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EXHIBIT 1.2
STOCK AGENCY AGREEMENT
This STOCK AGENCY AGREEMENT (this "Agreement") is made and
entered into as of January 8, 2001, by and between Williams Communications
Group, Inc., a Delaware corporation (the "Company"), and The Bank of New York, a
New York banking corporation, as agent for the Company (the "Bank").
WHEREAS, pursuant to a Stock Transfer Agency Agreement, dated
as of September 30, 1999 (the "Stock Transfer Agency Agreement"), by and between
the Company and the Bank, the Bank performs stock transfer agency services for
the Company;
WHEREAS, on September 19, 2000, the Company issued 5,000,000
shares of its 6.75% Redeemable Cumulative Convertible Preferred Stock, par value
$.01 per share (the "Preferred Stock"), with respect to which the Bank currently
acts as transfer agent;
WHEREAS, pursuant to the Certificate of Designations relating
to the Preferred Stock, the Company has the option to pay all or any part of a
dividend on the shares of Preferred Stock by delivering to the transfer agent
for the Preferred Stock shares of Class A common stock, par value $.01 per share
(the "Common Stock"), of the Company to be sold for cash to pay dividends to
holders of Preferred Stock; and
WHEREAS, the Company and the Bank desire to set forth the
terms pursuant to which the Company will effect any such dividend payments by
delivering shares of Common Stock to the Bank to be sold for cash to pay
dividends to holders of Preferred Stock.
NOW, THEREFORE, in consideration of the mutual premises herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which each of the parties hereby acknowledges, the Company and
the Bank hereby covenant and agree as follows:
1. Stock Issuance.
(a) In the event that the Company desires to pay all or any part of a
dividend on the Preferred Stock with shares of Common Stock, prior to the
applicable dividend payment date, the Company will deliver to the Bank a number
of shares of Common Stock which, when sold by the Bank, shall result in net cash
proceeds
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sufficient (together with any cash payments made by the Company to the Bank for
such purpose) to permit the Bank to pay the applicable dividend in cash to the
holders of shares of Preferred Stock, together with instructions for the Bank to
effect such sales in accordance with the terms of this Agreement, which
instructions shall indicate the applicable dividend payment date, the aggregate
dividend payment to be made on such date and any specific instructions regarding
the manner of sale of the shares of Common Stock.
(b) Upon receipt of such shares of Common Stock and related
instructions, the Bank shall, not later than the business day next following
such receipt, initiate one or more trades with respect to the sale of such
shares of Common Stock in accordance with this paragraph. Such sales of Common
Stock shall be made through the facilities of the New York Stock Exchange at
then prevailing market prices. Such sales may be made through one or more
brokers (which may be affiliated with the Bank) which may receive customary
compensation in the form of fees or commissions. Not later than the business day
next following the date on which any such sale is made, the Bank shall give the
Company written notice of the price at which each such share is sold and any
brokerage fee or commission paid in connection with such sale. The Bank is
hereby authorized to issue that number of shares so sold in such denominations
and registered in such names as the Bank shall determine in accordance with such
sales. On or prior to the applicable dividend payment date, the Bank shall make
payment of all of the cash proceeds, net of any brokers' fees or commissions,
from such sales to the holders of record of Preferred Stock as of the relevant
record date by mailing a check to each registered holder, payable to such
registered holder, to the address of record or dividend mailing address, with
respect to such holder's pro rata share of such net cash proceeds.
(c) All shares of Common Stock delivered by the Company to the Bank
pursuant to this Agreement, and the net cash proceeds from the sale of such
shares, shall be held by the Bank for the exclusive benefit of the holders of
Preferred Stock.
(d) The issuance and delivery of certificates evidencing any such
shares of Common Stock to the Bank, and the payment of dividends on the
Preferred Stock, shall be effected in accordance with the Stock Transfer Agency
Agreement and this Agreement.
2. Termination. This Agreement shall automatically terminate when the
Bank ceases to act as transfer agent for the Preferred Stock.
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3. Successors and Assigns. This Agreement shall extend to and shall be
binding upon the parties hereto and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by either party
without the prior written consent of the other party; and provided, further,
that any reorganization, merger, consolidation, or sale of assets by the Bank
shall not be deemed to constitute an assignment of this Agreement.
4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, including, without
limitation, Section 5-1401 of the New York General Obligations Law.
5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts, together, shall constitute one instrument.
6. Amendment. This Agreement may not be amended or modified in any
manner except by a written agreement duly authorized and executed by both
parties.
7. No Third Party Beneficiaries. The provisions of this Agreement are
intended to benefit only the Bank, its agents, affiliates and attorneys and the
Company, and no rights shall be granted to any other person by virtue of this
Agreement.
8. Stock Transfer Agency Agreement. In acting hereunder, each of the
Bank and its agents and affiliates shall be entitled to all rights, benefits,
privileges, protections, immunities and indemnities accorded to it in the Stock
Transfer Agency Agreement, including, without limitation, the right to be
indemnified and held harmless from and against any and all claims, costs,
demands, expenses and liabilities (including reasonable attorney's fees and
expenses), that may be incurred resulting from or arising out of its duties
hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective corporate officers, thereunto duly
authorized, as of the day and year first above written.
WILLIAMS COMMUNICATIONS GROUP, INC.
By: /s/ HOWARD S. KALIKA
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Name: Howard S. Kalika
Title: Vice President and Treasurer
THE BANK OF NEW YORK,
as agent for the Company
By:
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Name:
Title:
