause (d) or (f) above shall occur and be continuing
with respect to all series of senior subordinated debt securities then
outstanding under the indenture, either the trustee or the holders of at least
25% in aggregate principal amount of all outstanding senior subordinated debt
securities (treated as one class) may accelerate the maturity of all senior
subordinated debt securities then outstanding. If an event of default described
in clause (e) above occurs and is continuing, the principal amount of all
outstanding senior subordinated debt securities shall automatically become
immediately due and payable without any declaration or other act on the part of
the trustee or any holder.

         Except as provided in the applicable prospectus supplement, if an event
of default described in clause (d) or (f) above shall occur and be continuing
with respect to less than all series of senior debt securities then outstanding
under the indenture, either the trustee or the holders of at least 25% in
aggregate principal amount of outstanding senior debt securities of each
affected series (each such series voting as a separate class) may accelerate the
maturity of all such senior debt securities then outstanding.

         Except as provided in the applicable prospectus supplement, if an event
of default described in clause (d) or (f) above shall occur and be continuing
with respect to less than all series of subordinated debt securities then
outstanding under the indenture, either the trustee or the holders of at least
25% in aggregate principal amount of outstanding subordinated debt securities of
each affected series (each such series voting as a separate class) may
accelerate the maturity of all such subordinated debt securities then
outstanding.

         Except as provided in the applicable prospectus supplement, if an event
of default described in clause (d) or (f) above shall occur and be continuing
with respect to less than all series of senior subordinated debt securities then
outstanding under the indenture, either the trustee or the holders of at least
25% in aggregate principal amount of outstanding senior subordinated debt
securities of each affected series (each such series voting as a separate class)
may accelerate the maturity of all such senior subordinated debt securities then
outstanding.

After any such acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of each
affected series of debt securities voting as a separate class (or all the
securities, as the case may be, voting as a single class) may, under specified
circumstances, including payment of all matured installments of principal and
interest, waive all defaults with respect to such series and rescind and annul
such acceleration if all events of default, other than the non-payment of
accelerated principal, have been cured, waived or otherwise remedied.

         No holder of any debt securities will have any right to institute any
proceeding with respect to the indenture or for any remedy under the indenture,
unless such holder shall have previously given to the trustee written notice of
a continuing event of default and the holders of at least 25% in aggregate
principal amount of the outstanding debt securities of the relevant series shall
have made written request and offered indemnity satisfactory to the trustee to
institute such proceeding as trustee, and the trustee shall not have received
from the holders of a majority in aggregate principal amount of the outstanding
debt securities of such series a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days. However, such
limitations do not apply to a suit instituted by a holder of a debt security for
enforcement of payment of the principal of and premium, if any, or interest on
such debt security on or after the respective due dates expressed in such debt
security.



                                      -22-
<PAGE>   31



SUPPLEMENTAL INDENTURES

         WCG and the trustee may, at any time and from time to time, without
notice to or consent of any holders of debt securities, enter into one or more
indentures supplemental to the indenture:

         o        to secure any series of debt securities

         o        to evidence the succession of another corporation to WCG and
                  the assumption by such successor of the covenants of WCG in
                  the indenture and the debt securities

         o        to add to the covenants of WCG, for the benefit of the
                  holders, or to add any additional events of default

         o        to evidence and provide for the acceptance of appointment
                  under the indenture of a successor trustee with respect to the
                  debt securities of one or more series and to add to or change
                  any of the provision of the indenture as shall be necessary to
                  provide for or facilitate the administration of the trusts
                  under the indenture by more than one trustee

         o        to establish the terms of a series of debt securities

         o        to cure any ambiguity in the indenture, to correct or
                  supplement any provision in the indenture or any supplemental
                  indenture which may be defective or inconsistent with any
                  other provision herein or therein or to add any other
                  provision which WCG may deem necessary or appropriate;

provided such actions shall not adversely affect the interests of the holders in
any material respect

         With the consent of the holders of at least a majority in principal
amount of outstanding senior debt securities of all series affected by such
supplemental indenture (voting as one class), WCG and the trustee may enter into
one or more supplemental indentures for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the indenture
or modifying in any manner the rights of the holders of debt securities of each
such series.

         With the consent of the holders of at least a majority in principal
amount of outstanding subordinated debt securities of all series affected by
such supplemental indenture (voting as one class), WCG and the trustee may enter
into one or more supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the indenture or modifying in any manner the rights of the holders of debt
securities of each such series.

         With the consent of the holders of at least a majority in principal
amount of outstanding senior subordinated debt securities of all series affected
by such supplemental indenture (voting as one class), WCG and the trustee may
enter into one or more supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the indenture or modifying in any manner the rights of the holders of debt
securities of each such series.

         Notwithstanding the rights of WCG and the trustee to enter into one or
more supplemental indentures with the consent of the holders of debt securities
of the affected series, as described above, no such supplemental indenture
shall, without the consent of the holder of each outstanding debt security of
the affected series, among other things:

         o        extend the final maturity of the principal of, or any
                  installment of interest on, any debt securities , or reduce
                  the principal amount of any debt securities or the interest on
                  any debt securities that would be due and payable upon the
                  final maturity of any debt securities, or change the place of
                  payment where, or the coin or currency in which, any debt
                  securities or any premium or interest on any debt securities
                  is payable, or impair the right to institute suit for the
                  enforcement of any such payment when due on any debt security



                                      -23-
<PAGE>   32


         o        reduce the percentage in principal amount of the outstanding
                  debt securities, the consent of whose holders is necessary for
                  any such supplemental indenture

         o        reduce any amount payable upon the redemption of any debt
                  securities or change the time at which any debt security may
                  be redeemed

SATISFACTION AND DISCHARGE OF THE INDENTURE, DEFEASANCE

         WCG, at its election, shall:

         (a) be deemed to have paid and discharged its debt on the debt
     securities, and the indenture shall cease to be of further effect as to all
     such outstanding debt securities, except as to

         o        rights of registration of transfer, substitution and exchange
                  of debt securities,

         o        rights of holders to receive payment of principal of, premium,
                  if any, and interest on such debt securities,

         o        WCG's right of optional redemption,

         o        the rights, obligations, duties and immunities of the trustee
                  under the indenture, and

         o        certain other specified provisions in the indenture; and

          (b) cease to be under any obligation to comply with certain
     restrictive covenants;

     upon the irrevocable deposit by WCG with the trustee, in trust for the
     benefit of the holders of such debt securities, at any time prior to
                    the maturity of such debt securities, of

         o        money in an amount

         o        government securities which through the payment of interest
                  and principal will provide money in an amount or

         o        a combination thereof

sufficient to pay and discharge the principal of, premium, if any, on, and
accrued interest on, the debt securities then outstanding on the dates on which
any such payments are due in accordance with the terms of the indenture and of
such debt securities.

         Such defeasance or covenant defeasance shall be deemed to occur only if
certain conditions are satisfied, including among other things, delivery by WCG
to the trustee of an opinion of counsel acceptable to the trustee to the effect
that, among other things, such deposit, defeasance and discharge will not be
deemed, or result in, a taxable event for federal income tax purposes with
respect to the holders (which opinion, in the case of defeasance described in
clause (a) above, must be based on a ruling of the Internal Revenue Service to
the same effect unless there has been a change in law after the date of the
indentures such that a ruling is no longer required).

MERGERS, CONSOLIDATIONS AND CERTAIN SALES OF ASSETS

         WCG may not

         o        consolidate with or merge into any other person or entity or
                  permit any other person or entity to consolidate with or merge
                  into WCG



                                      -24-
<PAGE>   33


         o        transfer, lease or dispose of all or substantially all its
                  assets to any other person or entity

unless:

         o        in a transaction in which WCG is not the resulting, surviving
                  or transferee person or entity in which WCG transfers, sells,
                  leases, conveys or otherwise disposes of all or substantially
                  all of its assets to any other person or entity, the
                  resulting, surviving or transferee person or entity is
                  organized under the laws of the United States of America or
                  any state thereof or the District of Columbia and expressly
                  assumes, by supplemental indentures executed and delivered to
                  the trustee in form satisfactory to the trustee, all of WCG's
                  obligations under the indentures

         o        immediately before and after giving effect to such transaction
                  and treating any indebtedness which becomes an obligation of
                  WCG or a subsidiary as a result of such transaction as having
                  been incurred by WCG or such subsidiary at the time of the
                  transaction, no event of default, and no event which, after
                  notice or lapse of time or both, would become an event of
                  default, shall have occurred and be continuing

GOVERNING LAW

         The indenture and the debt securities will be governed by the laws of
the State of New York, without reference to principles of conflicts of law.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

         No director, officer, incorporator or stockholder of WCG, as such,
shall have any liability for any obligations of WCG under the debt securities or
the indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation, solely by reason of its status as director,
officer, incorporator or stockholder of WCG. By accepting a debt security, each
holder waives and releases all such liability, but only such liability. The
waiver and release are part of the consideration for issuance of the debt
securities. Nevertheless, such waiver may not be effective to waive liabilities
under the federal securities laws and it has been the view of the SEC that such
a waiver is against public policy.

CONVERSION OR EXCHANGE RIGHTS

         Any debt securities offered hereby may be convertible into or
exchangeable for shares of WCG's equity securities. The terms and conditions of
such conversion or exchange will be set forth in the applicable prospectus
supplement. Such terms may include, among others, the following:

         o        the conversion or exchange price

         o        the conversion or exchange period

         o        provisions regarding WCG's ability or that of the holder to
                  convert or exchange the debt securities

         o        events requiring adjustment to the conversion or exchange
                  price

         o        provisions affecting conversion or exchange in the event of
                  our redemption or such debt securities

CONCERNING THE TRUSTEE

         The indenture provides that there may be more than one trustee with
respect to one or more series of debt securities. If there are different
trustees for different series of debt securities, each trustee will be a trustee
of a trust under a supplemental indenture separate and apart from the trust
administered by any other trustee under such indenture. Except as otherwise
indicated in this prospectus or any prospectus supplement, any action permitted
to be taken by a trustee may be taken by the trustee only with respect to the
one or more series of debt securities for which



                                      -25-
<PAGE>   34


it is the trustee under an indenture. Any trustee under the indenture or a
supplemental indenture may resign or be removed with respect to one or more
series of debt securities. All payments of principal of, premium, if any, and
interest on, and all registration, transfer, exchange authentication and
delivery (including authentication and delivery on original issuance of the debt
securities) of, the debt securities of a series will be effected by the trustee
with respect to such series at an office designated by the trustee in New York,
New York.

         The indenture contains limitations on the right of the trustee, should
it become a creditor of WCG, to obtain payment of claims in certain cases or to
realize on certain property received in respect of any such claim as security or
otherwise. The trustee may engage in other transactions; however, if it acquires
any conflicting interest relating to any duties with respect to the debt
securities it must eliminate the conflict or resign as trustee.

         The initial trustee is one of a number of banks with which Williams,
WCG and subsidiaries of each maintain ordinary banking relationships and with
which WCG and its subsidiaries maintain credit facilities.

LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES

         Debt securities in bearer form are subject to special U.S. tax
requirements and may not be offered, sold, or delivered within the United States
or its possessions or to a U.S. person, except in certain transactions permitted
by U.S. tax regulations. Investors should consult the prospectus supplement in
the event that bearer debt securities are issued for special procedures and
restrictions that will apply to such an offering.





                                      -26-
<PAGE>   35


                             DESCRIPTION OF WARRANTS

GENERAL

         We may issue, together with other securities or separately, warrants to
purchase our debt securities, Class A common stock, Class B common stock,
preferred stock or depositary shares. We will issue the warrants under warrant
agreements to be entered into between us and a bank or trust company, as warrant
agent, all as shall be set forth in the applicable prospectus supplement. The
warrant agent will act solely as our agent in connection with the warrants of
the series being offered and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of warrants.

         The applicable prospectus supplement will describe the following terms,
where applicable, of warrants in respect of which this prospectus is being
delivered:

         o        the title of the warrants

         o        the designation, amount and terms of the securities for which
                  the warrants are exercisable and the procedures and conditions
                  relating to the exercise of such warrants

         o        the designation and terms of the other securities, if any,
                  with which the warrants are to be issued and the number of
                  warrants issued with such security

         o        the price or prices at which the warrants will be issued

         o        the aggregate number of warrants

         o        any provisions for adjustment of the number or amount of
                  securities receivable upon exercise of the warrants or the
                  exercise price of the warrants

         o        the price or prices at which the securities purchasable upon
                  exercise of the warrants may be purchased

         o        if applicable, the date on and after which the warrants and
                  the securities purchasable upon exercise of the warrants will
                  be separately transferable

         o        if applicable, a discussion of the material United States
                  federal income tax considerations applicable to the exercise
                  of the warrants

         o        any other terms of the warrants, including terms, procedures
                  and limitations relating to the exchange and exercise of the
                  warrants

         o        the date on which the right to exercise the warrants shall
                  commence, and the date on which the right shall expire

         o        the maximum or minimum number of warrants which may be
                  exercised at any time

         o        information with respect to book-entry procedures, if any

EXERCISE OF WARRANTS

         Each warrant will entitle the holder thereof to purchase for cash the
amount of debt securities, shares of preferred stock, shares of our Class A
common stock, shares of our Class B common stock or depositary shares at the
exercise price as shall in each case be set forth in, or be determinable as set
forth in, the applicable prospectus supplement. Warrants may be exercised at any
time up to the close of business on the expiration date set forth in the



                                      -27-
<PAGE>   36


applicable prospectus supplement. After the close of business on the expiration
date, unexercised warrants will become void.

         Warrants may be exercised as set forth in the applicable prospectus
supplement relating to the warrants offered thereby. Upon receipt of payment and
the warrant certificate properly completed and duly executed at the corporate
trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement, we will, as soon as practicable, forward the
purchased securities. If less than all of the warrants represented by the
warrant certificate are exercised, a new warrant certificate will be issued for
the remaining warrants.



                                      -28-
<PAGE>   37


        DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS

         We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and obligating us to sell to the holders, a
specified number of shares of our Class A common stock, our Class B common stock
or our preferred stock at a future date or dates. The price per share of Class A
common stock, Class B common stock or preferred stock may be fixed at the time
the stock purchase contracts are issued or may be determined by a specific
reference to a formula set forth in the stock purchase contracts. The stock
purchase contracts may be issued separately or as part of stock purchase units
consisting of (1) a stock purchase contract and (2) debt securities, preferred
securities or debt obligations of third parties, including U.S. Treasury
securities, securing the holders' obligations to purchase our Class A common
stock, our Class B common stock or the preferred stock under the stock purchase
contracts. The stock purchase contracts may require us to make periodic payments
to the holders of the stock purchase units or vice versa, and such payments may
be unsecured or prefunded on some basis. The stock purchase contracts may
require holders to secure their obligations thereunder in a specified manner.

         Unless otherwise specified in the applicable prospectus supplement, the
securities related to the stock purchase contracts will be pledged to a
collateral agent, for our benefit, pursuant to a pledge agreement. The pledged
securities will secure the obligations of holders of stock purchase contracts to
purchase shares of our Class A common stock, our Class B common stock or our
preferred stock under the related stock purchase contracts. The rights of
holders of stock purchase contracts to the related pledged securities will be
subject to our security interest in those pledged securities. That security
interest will be created by the pledge agreement. No holder of stock purchase
contracts will be permitted to withdraw the pledged securities related to such
stock purchase contracts from the pledge arrangement except upon the termination
or early settlement of the related stock purchase contracts. Subject to that
security interest and the terms of the purchase contract agreement and the
pledge agreement, each holder of a stock purchase contract will retain full
beneficial ownership of the related pledged securities.

         Except as described in the applicable prospectus supplement, the
collateral agent will, upon receipt of distributions on the pledged securities,
distribute such payments to us or a purchase contract agent, as provided in the
pledge agreement. The purchase contract agent will in turn distribute payments
it receives as provided in the stock purchase contract. The applicable
prospectus supplement will describe the terms of any stock purchase contracts or
stock purchase units.




                                      -29-
<PAGE>   38


                       DESCRIPTION OF SUBSCRIPTION RIGHTS

GENERAL

         We may issue subscription rights to purchase our debt securities, our
Class A common stock, our Class B common stock, our preferred stock, depositary
shares or warrants to purchase debt securities, Class A common stock, Class B
common stock, preferred stock or depositary shares. We may issue subscription
rights independently or together with any other offered security. The
subscription rights may or may not be transferable by the purchaser receiving
the subscription rights. In connection with any subscription rights offering to
our stockholders, we may enter into a standby underwriting arrangement with one
or more underwriters pursuant to which the underwriter(s) will purchase any
offered securities remaining unsubscribed for after the subscription rights
offering. In connection with a subscription rights offering to our stockholders,
certificates evidencing the subscription rights and a prospectus supplement will
be distributed to our stockholders on the record date for receiving subscription
rights in the subscription rights offering set by us.

         The applicable prospectus supplement will describe the following terms
of subscription rights in respect of which this prospectus is being delivered:

         o        the title of the subscription rights

         o        the securities for which the subscription rights are
                  exercisable

         o        the exercise price for the subscription rights

         o        the number of subscription rights issued to each stockholder

         o        the extent to which the subscription rights are transferable

         o        if applicable, a discussion of the material United States
                  federal income tax considerations applicable to the issuance
                  or exercise of the subscription rights

         o        any other terms of the subscription rights, including terms,
                  procedures and limitations relating to the exchange and
                  exercise of the subscription rights

         o        the date on which the right to exercise the subscription
                  rights shall commence, and the date on which the right shall
                  expire

         o        the extent to which the subscription rights include an
                  over-subscription privilege with respect to unsubscribed
                  securities

         o        if applicable, the material terms of any standby underwriting
                  arrangement entered into by us in connection with the
                  subscription rights offering

EXERCISE OF SUBSCRIPTION RIGHTS

         Each subscription right will entitle the holder of subscription rights
to purchase for cash the principal amount of debt securities, shares of a
designated series of our preferred stock, depositary shares, our Class A common
stock, our Class B common stock, warrants or any combination thereof, at the
exercise price as shall in each case be set forth in, or be determinable as set
forth in, the applicable prospectus supplement. Subscription rights may be
exercised at any time up to the close of business on the expiration date for
such subscription rights set forth in the applicable prospectus supplement.
After the close of business on the expiration date, all unexercised subscription
rights will become void.

         Subscription rights may be exercised as set forth in the applicable
prospectus supplement. Upon receipt of payment and the subscription rights
certificate properly completed and duly executed at the corporate trust office



                                      -30-
<PAGE>   39


of the subscription rights agent or any other office indicated in the prospectus
supplement, we will, as soon as practicable, forward the debt securities, shares
of a designated series of our preferred stock, our Class A common stock or our
Class B common stock, depositary shares or warrants purchasable upon such
exercise. In the event that not all of the subscription rights issued in any
offering are exercised, we may determine to offer any unsubscribed offered
securities directly to persons other than stockholders, to or through agents,
underwriters or dealers or through a combination of such methods, including
pursuant to standby underwriting arrangements, as set forth in the applicable
prospectus supplement.





                                      -31-
<PAGE>   40


                              PLAN OF DISTRIBUTION

         We may sell the securities through agents, through underwriters,
through dealers, and directly to purchasers.

         Agents designated by us from time to time may solicit offers to
purchase the securities. The prospectus supplement will name any such agent who
may be deemed to be an underwriter, as that term is defined in the Securities
Act, involved in the offer or sale of the securities in respect of which this
prospectus is delivered. The prospectus supplement will also set forth any
commissions payable by us to such agent. Unless otherwise indicated in the
prospectus supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.

         If we use any underwriters in the sale, we will enter into an
underwriting agreement with the underwriters at the time of sale to them. The
prospectus supplement which the underwriter will use to make resales to the
public of the securities in respect of which this prospectus is delivered will
set forth the names of the underwriters and the terms of the transaction.

         If a dealer is utilized in the sale of the securities in respect of
which this prospectus is delivered, we will sell the securities to the dealer,
as principal. The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale.

         Agents, dealers and underwriters may be entitled under agreements
entered into with us to indemnification by us against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which such agents, dealers or underwriters may be required to make
in respect of such civil liabilities. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for us in the
ordinary course of business.

         One or more firms, referred to as "remarketing firms," may also offer
or sell the securities, if the prospectus supplement so indicates, in connection
with a remarketing arrangement upon their purchase. Remarketing firms will act
as principals for their own accounts or as agents for us. These remarketing
firms will offer or sell the securities in accordance with a redemption or
repayment pursuant to the terms of the securities. The prospectus supplement
will identify any remarketing firm and the terms of its agreement, if any, with
us and will describe the remarketing firm's compensation. Remarketing firms may
be deemed to be underwriters in connection with the securities they remarket.
Remarketing firms may be entitled under agreements that may be entered into with
us to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for us in the ordinary course of business.

         If the prospectus supplement so indicates, we will authorize agents and
underwriters or dealers to solicit offers by certain purchasers to purchase the
securities from us at the public offering price set forth in the prospectus
supplement. The solicitation will occur pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. These
contracts will be subject to only those conditions set forth in the prospectus
supplement, and the prospectus supplement will set forth the commission payable
for solicitation of such offers.

         Other than our Class A common stock, which is listed on the New York
Stock Exchange, and our Class B common stock, each series of securities offered
hereunder will be a new issue of securities and will have no established trading
market. The debt securities offered may or may not be listed on a national
securities exchange. We cannot be sure as to the liquidity of or the existence
of trading markets for any debt securities offered. Any underwriters to whom
securities are sold by us for public offering and sale may make a market in the
securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. Certain persons
participating in this offering may engage in transactions that stabilize,
maintain or otherwise affect the price of the securities. Specifically, the
underwriters, if any, may overallot in connection with the offering, and may bid
for, and purchase, the securities in the open market.




                                      -32-
<PAGE>   41


                                  LEGAL MATTERS

         The validity of the securities offered in this prospectus and certain
legal matters in connection with this offering will be passed upon for us by
William G. von Glahn, Senior Vice President, Law, of Williams and special
counsel to us. Certain legal matters in connection with this offering will be
passed upon by our special counsel, Conner & Winters, A Professional
Corporation. Conner & Winters has from time to time represented, and may
continue to represent, Williams and its affiliates in certain legal matters. As
of October 31, 2000, Mr. von Glahn owns, directly or indirectly, 193,409 shares
of common stock of Williams and has the right to exercise options to purchase an
additional 135,504 shares. Mr. von Glahn also owns, directly or indirectly 303
shares of our Class A common stock and holds options to purchase 50,000 shares
of our Class A common stock.

                                     EXPERTS

         Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedules included in our Annual Report on Form 10-K/A
for the year ended December 31, 1999, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedules are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.

         Our consolidated financial statements included or incorporated by
reference in any documents filed pursuant to Section 13, 14 or 15(d) of the
Exchange Act after the date of this prospectus and prior to the termination of
the offering will be so included or incorporated by reference in reliance upon
the reports of independent auditors pertaining to such financial statements (to
the extent covered by consents filed with the Securities and Exchange
Commission) given on their authority as experts in accounting and auditing.




                                      -33-
<PAGE>   42


                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

         Set forth below are the fees and expenses payable by Williams
Communications Group, Inc. ("WCG" or the "Company"), in connection with the
offering described in this Registration Statement. All such expenses, other than
the Securities and Exchange Commission registration fee, are estimates.


<TABLE>
<S>                                                                                            <C>
Securities and Exchange Commission registration fee.......................................     $ 500,000
Printing and engraving expenses...........................................................       300,000
Accounting fees and expenses..............................................................       200,000
Legal fees and expenses...................................................................       400,000
Trustees' fees............................................................................        50,000
Fees of rating agencies...................................................................       200,000
Miscellaneous expenses....................................................................        50,000
                                                                                              ----------

                   TOTAL..................................................................    $1,700,000
</TABLE>


ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         WCG, a Delaware corporation, is empowered by Section 145 of the General
Corporation Law of the State of Delaware, subject to the procedures and
limitations stated therein, to indemnify any person against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by them in connection with any threatened, pending, or
completed action, suit, or proceeding in which such person is made party by
reason of their being or having been a director, officer, employee, or agent of
WCG. The statute provides that indemnification pursuant to its provisions is not
exclusive of other rights of indemnification to which a person may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors, or
otherwise. The charter and by-laws of WCG provide for indemnification by WCG of
its directors and officers to the fullest extent permitted by the General
Corporation Law of the State of Delaware. In addition, WCG has entered into
indemnity agreements with its directors and certain officers providing for,
among other things, the indemnification of and the advancing of expenses to such
individuals to the fullest extent permitted by law, and to the extent insurance
is maintained, for the continued coverage of such individuals.

         Policies of insurance are maintained by WCG under which the directors
and officers of WCG are insured, within the limits and subject to the
limitations of the policies, against certain expenses in connection with the
defense of actions, suits, or proceedings, and certain liabilities which might
be imposed as a result of such actions, suits or proceedings, to which they are
parties by reason of being or having been such directors or officers.




                                      II-1
<PAGE>   43



ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                                      DESCRIPTION
    ------                                      -----------
<S>                    <C>
     1          --     Form of Underwriting Agreement(1)

     4.1        --     Restated Certificate of Incorporation of the Company (filed as Exhibit 3 to the Company's
                       Quarterly Report on Form 10-Q dated November 8, 2000 (the "November 2000 10-Q"))(2)

     4.2        --     Restated By-laws of the Company (filed as Exhibit 3.2 to the Company's Current Report on
                       Form 8-K dated October 1, 1999)(2)

     4.3        --     Form of Indenture between the Company and The Bank of New York, as trustee, relating to
                       issuance from time to time of senior debt securities, subordinate debt securities and
                       senior subordinate debt securities

     4.4        --     Form of Debt Security (included in Exhibit 4.3)

     4.5        --     Specimen certificate of Class A common stock (filed as Exhibit 4.1 to Registration
                       Statement No. 333-76007 on Form S-1 relating to an equity offering (the "Equity
                       Registration Statement"), filed on April 9, 1999)(2)

     4.6        --     Specimen certificate of Class B common stock (filed as Exhibit 4.2 to the Equity Registration
                       Statement)(2)

     4.7        --     Certificate of Designation of 6.75% Redeemable Cumulative Convertible Preferred Stock (filed
                       as Exhibit 3 to the November 2000 10-Q)(2)

     4.8        --     Certificate of Designation of Series A Junior Participating Preferred Stock (filed as
                       Exhibit 3 to the November 2000 10-Q)(2)

     4.9        --     Form of Warrant Agreement(1)

     4.10       --     Form of Deposit Agreement(1)

     4.11       --     Form of Stock Purchase Contract Agreement(1)

     4.12       --     Form of Subscription Rights Agreement(1)

     5          --     Opinion of William G. von Glahn, Esq., regarding the legality of the securities

     8          --     Opinion of Conner & Winters, A Professional Corporation, regarding certain federal tax
                       matters(1)

     12         --     Computations of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed
                       Charges and Preferred Stock Dividend Requirements

     21         --     List of Subsidiaries (filed as Exhibit 21 to the Annual Report on Form 10-K/A for the fiscal
                       year ended December 31, 1999, as filed on June 16, 2000)(2)

     23.1       --     Consent of Ernst & Young LLP

     23.2       --     Consent of William G. von Glahn, Esq. (included in Exhibit 5)

     23.3       --     Consent of Conner & Winters, A Professional Corporation (included in Exhibit 8)

     24         --     Power of Attorney

     25         --     Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
                       The Bank of New York, as trustee under the Indenture(1)
</TABLE>

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

(1)      To be filed by amendment or as an exhibit to the Company's Current
         Report on Form 8-K in connection with a specific offering.

(2)      Previously filed with the Securities and Exchange Commission as part of
         the filing indicated and incorporated herein by reference.

ITEM 17.  UNDERTAKINGS.

     (a)  WCG hereby undertakes:

                  (1) To file, during any period in which offers or sales are
         being made, a post-effective amendment to this Registration Statement:




                                      II-2
<PAGE>   44


                           (i) To include any prospectus required by Section
                  10(a)(3) of the Securities Act;

                           (ii) To reflect in the prospectus any facts or events
                  arising after the effective date of this Registration
                  Statement (or the most recent post-effective amendment
                  thereto) which, individually or in the aggregate, represent a
                  fundamental change in the information set forth in this
                  Registration Statement. Notwithstanding the foregoing, any
                  increase or decrease in volume of securities offered (if the
                  total dollar value of securities offered would not exceed that
                  which was registered) and any deviation from the low or high
                  end of the estimated maximum offering range may be reflected
                  in the form of prospectus filed with the Commission pursuant
                  to Rule 424(b) if, in the aggregate, the changes in volume and
                  price represent no more than a 20 percent change in the
                  maximum aggregate offering price set forth in the "Calculation
                  of Registration Fee" table in the effective registration
                  statement; and

                           (iii) To include any material information with
                  respect to the plan of distribution not previously disclosed
                  in this Registration Statement or any material change to such
                  information in this Registration Statement;

         provided, however, that paragraphs (i) and (ii) above do not apply if
         the registration statement is on Form S-3, Form S-8 or Form F-3, and
         the information required to be included in a post-effective amendment
         by those paragraphs is contained in periodic reports filed with or
         furnished to the Commission by the registrant pursuant to Section 13 or
         Section 15(d) of the Exchange Act that are incorporated by reference in
         this Registration Statement.

                  (2) That, for the purpose of determining any liability under
         the Securities Act, each such post-effective amendment shall be deemed
         to be a new registration statement relating to the securities offered
         therein, and the offering of such securities at that time shall be
         deemed to be the initial bona fide offering thereof.

                  (3) To remove from registration by means of a post-effective
         amendment any of the securities being registered that remain unsold at
         the termination of the offering.

     (b) WCG hereby undertakes that, for purposes of determining any liability
under the Securities Act, each filing of WCG's annual report pursuant to Section
13(a) of 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

     (h) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of WCG
pursuant to the foregoing provisions, or otherwise, WCG has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.

         In the event a claim for indemnification against such liabilities
(other than the payment by WCG of expenses incurred or paid by a director,
officer or controlling person of WCG in a successful defense of any action, suit
or proceeding) is asserted against WCG by such director, officer or controlling
person in connection with the securities being registered, WCG will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

     (i)  WCG hereby undertakes that:

                  (1) For purposes of determining any liability under the
         Securities Act of 1933, the information omitted from the form of
         prospectus filed as a part of this Registration Statement in reliance
         upon Rule 430A and contained in a form of prospectus filed by the
         registrant pursuant to Rule 424(b)(1) or




                                      II-3
<PAGE>   45


         (4) or 497(h) under the Securities Act shall be deemed to be part of
         this Registration Statement as of the time it was declared effective.

                  (2) For purposes of determining any liability under the
         Securities Act of 1933, each post-effective amendment that contains a
         form of prospectus shall be deemed to be a new registration statement
         relating to the securities offered therein, and the offering of such
         securities at that time shall be deemed to be the initial bona fide
         offering thereof.

     (j) WCG hereby undertakes to file an application for the purpose of
 determining the eligibility of the trustee to act under subsection (a) of
 section 3.0 of the Trust Indenture Act of 1939 (the "1939 Act") in accordance
 with the rules and regulations prescribed by the Commission under section
 305(b)(2) of the 1939 Act.





                                      II-4
<PAGE>   46


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Tulsa and State of Oklahoma on the 12th day of
January, 2001.


                               WILLIAMS COMMUNICATIONS GROUP, INC.
                                        (registrant)


                               By:   /s/ P. DAVID NEWSOME, JR.
                                   -----------------------------------------
                                        ( P. David Newsome, Jr.
                                        Attorney-in-fact)

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the date indicated:


<TABLE>
<CAPTION>
SIGNATURE                                        TITLE                                           DATE
---------                                        -----                                           ----
<S>                                              <C>                                             <C>
                 *                               Chairman of the Board                       January 12, 2001
--------------------------------------------
Keith E. Bailey


                 *                               Director, President and Chief Executive     January 12, 2001
--------------------------------------------     Officer (principal executive officer)
Howard A. Janzen


                 *                               Director and Senior Vice President --       January 12, 2001
--------------------------------------------     Strategic Investments
John C. Bumgarner, Jr.


                 *                               Senior Vice President and Chief Financial   January 12, 2001
--------------------------------------------     Officer (Principal Financial Officer)
Scott E. Schubert


                 *                               Vice President and Controller (Principal    January 12, 2001
--------------------------------------------     Accounting Officer)
Ken Kinnear


                 *                               Director                                    January 12, 2001
--------------------------------------------
J. Cliff Eason


                 *                               Director                                    January 12, 2001
--------------------------------------------
Michael P. Johnson, Sr.


                 *                               Director                                    January 12, 2001
--------------------------------------------
Robert W. Lawless

                 *                               Director                                    January 12, 2001
--------------------------------------------
Steven J. Malcolm


                 *                               Director                                    January 12, 2001
--------------------------------------------
H. Brian Thompson


                 *                               Director                                    January 12, 2001
--------------------------------------------
Cuba Wadlington, Jr.
</TABLE>


                                                *Pursuant to a power of attorney



<PAGE>   47

<PAGE>   48




                                INDEX TO EXHIBITS


<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                        DESCRIPTION
  ------                                        -----------
<S>                    <C>
   1            --     Form of Underwriting Agreement(1)

   4.1          --     Restated Certificate of Incorporation of the Company (filed as Exhibit 3 to the Company's
                       Quarterly Report on Form 10-Q dated November 8, 2000 (the "November 2000 10-Q"))(2)

   4.2          --     Restated By-laws of the Company (filed as Exhibit 3.2 to the Company's Current Report on
                       Form 8-K dated October 1, 1999)(2)

   4.3          --     Form of Indenture between the Company and The Bank of New York, as trustee, relating to
                       issuance from time to time of senior debt securities, subordinate debt securities and senior
                       subordinate debt securities

   4.4          --     Form of Debt Security (included in Exhibit 4.3)

   4.5          --     Specimen certificate of Class A common stock (filed as Exhibit 4.1 to Registration Statement
                       No. 333-76007 on Form S-1 relating to an equity offering (the "Equity Registration Statement"),
                       filed on April 9, 1999)(2)

   4.6          --     Specimen certificate of Class B common stock (filed as Exhibit 4.2 to the Equity Registration
                       Statement)(2)

   4.7          --     Certificate of Designation of 6.75% Redeemable Cumulative Convertible Preferred Stock (filed
                       as Exhibit 3 to the November 2000 10-Q)(2)

   4.8          --     Certificate of Designation of Series A Junior Participating Preferred Stock (filed as
                       Exhibit 3 to the November 2000 10-Q)(2)

   4.9          --     Form of Warrant Agreement(1)

   4.10         --     Form of Deposit Agreement(1)

   4.11         --     Form of Stock Purchase Contract Agreement(1)

   4.12       --     Form of Subscription Rights Agreement(1)

   5            --     Opinion of William G. von Glahn, Esq., regarding the legality of the securities

   8            --     Opinion of Conner & Winters, A Professional Corporation, regarding certain federal tax
                       matters(1)

   12           --     Computations of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed
                       Charges and Preferred Stock Dividend Requirements

   21           --     List of Subsidiaries (filed as Exhibit 21 to the Annual Report on Form 10-K/A for the fiscal
                       year ended December 31, 1999, as filed on June 16, 2000)(2)

   23.1         --     Consent of Ernst & Young LLP

   23.2         --     Consent of William G. von Glahn, Esq. (included in Exhibit 5)

   23.3         --     Consent of Conner & Winters, A Professional Corporation (included in Exhibit 8)

   24           --     Power of Attorney

   25           --     Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
                       The Bank of New York, as trustee under the Indenture(1)
</TABLE>

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

(1)      To be filed by amendment or as an exhibit to the Company's Current
         Report on Form 8-K in connection with a specific offering.

(2)      Previously filed with the Securities and Exchange Commission as part of
         the filing indicated and incorporated herein by reference.




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