WILLIAMS COMPANIES INC
SC 13E4/A, 1995-06-20
NATURAL GAS TRANSMISSION
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<PAGE>   1
 
   
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 1995
    
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
   
                                AMENDMENT NO. 1
    
   
                                       TO
    
 
                                 SCHEDULE 13E-4
                         ISSUER TENDER OFFER STATEMENT
                      (PURSUANT TO SECTION 13(E)(1) OF THE
                        SECURITIES EXCHANGE ACT OF 1934)
                            ------------------------
 
                          THE WILLIAMS COMPANIES, INC.
                                (NAME OF ISSUER)
 
                          THE WILLIAMS COMPANIES, INC.
                      (NAME OF PERSON(S) FILING STATEMENT)
                            ------------------------
 
                        $2.21 CUMULATIVE PREFERRED STOCK
                         (TITLE OF CLASS OF SECURITIES)
 
                                  969457 40 7
                     (CUSIP NUMBER OF CLASS OF SECURITIES)
                            ------------------------
 
                             J. FURMAN LEWIS, ESQ.
                   SENIOR VICE PRESIDENT AND GENERAL COUNSEL
                          THE WILLIAMS COMPANIES, INC.
                              ONE WILLIAMS CENTER
                             TULSA, OKLAHOMA 74172
                                 (918) 588-2000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE NOTICES AND
                               COMMUNICATIONS ON
                   BEHALF OF THE PERSON(S) FILING STATEMENT)
 
                            ------------------------
 
                                    Copy To:
 
                             KEITH L. KEARNEY, ESQ.
                             DAVIS POLK & WARDWELL
                              450 LEXINGTON AVENUE
                            NEW YORK, NEW YORK 10017
                                 (212) 450-4000
                            ------------------------
 
                                            , 1995
                      (DATE TENDER OFFER FIRST PUBLISHED,
                       SENT OR GIVEN TO SECURITY HOLDERS)
 
                           CALCULATION OF FILING FEE
 
<TABLE>
<CAPTION>
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             TRANSACTION VALUATION                          AMOUNT OF FILING FEE
<S>                                            <C>
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                      N/A                                            N/A
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</TABLE>
 
/X/  Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which this offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form or
schedule and the date of its filing.
 
   
<TABLE>
<S>                      <C>                          <C>            <C>
Amount previously paid:  $32,232.79                   Filing Party:  The Williams Companies, Inc.
Form or registration no.:  33-60397                   Date Filed:    June 20, 1995
</TABLE>
    
 
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<PAGE>   2
 
ITEM 1.  SECURITY AND ISSUER.
 
     (a) The name of the issuer is The Williams Companies, Inc., a Delaware
corporation (the "Company"), which has its principal executive offices at One
Williams Center, Tulsa, Oklahoma 74172 (Telephone Number (918) 588-2000).
 
   
     (b) The information set forth in the front cover page, "Certain
Considerations", "Market and Trading Information" and "Transactions and
Arrangements Concerning the Shares of the Preferred Stock" of the Offer to
Exchange dated June   , 1995, a copy of which is attached hereto as Exhibit
(a)(1) (the "Offer to Exchange"), is incorporated herein by reference.
    
 
     (c) The information set forth in "Market and Trading Information" of the
Offer to Exchange is incorporated herein by reference.
 
     (d) This statement is being filed by the issuer.
 
ITEM 2.  SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
 
     (a) The information set forth in the front cover page and "The Exchange
Offer" of the Offer to Exchange is incorporated herein by reference.
 
     (b) Not applicable.
 
ITEM 3.  PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
         AFFILIATE.
 
   
     (a)-(j) The information set forth in "Special Factors" and "Certain
Considerations" of the Offer to Exchange is incorporated herein by reference.
    
 
ITEM 4.  INTEREST IN SECURITIES OF THE ISSUER.
 
     The information set forth in "Transactions and Arrangements Concerning the
Shares of the Preferred Stock" of the Offer to Exchange is incorporated herein
by reference.
 
ITEM 5.  CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
         TO THE ISSUER'S SECURITIES.
 
     The information set forth in "Transactions and Arrangements Concerning the
Shares of the Preferred Stock" of the Offer to Exchange is incorporated herein
by reference.
 
ITEM 6.  PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
 
     The information set forth in the front cover page and in "The Exchange
Offer -- Dealer Managers"; -- "Fees and Expenses; Transfer Taxes"; "-- Exchange
Agent and Information Agent" of the Offer to Exchange is incorporated herein 
by reference.
 
ITEM 7.  FINANCIAL INFORMATION.
 
   
     (a)-(b) The information set forth in "Ratio of Earnings to Fixed Charges"
and in the Company's Annual Report on Form 10-K for the year ended December 31,
1994, and the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995, and incorporated in "Incorporation of Certain Documents by
Reference," of the Offer to Exchange is incorporated herein by reference.
    
 
ITEM 8.  ADDITIONAL INFORMATION.
 
   
     (a) None.
    
 
   
     (b) The information set forth in "Certain Considerations" of the Offer to
Exchange is incorporated herein by reference.
    
 
   
     (c) Section 7 of the Exchange Act does not apply because these are not
margin securities.
    
 
   
     (d) None.
    
 
                                        1
<PAGE>   3
 
     (e) Reference is hereby made to the Offer to Exchange, the Letter of
Transmittal and the other exhibits to this Schedule, all of which are attached
hereto and incorporated in their entirety by reference.
 
ITEM 9.  MATERIAL TO BE FILED AS EXHIBITS.
 
   
<TABLE>
<S>        <C>
(a)(1)     Form of Offer to Exchange dated June   , 1995.
(a)(2)*    Form of Letter of Transmittal.
(a)(3)*    Form of Notice of Guaranteed Delivery.
(a)(4)*    Form of Letter to brokers, dealers, commercial banks, trust companies and
           other nominees dated           , 1995.
(a)(5)*    Form of Letter to clients for use by brokers, dealers, commercial banks,
           trust companies and other nominees dated             , 1995.
(a)(6)*    Form of Letter to holders of shares of Preferred Stock dated           ,
           1995.
(a)(7)*    Press Release dated May 16, 1995.
(a)(8)     Form of summary advertisement dated           , 1995.
(a)(9)*    Guidelines for Certification of Taxpayer Identification Number on
           Substitute
           Form W-9.
(b)        Not applicable.
(c)        Not applicable.
(d)*       Legal Opinion of Miller & Chevalier, Chartered, special tax counsel to
           the Company.
(e)        The Prospectus relating to the Offer to Exchange filed with the
           Commission in connection with the Registration Statement on Form S-4
           (Registration No. 33-60397) (filed as Exhibit (a)(1) above).
(f)*       Form of Questions and Answers sheet to be sent to holders of shares of
           the Preferred Stock and to be used by Brokers, Dealers, Commercial Banks,
           Trust Companies and other nominees in responding to inquiries from their
           clients.
</TABLE>
    
 
- ---------------
   
* Previously filed.
    
 
                                        2
<PAGE>   4
 
     After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Issuer Tender Offer Statement on Schedule
13E-4 is true, complete and correct.
 
                                          THE WILLIAMS COMPANIES, INC.
 
   
                                             By: /s/  JAMES R. HERBSTER
    
 
                                               ---------------------------------
   
                                               James R. Herbster
    
   
                                               Senior Vice President
    
 
   
Dated: June 20, 1995
    
 
                                        3
<PAGE>   5
                                EXHIBIT INDEX
   
<TABLE>
<S>        <C>
(a)(1)     Form of Offer to Exchange dated June   , 1995.
(a)(2)*    Form of Letter of Transmittal.
(a)(3)*    Form of Notice of Guaranteed Delivery.
(a)(4)*    Form of Letter to brokers, dealers, commercial banks, trust companies and
           other nominees dated           , 1995.
(a)(5)*    Form of Letter to clients for use by brokers, dealers, commercial banks,
           trust companies and other nominees dated             , 1995.
(a)(6)*    Form of Letter to holders of shares of Preferred Stock dated           ,
           1995.
(a)(7)*    Press Release dated May 16, 1995.
(a)(8)     Form of summary advertisement dated           , 1995.
(a)(9)*    Guidelines for Certification of Taxpayer Identification Number on
           Substitute
           Form W-9.
(b)        Not applicable.
(c)        Not applicable.
(d)*       Legal Opinion of Miller & Chevalier, Chartered, special tax counsel to
           the Company.
(e)        The Prospectus relating to the Offer to Exchange filed with the
           Commission in connection with the Registration Statement on Form S-4
           (Registration No. 33-       ) (filed as Exhibit (a)(1) above).
(f)*       Form of Questions and Answers sheet to be sent to holders of shares of
           the Preferred Stock and to be used by Brokers, Dealers, Commercial Banks,
           Trust Companies and other nominees in responding to inquiries from their
           clients.
</TABLE>
    
 
- ---------------
   
* Previously filed.
    
 

<PAGE>   1

     INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
     REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
     SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
     MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
     BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
     THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
     SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
     UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
     OF ANY SUCH STATE.
 

                  SUBJECT TO COMPLETION, DATED JUNE   , 1995
 
PROSPECTUS
 
                          THE WILLIAMS COMPANIES, INC.
                               OFFER TO EXCHANGE
                    % QUARTERLY INCOME CAPITAL SECURITIES (QUICS(SM)
            (SUBORDINATED DEFERRABLE INTEREST DEBENTURES, DUE 2025)
                                      FOR
                        $2.21 CUMULATIVE PREFERRED STOCK
                            ------------------------
               THE EXCHANGE OFFER AND THE WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON             , 1995, UNLESS EXTENDED.
                            ------------------------
 
   
     The Williams Companies, Inc. (the "Company") hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus (the "Prospectus")
and in the accompanying Letter of Transmittal (the "Letter of Transmittal",
which together with the Prospectus, constitute the "Exchange Offer"), to
exchange up to $90,752,500 aggregate principal amount of its      % Quarterly
Income Capital Securities (the "Debentures") (equivalent to $          per $25
principal amount of Debentures) for up to 3,630,100 shares of its $2.21
Cumulative Preferred Stock, $1.00 par value (the "Preferred Stock"), which
constitute all outstanding shares of the Preferred Stock as of the date of this
Prospectus.
    
 
   
     The Debentures are offered in minimum denominations of $25 and integral
multiples thereof, and the shares of the Preferred Stock have a liquidation
preference of $25 per share. Consequently, the Exchange Offer will be effected
on the basis of $25 principal amount of Debentures for each share of Preferred
Stock validly tendered and accepted for exchange. As part of the Exchange Offer,
holders of shares of the Preferred Stock accepted for exchange in the Exchange
Offer will be entitled to receive cash equal to the accrued and unpaid dividends
on such shares accumulating after June 1, 1995 (the most recent dividend payment
date) to the Issuance Date (as herein defined) in lieu of such dividends (such
amount, without interest, the "Payment in Lieu of Accumulated Dividends"),
payable on the Issuance Date to such holders.
    
 
     Pursuant to the terms and subject to the conditions of the Exchange Offer,
the Company will accept for exchange any and all shares of the Preferred Stock
validly tendered and not properly withdrawn prior to 5:00 p.m., New York City
time, on             , 1995 or if the Exchange Offer is extended by the Company,
in its sole discretion, the latest time and date to which it is extended (the
"Expiration Time"). Tenders of shares of the Preferred Stock pursuant to the
Exchange Offer are irrevocable, except that shares of the Preferred Stock
tendered pursuant to the Exchange Offer may be withdrawn at any time prior to
the Expiration Time and, unless theretofore accepted for exchange pursuant to
the Exchange Offer, may be withdrawn at any time after 40 business days from the
date of this Prospectus. A holder of shares of the Preferred Stock who desires
to tender such shares and whose certificates for such shares are not immediately
available, or who cannot comply in a timely manner with the procedure for
book-entry transfer, may tender such shares of the Preferred Stock by following
the procedures for guaranteed delivery set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures". For a description of the other terms
of the Exchange Offer, see "The Exchange Offer".
 
   
     See "Prospectus Summary -- Comparison of Debentures and Preferred Stock",
"Certain Considerations" and "Special Factors" for a description of the
principal terms of and certain significant considerations relating to the
Exchange Offer, the Preferred Stock and the Debentures.
    
 
     THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE THEIR SHARES OF
THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.
 
   
     NEITHER THIS TRANSACTION NOR THESE SECURITIES HAVE BEEN APPROVED OR
         DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
            STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
                 EXCHANGE COMMISSION OR ANY STATE SECURITIES
                    COMMISSION PASSED UPON THE FAIRNESS OR
                     MERITS OF THIS TRANSACTION NOR UPON
                       THE ACCURACY OR ADEQUACY OF THE
                        INFORMATION CONTAINED IN THIS
                        PROSPECTUS. ANY REPRESENTATION
                         TO THE CONTRARY IS UNLAWFUL.
    
- ---------------
(SM) LEHMAN BROTHERS HAS APPLIED FOR A SERVICE MARK FOR QUICS.
                            ------------------------
 
                THE DEALER MANAGERS FOR THE EXCHANGE OFFER ARE:
                     LEHMAN BROTHERS  MORGAN STANLEY & CO.
                                                         INCORPORATED
                            ------------------------
 
               The date of this Prospectus is             , 1995.
<PAGE>   2
 
   
     The Debentures will mature on                , 2025 and will bear interest
at an annual rate of      % from the first day following the Expiration Time
(the "Issuance Date"). In addition, as part of the Exchange Offer, holders of
shares of the Preferred Stock which are accepted for exchange will receive cash
in the amount of the Payment in Lieu of Accumulated Dividends, payable on the
Issuance Date. Interest on the Debentures will be payable quarterly in arrears
on March 31, June 30, September 30 and December 31, commencing September 30,
1995 (each an "Interest Payment Date"); provided that, so long as an Event of
Default (as hereinafter defined) has not occurred and is not continuing with
respect to the Debentures, the Company will have the right to extend the
interest payment period at any time and from time to time on the Debentures for
a period not to exceed 20 consecutive quarterly interest payment periods and, as
a consequence, the quarterly interest payments on the Debentures would be
deferred (but would continue to accrue with interest thereon compounded
quarterly at the rate of interest on the Debentures) during any such extended
interest payment period (each a "Deferral Period"). In the event that the
Company exercises its right, the Company may not declare or pay dividends on, or
redeem, purchase or acquire, any of its Capital Stock (as herein defined) during
such Deferral Period. Therefore, the Company believes that the extension of a
quarterly interest payment period on the Debentures is unlikely. However, if the
Company were to extend a quarterly interest payment period on the Debentures,
the market price of the Debentures would likely be adversely affected. During
any such Deferral Period, the Company may continue to extend the interest
payment period, provided that the aggregate interest payment period, as
extended, must end on an Interest Payment Date and must not exceed 20
consecutive quarterly interest payment periods or extend beyond the maturity of
the Debentures or any date on which any Debentures are fixed for redemption.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Company may extend the quarterly payment periods anew, subject to the
above requirements. See "Description of Debentures -- Quarterly Payments" and
" -- Payment Deferrals".
    
 
   
     The Debentures are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness (as hereinafter
defined) of the Company, but senior to all Capital Stock of the Company,
including the Preferred Stock. On May 2, 1995, approximately $1.5 billion of
such Senior Indebtedness was outstanding. In addition, the Debentures will also
be effectively subordinate to all existing and future obligations of the
Company's subsidiaries. On May 2, 1995 approximately $1.5 billion of
indebtedness of the Company's subsidiaries not included in Senior Indebtedness
was outstanding. See "Description of Debentures -- Subordination" and
"Capitalization".
    
 
   
     Because the Company is a holding company that conducts business through its
subsidiaries, the ability of the Company to pay principal of and interest on the
Debentures is, to a large extent, dependent upon the Company's receipt of
dividends or other payments from its subsidiaries.
    
 
   
     The Debentures will be redeemable at the option of the Company, in whole or
in part, at any time on or after September 1, 1997 (which is the same date after
which the shares of the Preferred Stock are first redeemable at the option of
the Company), at a redemption price equal to 100% of the principal amount
redeemed ($25 for each $25 principal amount of Debentures) plus accrued and
unpaid interest to the date fixed for redemption. See "Description of
Debentures -- Optional Redemption".
    
 
   
     For federal income tax purposes, the exchange of the shares of the
Preferred Stock for Debentures will be a taxable transaction, and the Debentures
will be treated as having been issued with original issue discount. The original
issue discount rules may accelerate the timing of a holder's recognition of
income. For a discussion of these and other United States federal income tax
considerations relevant to the Exchange Offer, see "Certain
Considerations -- Original Issue Discount" and "-- Certain United States Federal
Income Tax Consequences".
    
 
     The shares of the Preferred Stock are listed and principally traded on the
New York Stock Exchange (the "NYSE"). On                , 1995, the last full
day of trading prior to the commencement of the Exchange Offer, the closing
sales price of the shares of the Preferred Stock on the NYSE as reported on the
Composite Tape was $     per share. Holders of shares of the Preferred Stock are
urged to obtain current market quotations therefor.
 
   
     The Debentures constitute a new issue of debt securities with no
established trading market. While the Company intends to apply for listing of
the Debentures on the NYSE, there can be no assurance that an active
    
 
                                        i
<PAGE>   3
 
   
market for the Debentures will develop or be sustained in the future on the
NYSE. Moreover, to the extent that shares of the Preferred Stock are tendered
and accepted in the Exchange Offer, the liquidity and trading market for the
Preferred Stock could be adversely affected.
    
 
     Lehman Brothers and Morgan Stanley & Co. Incorporated (the "Dealer
Managers") are acting as Dealer Managers for the Exchange Offer. The Dealer
Managers have agreed to use their best efforts to solicit the exchange of the
shares of the Preferred Stock pursuant to the Exchange Offer. First Chicago
Trust Company of New York (the "Exchange Agent") is acting as Exchange Agent in
connection with the Exchange Offer and Morrow & Co., Inc. (the "Information
Agent") is acting as Information Agent in connection with the Exchange Offer.
 
     Questions and requests for assistance may be directed to the Dealer
Managers or the Information Agent, as set forth on the back cover of this
Prospectus. Requests for or additional copies of this Prospectus, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be directed to the
Information Agent.
                            ------------------------
 
     NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING THE
SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER. NO PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THE EXCHANGE OFFER, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MAY
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
 
     THE COMPANY IS NOT AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF THE
EXCHANGE OFFER IS NOT IN COMPLIANCE WITH APPLICABLE LAW. IF THE COMPANY BECOMES
AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF THE EXCHANGE OFFER WOULD NOT BE
IN COMPLIANCE WITH APPLICABLE LAW, THE COMPANY WILL MAKE A GOOD FAITH EFFORT TO
COMPLY WITH SUCH LAW. IF, AFTER SUCH GOOD FAITH EFFORT, THE COMPANY CANNOT
COMPLY WITH ANY SUCH LAW, THE EXCHANGE OFFER WILL NOT BE MADE TO (NOR WILL
TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS RESIDING IN SUCH
JURISDICTIONS. IN ANY JURISDICTION WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS
REQUIRE THE EXCHANGE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE
EXCHANGE OFFER WILL BE DEEMED TO BE MADE ON BEHALF OF THE COMPANY BY THE DEALER
MANAGERS OR ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF
SUCH JURISDICTION.
 
     NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
 
                             AVAILABLE INFORMATION
 
   
     The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-4 (the "Registration
Statement", which term shall encompass all amendments, exhibits, annexes and
schedules thereto) pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). The Company has filed an Issuer Tender Offer Statement on
Schedule 13E-4 (the "Schedule 13E-4", which term shall encompass all amendments
exhibits, annexes and schedules thereto) and a Transaction Statement on Schedule
13E-3 (the "Schedule 13E-3", which term shall encompass all amendments exhibits,
annexes and schedules thereto) with the Commission under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which include certain additional
information relating to the Exchange Offer, and the rules and regulations
promulgated thereunder, covering the Debentures being offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, the Schedule 13E-4 and the Schedule 13E-3, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and to
which reference is hereby made. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
    
 
                                       ii
<PAGE>   4
 
     The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith files periodic reports and other
information with the Commission. The Registration Statement, as well as such
reports and other information filed by the Company with the Commission, may be
inspected at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at the regional offices of
the Commission located at 7 World Trade Center, Suite 1300, New York, New York
10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Certain of the securities of the Company are listed on the NYSE and the
Pacific Stock Exchange Inc. Reports and other information concerning the Company
can also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005 and the Pacific Stock Exchange, Inc., 301 Pine Street, San Francisco,
California 90014.
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
   
     This prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents are available from The Williams
Companies, Inc., One Williams Center, Tulsa, Oklahoma 74172, (918) 588-2000,
Attention: Corporate Secretary. In order to ensure timely delivery of the
documents, any request should be made not later than five business days prior to
the Expiration Time.
    
 
     The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference in
this Prospectus:
 
          1. the Company's Annual Report on Form 10-K for the year ended
     December 31, 1994;
 
          2. the Company's Quarterly Report on Form 10-Q for the quarter ended
     March 31, 1995;
 
          3. the Company's Current Reports on Form 8-K dated January 11, 1995,
     January 31, 1995 and May 4, 1995;
 
          4. the Company's Current Report on Form 8-K/A dated March 29, 1995,
     excluding item 8 of Transco Energy Company's Annual Report on Form 10-K for
     the fiscal year ended December 31, 1994, which 10-K is incorporated by
     reference in the Form 8-K/A; and
 
          5. the Proxy Statement of the Company dated March 18, 1995.
 
   
     Each document filed by the Company pursuant to Section 13, 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the Exchange Offer pursuant hereto shall be deemed to be
incorporated by reference in this Prospectus and to be a part of this Prospectus
from the date of filing of such document. Any statement contained in this
Prospectus or in a document incorporated or deemed to be incorporated by
reference in this Prospectus shall be deemed to be modified or superseded for
purposes of the Registration Statement and this Prospectus to the extent that a
statement contained in this Prospectus, or in any subsequently filed document
that also is or is deemed to be incorporated by reference in this Prospectus,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
    
constitute a part of the Registration Statement or this Prospectus.
 
                                       iii
<PAGE>   5
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                                                        PAGE
                                                                                        ----
<S>                                                                                     <C>
Available Information.................................................................   ii
Incorporation of Certain Documents by Reference.......................................  iii
Prospectus Summary....................................................................    1
Comparison of Debentures and the Preferred Stock......................................    7
Certain Considerations................................................................    9
Special Factors.......................................................................   11
The Company...........................................................................   13
Ratio of Earnings to Fixed Charges....................................................   14
Capitalization........................................................................   14
The Exchange Offer....................................................................   15
Market and Trading Information........................................................   23
Transactions and Arrangements Concerning the Shares of the Preferred Stock............   24
Certain United States Federal Income Tax Consequences.................................   24
Description of Debentures.............................................................   28
Description of the Preferred Stock....................................................   34
Legal Opinions........................................................................   35
Experts...............................................................................   35
</TABLE>
    
 
                                       iv
<PAGE>   6
 
                               PROSPECTUS SUMMARY
 
     The following summary does not purport to be complete and is qualified in
its entirety by the detailed information appearing elsewhere in this Prospectus
or by documents incorporated by reference into the Prospectus. Capitalized terms
used herein have the respective meanings ascribed to them elsewhere in this
Prospectus.
 
                                  THE COMPANY
 
     The Company, through subsidiaries, is engaged in the transportation and
sale of natural gas and related activities, natural gas gathering and processing
operations, the transportation of petroleum products, the telecommunications
business and provides a variety of other products and services to the energy
industry and financial institutions. In January of 1995 the Company sold a major
portion of its telecommunications assets and in May of 1995 the Company
completed the acquisition of Transco Energy Company which, through its
subsidiaries, transports natural gas to markets in the eastern half of the
United States. The Company's subsidiaries currently own and operate: (i) four
interstate natural gas pipeline systems and have a fifty percent interest in a
fifth; (ii) a common carrier petroleum products pipeline system; and (iii)
natural gas gathering and processing facilities and production properties. The
Company also markets natural gas and natural gas liquids. The Company's
telecommunications subsidiaries offer data, voice and video-related products and
services and customer premises equipment nationwide. The Company also has
investments in the equity of certain other companies.
 
                        CERTAIN INVESTOR CONSIDERATIONS
 
     Prospective investors should carefully review the information contained
elsewhere in this Prospectus prior to making a decision regarding the Exchange
Offer and should particularly consider the following matters:
 
POTENTIAL BENEFITS TO EXCHANGING HOLDERS
 
   
     - The annual interest rate on the Debentures will be      %, (equivalent to
       $          per $25 principal amount of Debentures) as compared with the
       indicated annual dividend rate of $2.21 on the Preferred Stock. See
       "Comparison of Debentures and Preferred Stock".
    
 
   
     - The Debentures will rank senior to the shares of the Preferred Stock as
       to payment in respect thereof and as to the distribution of assets upon
       liquidation. However, the Debentures are unsecured obligations of the
       Company and will be, and the shares of the Preferred Stock are,
       subordinate in right to payment to all existing and future Senior
       Indebtedness of the Company and effectively subordinated to all
       obligations of the Company's subsidiaries. See "Certain
       Considerations -- Subordination of Debentures".
    
 
   
     - While dividends on the shares of the Preferred Stock may be deferred
       indefinitely, the interest payment period on the Debentures can only be
       extended for a maximum of 20 consecutive quarterly interest payment
       periods. In each case, however, the Company believes that such deferral
       is unlikely. See "Certain Considerations -- Right of Company to Defer
       Payment of Interest".
    
 
   
     - In order to benefit from the higher annual interest rate on the
       Debentures, holders of the shares of the Preferred Stock need not pay any
       additional cash. Holders of shares of the Preferred Stock wishing to
       participate in the Exchange Offer must tender their shares of the
       Preferred Stock in accordance with the instructions contained in "The
       Exchange Offer -- Procedure for Tendering Preferred Stock" and in the
       Letter of Transmittal prior to the Expiration Time.
    
 
POTENTIAL RISKS TO EXCHANGING HOLDERS
 
   
     - The interest payment period on the Debentures may be extended for a
       maximum of 20 consecutive quarterly interest payment periods. While the
       Company believes that such an extension is unlikely, if
    
 
                                        1
<PAGE>   7
 
   
       the Company were to extend an interest payment period, the market price
       of the Debentures would likely be adversely affected.
    
 
   
     - Participation in the Exchange Offer will be a taxable event. In addition,
       in the event the interest payment period on the Debentures is extended as
       described above, holders may be required to pay taxes on an accrual basis
       even though they would not receive the interest payments until a later
       time. See "Certain Considerations -- Certain United States Federal Income
       Tax Consequences".
    
 
   
     - While dividends on the shares of the Preferred Stock are eligible for the
       dividends received deduction for corporate holders, interest on the
       Debentures will not be eligible for the dividends received deduction for
       corporate holders. The dividends received deduction is not applicable for
       individual, non-corporate holders. See "Comparison of Debentures and
       Preferred Stock".
    
 
   
     - There has not been any public market for the Debentures. While the
       Company intends to make an application for listing of the Debentures on
       the NYSE, there can be no assurance that an active market for the
       Debentures will develop or be sustained in the future on such exchange.
       See "Certain Considerations -- Listing and Trading of Debentures and
       Preferred Stock".
    
 
OTHER CONSIDERATIONS
 
   
     - Depending upon the number of shares of the Preferred Stock exchanged
       pursuant to the Exchange Offer, the Preferred Stock may no longer meet
       the requirements of the NYSE for continued listing and may no longer
       continue to be registered under the Exchange Act. As a result the
       liquidity and trading market for the Preferred Stock could be adversely
       affected. See "Special Factors -- Certain Effects of the Exchange Offer;
       Plans of the Company after the Exchange Offer" and "Certain
       Considerations -- Listing and Trading of Debentures and Preferred Stock".
    
 
     - Tendering holders will not be obligated to pay brokerage commissions or
       fees to the Dealer Managers, the Exchange Agent, the Information Agent or
       the Company or, subject to the instructions in the Letter of Transmittal
       with respect to special issuance instructions, transfer taxes with
       respect to the exchange of shares of the Preferred Stock pursuant to the
       Exchange Offer. Tendering holders whose shares are held by a broker,
       dealer, bank or trust company may, however, be charged a fee for services
       rendered in connection with the Exchange Offer.
 
                                        2
<PAGE>   8
 
                               THE EXCHANGE OFFER
 
PURPOSE OF THE EXCHANGE OFFER
 
   
     The principal purpose of the Exchange Offer is to improve the Company's
after-tax cash flow by replacing shares of the Preferred Stock with Debentures.
The potential cash flow benefit to the Company arises because interest payable
on the Debentures will be deductible by the Company (as it accrues) for United
States federal income tax purposes, while dividends payable with respect to the
shares of the Preferred Stock are not deductible. See "Special Factors -- 
Purpose of the Exchange Offer".
    
 
TERMS OF THE EXCHANGE OFFER
 
   
     Upon the terms and subject to the conditions of the Exchange Offer, the
Company is offering to exchange up to $90,752,500 aggregate principal amount of
its Debentures for up to 3,630,100 shares of the Preferred Stock, which
constitute all outstanding shares of the Preferred Stock as of the date of this
Prospectus. Exchanges will be made on the basis of $25 principal amount of
Debentures for each share of the Preferred Stock validly tendered and accepted
for exchange. See "The Exchange Offer -- General".
    
 
     Pursuant to the terms and subject to the conditions of the Exchange Offer,
the Company will accept for exchange any and all shares of the Preferred Stock
validly tendered and not properly withdrawn prior to the Expiration Time.
 
     The Exchange Offer is subject to certain conditions. See "The Exchange
Offer -- Expiration; Extension; Termination; Amendment".
 
SECURITIES OFFERED
 
   
     The Debentures will mature on               , 2025 and will bear interest
at an annual rate of      % from the Issuance Date. In addition, holders of
shares of the Preferred Stock accepted for exchange will receive cash in the
amount of the Payment in Lieu of Accumulated Dividends, payable on the Issuance
Date. Interest on the Debentures will be payable quarterly in arrears on March
31, June 30, September 30 and December 31, commencing September 30, 1995;
provided that, so long as an Event of Default has not occurred and is not
continuing with respect to the Debentures, the Company will have the right, upon
prior notice by public announcement given in accordance with NYSE rules at any
time, to extend the interest payment period at any time and from time to time on
the Debentures for a period not to exceed 20 consecutive quarterly interest
payment periods at any one time and, as a consequence, quarterly interest
payments on the Debentures would be deferred (but would continue to accrue with
interest thereon compounded quarterly at the rate of interest on the Debentures)
during any Deferral Period. In the event that the Company exercises this right,
the Company may not declare or pay dividends on, or redeem, purchase or acquire,
any of its Capital Stock during such Deferral Period. All series of the
Company's preferred stock, common stock and any other equity securities of the
Company are referred to herein as "Capital Stock". Therefore, the Company
believes that the extension of a quarterly interest payment period on the
Debentures is unlikely. However, should the Company determine to extend such
right in the future, the market price of the Debentures is likely to be
adversely affected. During any such Deferral Period, the Company may continue to
extend the interest payment period, provided that the aggregate interest payment
period, as extended, must end on an Interest Payment Date and must not exceed 20
consecutive quarterly interest payment periods or extend beyond the maturity of
the Debentures or any date on which any Debentures are fixed for redemption.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Company may extend the quarterly interest payment periods anew, subject
to the above requirements. See "Description of Debentures -- Quarterly Payments"
and " -- Payment Deferrals".
    
 
   
     The Debentures are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness of the Company, but
senior to all Capital Stock of the Company, including the Preferred Stock. On
May 2, 1995, approximately $1.5 billion of such Senior Indebtedness was
outstanding. As the Debentures will be issued by the Company, the Debentures
will also be effectively subordinate to all obligations of the Company's
subsidiaries. On May 2, 1995, approximately $1.5 billion in indebtedness of the
    
 
                                        3
<PAGE>   9
 
   
Company's subsidiaries not included in Senior Indebtedness was outstanding. See
"Description of Debentures -- Subordination". The Debentures will be redeemable
at the option of the Company, in whole or in part, at any time on or after
September 1, 1997 (which is the same date after which the shares of the
Preferred Stock are first redeemable at the option of the Company), at a
redemption price equal to 100% of the principal amount redeemed plus accrued and
unpaid interest to the date fixed for redemption. If fewer than all the
Debentures are redeemed, the Trustee under the Indenture shall select an
appropriate and fair manner pursuant to which the Debentures shall be redeemed.
See "Description of Debentures -- Optional Redemption".
    
 
   
     For federal income tax purposes, the exchange of shares of the Preferred
Stock for Debentures will be a taxable transaction, and the Debentures will be
treated as having been issued with original issue discount. The original issue
discount rules may accelerate the timing of a holder's recognition of income.
For a discussion of these and other United States federal income tax
considerations relevant to the Exchange Offer, see "Certain
Considerations -- Original Issue Discount" and "-- Certain United States Federal
Income Tax Consequences".
    
 
EXPIRATION; EXTENSION; AMENDMENTS; TERMINATION; AND WITHDRAWAL RIGHTS
 
     The Exchange Offer will expire at 5:00 p.m., New York City time on
              , 1995, unless the Company, in its sole discretion, shall have
extended the period during which the Exchange Offer is open, in which event the
Exchange Offer will expire at the latest time and date as so extended by the
Company. See "The Exchange Offer -- Expiration; Extension; Termination;
Amendment". Tenders of shares of the Preferred Stock pursuant to the Exchange
Offer are irrevocable, except that shares of the Preferred Stock tendered
pursuant to the Exchange Offer may be withdrawn at any time prior to the
Expiration Time and, unless theretofore accepted for exchange pursuant to the
Exchange Offer, may also be withdrawn at any time after 40 business days from
the date of this Prospectus. See "The Exchange Offer -- Withdrawal Rights".
 
     The Company expressly reserves the right, in its sole discretion, to (i)
extend, amend or modify the terms of the Exchange Offer in any manner and (ii)
withdraw or terminate the Exchange Offer and not accept for exchange any
Preferred Stock, at any time for any reason. See "The Exchange Offer --
Expiration; Extension; Termination; Amendment".
 
PROCEDURE FOR TENDERING
 
     For shares of the Preferred Stock to be validly tendered pursuant to the
Exchange Offer, (i) the Letter of Transmittal or a facsimile thereof (all
references in this Prospectus to the Letter of Transmittal shall be deemed to
include a facsimile thereof) properly completed and duly executed in accordance
with the instructions contained herein and therein, together with any required
signature guarantees, or an Agent's Message (as hereinafter defined) in
connection with a book-entry transfer of shares of the Preferred Stock, must be
received by the Exchange Agent, at either of its addresses set forth on the back
cover page of this Prospectus and either (a) certificates for the shares of the
Preferred Stock must be received by the Exchange Agent at either address or (b)
such shares of the Preferred Stock must be transferred pursuant to the
procedures for book-entry transfer described herein and a confirmation of such
book-entry transfer must be received by the Exchange Agent, in each case prior
to the Expiration Time or (ii) the guaranteed delivery procedures described
herein must be complied with. See "The Exchange Offer -- General" and
"-- Procedure for Tendering Preferred Stock".
 
     NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING SHARES OF THE
PREFERRED STOCK SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE
INFORMATION AGENT. SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.
 
SPECIAL PROCEDURE FOR BENEFICIAL OWNERS
 
     Any beneficial owner whose shares of the Preferred Stock are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact such registered
 
                                        4
<PAGE>   10
 
holder promptly and instruct such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on its own behalf,
such owner must, prior to completing and executing a Letter of Transmittal and
delivery of its shares of Preferred Stock, either make appropriate arrangements
to register ownership of the Preferred Stock in such owner's name or obtain a
properly completed stock power from the registered holder. The transfer of
registered ownership may take considerable time and may not be able to be
completed prior to the Expiration Date. See "The Exchange Offer -- Procedure for
Tendering Preferred Stock".
 
GUARANTEED DELIVERY PROCEDURES
 
     If a holder desires to accept the Exchange Offer and time will not permit a
Letter of Transmittal or shares of the Preferred Stock to reach the Exchange
Agent before the Expiration Time or the procedure for book-entry transfer cannot
be completed on a timely basis, a tender may be effected in accordance with the
guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed
Delivery Procedures".
 
ACCRUED DIVIDENDS
 
   
     Holders of shares of the Preferred Stock accepted for exchange pursuant to
the Exchange Offer will receive cash in the amount of the Payment in Lieu of
Accumulated Dividends, payable on the Issuance Date. See "The Exchange
Offer -- Accrued Dividends".
    
 
     Dividends on shares of the Preferred Stock not exchanged in the Exchange
Offer will continue to accrue and be payable when, as and if declared in
accordance with their terms.
 
   
ACCEPTANCE OF SHARES AND DELIVERY OF DEBENTURES
    
 
   
     Subject to the terms and conditions of the Exchange Offer, including the
reservation by the Company of the right to withdraw, amend or terminate the
Exchange Offer and certain other rights, the Company will accept for exchange
shares of the Preferred Stock that are properly tendered in the Exchange Offer
and not withdrawn prior to the Expiration Time. Subject to such terms and
conditions, the Debentures issued pursuant to the Exchange Offer will be issued
as of the Issuance Date and will be delivered as promptly as practicable
following the Expiration Time. See "The Exchange Offer -- General",
"-- Expiration; Extension; Termination; Amendment".
    
 
UNTENDERED SHARES OF THE PREFERRED STOCK
 
   
     Holders of shares of the Preferred Stock who do not tender their shares in
the Exchange Offer will continue to hold such shares and will be entitled to all
of the rights and preferences, and will be subject to all of the limitations,
applicable thereto. Depending upon the number of shares of the Preferred Stock
exchanged pursuant to the Exchange Offer, the Preferred Stock may no longer meet
the requirements of the NYSE for continued listing and may no longer continue to
be registered under the Exchange Act. If, as a result of the exchange of shares
of the Preferred Stock pursuant to the Exchange Offer or otherwise, the shares
of the Preferred Stock no longer meet the requirements of the NYSE for continued
listing and the listing of the shares of the Preferred Stock is discontinued, or
if the shares no longer are registered under the Exchange Act, the market for
the Preferred Stock could be adversely affected. See "Special Factors -- Certain
Effects of the Exchange Offer; Plans of the Company after the Exchange Offer".
    
 
EXCHANGE AGENT AND INFORMATION AGENT
 
     First Chicago Trust Company of New York has been appointed as Exchange
Agent in connection with the Exchange Offer and Morrow & Co., Inc. has been
appointed as Information Agent in connection with the Exchange Offer. Questions
and requests for assistance, requests for additional copies of this Prospectus
or of the Letter of Transmittal and requests for Notices of Guaranteed Delivery
should be directed to the Information Agent. The addresses and telephone numbers
of the Exchange Agent and the Information Agent are set forth on the back cover
page of this Prospectus.
 
                                        5
<PAGE>   11
 
DEALER MANAGERS
 
   
     Lehman Brothers and Morgan Stanley & Co. Incorporated have been retained as
Dealer Managers to solicit exchanges of shares of the Preferred Stock for
Debentures. Questions with respect to the Exchange Offer may be directed to
David B. Parsons, Lehman Brothers -- Liability Management Group, at
1-800-438-3242 (toll-free) or 1-212-528-7581 (collect) or to Steven C. Sahara,
Morgan Stanley & Co. Incorporated -- Preferred Stock Group, at 1-800-422-6464
ext. 6620 (toll-free).
    
 
FEES AND EXPENSES
 
     The expense of soliciting tenders of shares of the Preferred Stock will be
borne by the Company. Subject to the receipt of a Letter of Transmittal with the
part thereof entitled "Notice of Solicited Tenders" properly completed and duly
executed as described herein, the Company will pay to any Soliciting Dealer (as
hereinafter defined) a solicitation fee of $.50 per share of the Preferred Stock
tendered and accepted for exchange pursuant to the Exchange Offer. The Company
will pay all transfer taxes, if any, applicable to the exchange of shares of the
Preferred Stock pursuant to the Exchange Offer. See "The Exchange Offer -- Fees
and Expenses; Transfer Taxes".
 
                                        6
<PAGE>   12
 
   
                COMPARISON OF DEBENTURES AND THE PREFERRED STOCK
    
 
   
     The following is a brief summary comparison of certain of the principal
terms of the Debentures and the Preferred Stock.
    
 
   
<TABLE>
<CAPTION>
                                      DEBENTURES                     PREFERRED STOCK
                           --------------------------------  --------------------------------
<S>                        <C>                               <C>
Interest/Dividend Rate...  % annual interest (equivalent to  $2.21 annual dividend, payable
                           $          per $25 principal      quarterly out of funds legally
                           amount of Debentures) payable in  available therefor on December
                           arrears on December 31, March     1, March 1, June 1 and September
                           31, June 30 and September 30 of   1 of each year, when, as and if
                           each year, commencing September   declared by the Company's Board
                           30, 1995, subject to the          of Directors.
                           Company's right to defer the
                           interest payment period at any
                           time and from time to time;
                           provided that the aggregate
                           interest payment period, as
                           extended, must end on an
                           Interest Payment Date and must
                           not exceed 20 consecutive
                           quarterly interest payment
                           periods or extend beyond the
                           maturity of the Debentures or
                           any date on which the Debentures
                           are fixed for redemption as
                           described herein. At the end of
                           each Deferral Period, the
                           Company shall pay all interest
                           then accrued and unpaid
                           (compounded quarterly at the
                           rate of interest on the
                           Debentures). During any Deferral
                           Period the Company may not
                           declare or pay any dividend on,
                           or redeem, purchase or acquire,
                           any of its Capital Stock.
                           Therefore, the Company believes
                           that the extension of a
                           quarterly interest payment
                           period on the Debentures is
                           unlikely.
Maturity.................  , 2025                            Not applicable. There is no
                                                             mandatory redemption or sinking
                                                             fund for the Preferred Stock.
 
Optional Redemption......  Redeemable at the option of the   Redeemable at the option of the
                           Company at any time on or after   Company at any time on or after
                           September 1, 1997, in whole or    September 1, 1997, in whole or
                           in part, at a redemption price    in part, at a redemption price
                           equal to 100% of the principal    equal to $25 per share of
                           amount redeemed ($25 for each     Preferred Stock plus accrued and
                           $25 principal amount of           accumulated but unpaid dividends
                           Debentures) plus accrued and      to the date fixed for
                           unpaid interest to the date       redemption.
                           fixed for redemption.
</TABLE>
    
 
                                        7
<PAGE>   13
 
   
<TABLE>
<CAPTION>
                                      DEBENTURES                     PREFERRED STOCK
                           --------------------------------  --------------------------------
<S>                        <C>                               <C>
Subordination............  Unsecured obligations of the      Subordinate to claims of
                           Company and subordinated to all   creditors, including holders of
                           existing and future Senior        the Company's outstanding debt
                           Indebtedness of the Company, but  securities, including the
                           senior to all Capital Stock of    Debentures, but senior to the
                           the Company, including the        common stock of the Company.
                           Preferred Stock. Effectively      Effectively subordinated to all
                           subordinated to all obligations   obligations of the Company's
                           of the Company's subsidiaries.    subsidiaries.
 
Voting Rights............  None.                             Non-voting, except that if
                                                             dividends are in arrears on any
                                                             series of preferred stock of the
                                                             Company for six quarters, the
                                                             holders of all series of the
                                                             Company's preferred stock,
                                                             voting separately as a class,
                                                             are entitled to elect two
                                                             additional members of the Board
                                                             of Directors of the Company.
 
New York Stock Exchange    Application will be made to list  The shares of the Preferred
  Listing................  the Debentures on the NYSE.       Stock are listed on the NYSE.
 
Dividends Received         Interest on the Debentures will   Dividends on the Preferred Stock
  Deduction..............  not be eligible for the           are eligible for the dividends
                           dividends received deduction for  received deduction for corporate
                           corporate holders. The dividends  holders. The dividends received
                           received deduction is not         deduction is not applicable for
                           applicable for individual,        individual, non- corporate
                           non-corporate holders.            holders.
 
Original Issue             The Debentures will be treated    The shares of the Preferred
  Discount...............  as having been issued with        Stock were not issued with
                           original issue discount.          original issue discount.
</TABLE>
    
 
                                        8
<PAGE>   14
 
   
                             CERTAIN CONSIDERATIONS
    
 
   
     Prospective exchanging shareholders should carefully consider, in addition
to the other information set forth elsewhere in this Prospectus, the following
risk factors:
    
 
RIGHT OF COMPANY TO DEFER PAYMENT OF INTEREST
 
   
     So long as no Event of Default with respect to the Debentures has occurred
and is continuing, the Company shall have the right, upon prior notice by public
announcement given in accordance with NYSE rules at any time, to extend the
interest payment period at any time and from time to time on the Debentures for
a period not to exceed 20 consecutive quarterly interest payment periods. No
interest shall be due and payable during a Deferral Period, but on the Interest
Payment Date occurring at the end of each Deferral Period the Company shall pay
to the holders of record on the record date for such Interest Payment Date
(regardless of who the holders of record may have been on other dates during the
Deferral Period) all accrued and unpaid interest on the Debentures, together
with interest thereon compounded quarterly at the rate of interest on the
Debentures. In the event that the Company exercises its right to extend, the
Company may not declare or pay dividends on, or redeem, purchase or acquire, any
shares of its Capital Stock until deferred interest on the Debentures is paid in
full. Therefore, the Company believes that the extension of a quarterly interest
payment period on the Debentures is unlikely.
    
 
   
     Upon the termination of any Deferral Period and the payment of all interest
then due, the Company may commence a new Deferral Period. Consequently, there
could be multiple Deferral Periods of varying lengths throughout the term of the
Debentures. See "Description of Debentures -- Payment Deferral".
    
 
   
ORIGINAL ISSUE DISCOUNT
    
 
   
     For federal income tax purposes, the Debentures will be treated as having
original issue discount. The amount of the original issue discount includible in
income by a holder of Debentures for any quarter could in some circumstances
exceed the interest payment on the Debentures for such holder. In addition, in
the event a Deferral Period occurs, holders of the Debentures would continue,
under the original issue discount rules, to accrue income on the Debentures for
United States federal income tax purposes. As a result, a holder ordinarily
would include such amounts in gross income in advance of the receipt of cash. A
holder that disposes of its Debentures prior to the record date for payment of
interest at the end of a Deferral Period will not receive cash from the Company
related to such interest because such interest will be paid to the holder of
record on such record date, regardless of who the holders of record may have
been on other dates during the Deferral Period. The extent to which such a
holder will receive a return on the Debentures for the period it held such
Debentures will depend on the market for the Debentures at the time of such
disposition. See "Certain United States Federal Income Tax
Consequences -- United States Holders".
    
 
     The Company has no current intention of exercising its right to extend an
interest payment period.
 
POTENTIAL MARKET VOLATILITY DURING DEFERRAL PERIOD
 
   
     As described above, the Company has the right to extend an interest payment
period from time to time for a period not exceeding 20 consecutive quarterly
interest payment periods. In the event the Company determines to extend an
interest payment period, or in the event the Company thereafter extends a
Deferral Period, the market price of the Debentures is likely to be adversely
affected. A holder that disposes of its Debentures during a Deferral Period,
therefore, may not receive the same return on its investment as a holder that
continues to hold its Debentures. In addition, as a result of such rights, the
market price of the Debentures may be more volatile than other debt instruments
that do not have such rights.
    
 
   
SUBORDINATION OF DEBENTURES
    
 
   
     The Debentures are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness (as hereinafter
defined) of the Company, but senior to all Capital Stock of the Company,
including the Preferred Stock. On May 2, 1995, approximately $1.5 billion of
such Senior 
    
 
                                        9
<PAGE>   15
 
   
Indebtedness was outstanding. There are no terms in the Debentures that limit  
the Company's ability to incur additional indebtedness, including indebtedness
that would rank senior to the Debentures. With respect to the Debentures, the
Indenture (as hereinafter defined) does not contain any cross-defaults to any
other indebtedness of the Company, and therefore, a default with respect to, or
the acceleration of, any such indebtedness will not constitute an "Event of
Default" with respect to the Debentures. An "Event of Default" with respect to
the Debentures would constitute an "Event of Default" under certain outstanding
debt agreements of the Company (a deferral of the interest payment during a
Deferral Period will not constitute an Event of Default). As the Debentures will
be issued by the Company, the Debentures will also be effectively subordinate to
all obligations of the Company's subsidiaries. On May 2, 1995, approximately
$1.5 billion of indebtedness of the Company's subsidiaries not included in
Senior Indebtedness was outstanding. See "Description of Debentures" and
"Capitalization".
    
 
   
CERTAIN LEGAL MATTERS; REGULATORY AND FOREIGN APPROVALS; NO APPRAISAL RIGHTS
    
 
   
     The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its exchange
of shares of the Preferred Stock for Debentures as contemplated in the Exchange
Offer or of any approval or other action by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the Company's exchange for or ownership of shares of the
Preferred Stock pursuant to the Exchange Offer. Should any such approval or
other action be required, the Company currently contemplates that it will seek
such approval or other action. The Company cannot predict whether it may
determine that it is required to delay the acceptance for exchange of, or
exchange for, shares of the Preferred Stock tendered pursuant to the Exchange
Offer pending the outcome of any such matter. There can be no assurance that any
such approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to the Company's
business. The Company intends to make all required filings under the Exchange
Act.
    
 
   
     There is no shareholder vote required in connection with the Exchange
Offer.
    
 
   
     No appraisal rights are available to holders of shares of the Preferred
Stock in connection with the Exchange Offer.
    
 
   
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
    
 
   
     For federal income tax purposes, the exchange of the shares of the
Preferred Stock for Debentures will be a taxable transaction, and as described
above under "Original Issue Discount" the Debentures will be treated as having
been issued with original issue discount. The original issue discount rules may
accelerate the timing of a holder's recognition of income. In addition, while
dividends on the shares of the Preferred Stock are eligible for the dividends
received deduction for corporate holders, interest on the Debentures will not be
eligible for the dividends received deduction for corporate holders. The
dividends received deduction is not applicable for individual, non-corporate
holders. For a discussion of these and other United States federal income tax
considerations relevant to the Exchange Offer, see "Certain United States
Federal Income Tax Consequences".
    
 
   
LISTING AND TRADING OF DEBENTURES AND PREFERRED STOCK
    
 
   
     The exchange of shares of the Preferred Stock pursuant to the Exchange
Offer will reduce the number of shares of the Preferred Stock that might
otherwise trade publicly and the number of holders of such shares, and depending
on the number of shares exchanged, could adversely affect the liquidity and
market value of remaining shares held by the public.
    
 
   
     Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet the
requirements of the NYSE for continued listing. As of May 4, 1995, there were
3,630,100 issued and outstanding shares of the Preferred Stock and 714 record
holders of the shares of the Preferred Stock. According to the NYSE's published
guidelines, the NYSE would consider delisting the Preferred Stock if, among
other things, the number of publicly held shares of the Preferred Stock 
    
 
                                       10
<PAGE>   16
 
   
should fall below 100,000 or the aggregate market value of publicly held shares
of the Preferred Stock should fall below $2,000,000. If, as a result of the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer or 
otherwise, the shares of the Preferred Stock no longer meet the requirements 
of the NYSE for continued listing and the listing of the shares of the 
Preferred Stock is discontinued, the market for the Preferred Stock could be 
adversely affected. 
    
 
   
     In the event of the delisting of the Preferred Stock by the NYSE, it is
possible that the Preferred Stock would continue to trade on another securities
exchange or in the over-the-counter market and that price quotations would be
reported by such exchange, by the NASD through the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or by other sources.
The extent of the public market for such Preferred Stock and the availability of
such quotations would, however, depend upon such factors as the number of
shareholders remaining at such time, the interest in maintaining a market in
such Preferred Stock on the part of securities firms, the possible termination
of registration under the Exchange Act, as described below, and other factors.
    
 
   
     There has not been any public market for the Debentures. While the Company
intends to list the Debentures on the NYSE, there can be no assurance that an
active market for the Debentures will develop or be sustained in the future on
such exchange. Listing will depend upon the satisfaction of the NYSE's listing
requirements with respect to the Debentures, including requirements as to the
principal amount and distribution of the Debentures. Although the Dealer
Managers have indicated to the Company that they intend to make a market in the
Debentures as permitted by applicable laws and regulations, they are not
obligated to do so and may discontinue any such market-making at any time
without notice. Accordingly, no assurance can be given as to the liquidity of,
or trading for, the Debentures.
    
 
   
                                SPECIAL FACTORS
    
 
   
PURPOSE OF THE EXCHANGE OFFER
    
 
   
     The Company is making the Exchange Offer because it believes that the Offer
will improve the Company's after-tax cash flow by replacing shares of the
Preferred Stock with Debentures. The potential cash flow benefit to the Company
arises because interest payable on the Debentures will be deductible by the
Company (as it accrues) for United States federal income tax purposes, while
dividends payable on the shares of the Preferred Stock are not deductible.
Because of the current interest rate environment and the tax deductible nature
of the Debentures, the Company has decided to pursue the exchange at this time.
The Company's Board of Directors (the "Board of Directors") has authorized the
Exchange Offer by a unanimous vote.
    
 
   
FAIRNESS OF THE EXCHANGE OFFER
    
 
     The Company believes the Exchange Offer is fair to holders of shares of the
Preferred Stock. In particular, the Exchange Offer will result in the holders
obtaining a security that is senior to the Preferred Stock, that provides for a
higher interest rate than the equivalent dividend on the Preferred Stock and
that provides for a definitive maturity date.
 
   
     Neither the Company nor the Board of Directors received any report, opinion
(other than certain opinions of counsel) or appraisal which is materially
related to the Exchange Offer, including, but not limited to, any such report,
opinion or appraisal relating to the consideration or the fairness of the
consideration to be offered to the holders of the shares of the Preferred Stock
or the fairness of such transaction to the Company. A majority of the directors
who are not employees of the Company have not retained any unaffiliated
representative to act solely on behalf of unaffiliated shareholders for the
purposes of reviewing the terms of the Exchange Offer. The determination of the
interest rate paid on the Debentures was based on the fact that the Debentures
would have a structurally senior position to the Preferred Stock and on current
market conditions, in light of the dividend rate on the shares of the Preferred
Stock and dividend rates for debt issued by similarly rated companies.
    
 
                                       11
<PAGE>   17
 
   
                    CERTAIN EFFECTS OF THE EXCHANGE OFFER;
                PLANS OF THE COMPANY AFTER THE EXCHANGE OFFER
    
 
   
     Following the consummation of the Exchange Offer, the business and
operations of the Company will be continued by the Company substantially as they
are currently being conducted. Except as disclosed in this Prospectus, the
Company has no present plans or proposals that would result in (i) the
acquisition by any person of any material amount of additional securities of the
Company, or the disposition of any material amount of securities of the Company,
(ii) an extraordinary corporate transaction, such as a merger, reorganization,
liquidation or sale or transfer of a material amount of assets (other than the
sale or transfer of certain non-core assets acquired by the Company through the
acquisition of Transco Energy Company) involving the Company or any of its
subsidiaries, (iii) any change in the present Board of Directors or management
of the Company, including, but not limited to, a plan or proposal to change the
number or term of the directors, to fill any existing vacancy on the Board of
Directors or to change any material term of the employment contract of any
executive officer, except in each case in connection with the Company's 1995
Annual Meeting of shareholders held on May 18, 1995, (iv) any material change in
the present dividend rate or policy or indebtedness or capitalization of the
Company (except that it is anticipated that subsidiaries of the Company may
incur additional obligations to which the Debentures will be effectively
subordinated), (v) any other material change in the Company's corporate
structure or business or (vi) any changes in the Company's charter, bylaws or
instruments corresponding thereto or any other actions which may impede the
acquisition or control of the Company by any person.
    
 
   
     Following the expiration of the Exchange Offer, the Company may, in its
sole discretion, determine to purchase any remaining shares of the Preferred
Stock or of Debentures through privately negotiated transactions, open market
purchases or another exchange or tender offer or otherwise, on such terms and at
such prices as the Company may determine from time to time, the terms of which
purchases or offers could differ from those of the Exchange Offer, except that
the Company will not make any such purchases of shares of the Preferred Stock or
of Debentures until the expiration of ten business days after the termination of
the Exchange Offer. Any possible future purchases of shares of the Preferred
Stock or of Debentures by the Company will depend on many factors, including the
market prices of the shares of Preferred Stock and Debentures, the Company's
business and financial position, alternative investment opportunities available
to the Company, the results of the Exchange Offer and general economic and
market conditions.
    
 
     Holders of shares of the Preferred Stock who do not tender their shares in
the Exchange Offer will continue to hold such shares and will be entitled to all
of the rights and preferences, and will be subject to all of the limitations,
applicable thereto.
 
   
     Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet the
requirements of the NYSE for continued listing, which could adversely affect the
liquidity and market value of the Preferred Stock. See "Certain
Considerations -- Listing and Trading of Debentures and Preferred Stock".
    
 
     The Preferred Stock is currently registered under the Exchange Act.
Registration of the Preferred Stock may be terminated upon application of the
Company to the Securities and Exchange Commission (the "Commission") pursuant to
Section 12(g)(4) of the Exchange Act if the shares of the Preferred Stock are
neither held by 300 or more holders of record nor listed on a national
securities exchange. Termination of registration of the Preferred Stock under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to the holders of shares of Preferred Stock (although
the Company would, among other things, remain subject to the reporting
obligations under the Exchange Act as a result of its other outstanding
securities) and would make certain provisions of the Exchange Act, such as the
requirements of Rule 13e-3 thereunder with respect to "going private"
transactions, no longer applicable in respect of the Preferred Stock.
 
     All shares of the Preferred Stock exchanged by the Company pursuant to the
Exchange Offer will be retired, canceled and thereafter returned to the status
of authorized but unissued shares of the Company's preferred stock. Any shares
of the Preferred Stock remaining outstanding after the Exchange Offer will
continue to be redeemable at the option of the Company after September 1, 1997.
See "Description of the Preferred Stock -- Optional Redemption". Upon
liquidation or dissolution of the Company, holders of shares
 
                                       12
<PAGE>   18
 
of the Preferred Stock are entitled to receive a liquidation preference in the
amount of $25 per share plus dividends accrued and accumulated but unpaid to the
redemption date, on a parity with holders of other Company preferred stock and
prior to payment of any amounts to the holders of the Common Stock. The only
other preferred stock of the Company currently outstanding is 2.5 million shares
of its series of $3.50 convertible preferred stock.
 
     THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE THEIR SHARES OF
THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.
 
   
                                  THE COMPANY
    
 
     The Company, through subsidiaries, is engaged in the transportation and
sale of natural gas and related activities, natural gas gathering and processing
operations, the transportation of petroleum products, the telecommunications
business and provides a variety of other products and services to the energy
industry and financial institutions. In January of 1995 the Company sold a major
portion of its telecommunications assets and in May of 1995 the Company
completed the acquisition of Transco Energy Company which, through its
subsidiaries, transports natural gas to markets in the eastern half of the
United States. The Company's subsidiaries currently own and operate: (i) four
interstate natural gas pipeline systems and have a fifty percent interest in a
fifth; (ii) a common carrier petroleum products pipeline system; and (iii)
natural gas gathering and processing facilities and production properties. The
Company also markets natural gas and natural gas liquids. The Company's
telecommunications subsidiaries offer data, voice and video-related products and
services and customer premises equipment nationwide. The Company also has
investments in the equity of certain other companies.
 
                                       13
<PAGE>   19
 
   
                       RATIO OF EARNINGS TO FIXED CHARGES
    
 
   
     The Company's consolidated ratios of earnings to fixed charges* were as
follows for the respective periods indicated:
    
 
   
<TABLE>
<CAPTION>
                               YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED     ----------------------------------------
  MARCH 31, 1995       1994     1993     1992     1991     1990
- ------------------     ----     ----     ----     ----     ----
<S>                    <C>      <C>      <C>      <C>      <C>
       2.48            2.30     2.53     1.75     1.57     1.30
</TABLE>
    
 
- ---------------
   
* For the purpose of this ratio (i) earnings consist of income from continuing
  operations before fixed charges and income taxes for the Company, its
  majority-owned subsidiaries and its proportionate share of 50 percent-owned
  companies, less undistributed earnings of less than 50 percent-owned
  companies; and (ii) fixed charges consist of interest and debt expense on all
  indebtedness (without reduction for interest capitalized), that portion of
  rental payments on operating leases estimated to represent an interest factor,
  plus the pretax effect of preferred stock dividends of its subsidiaries.
    
 
                                  CAPITALIZATION
 
   
     The following table sets forth the consolidated debt and stockholders'
equity of the Company at March 31, 1995 and adjusted to give effect to the
issuance of Debentures in exchange for shares of the Preferred Stock. The "As
Adjusted" column below assumes that holders of 3,630,100 shares of the Preferred
Stock (which constitute all outstanding shares of the Preferred Stock) elect to
participate in the Exchange Offer. The financial data at March 31, 1995 in the
following table are derived from the Company's financial statements included in
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995, which is incorporated herein by reference. See "Incorporation by
Reference."
    
 
   
<TABLE>
<CAPTION>
                                                                         MARCH 31, 1995
                                                                    ------------------------
                                                                    ACTUAL       AS ADJUSTED
                                                                    ------       -----------
                                                                          (IN MILLIONS)
    <S>                                                             <C>          <C>
    Long-term debt due within one year............................  $  187         $   187
                                                                    ======       =========
    Long-term debt................................................  $2,848         $ 2,948
 
    Stockholders' equity Preferred stock..........................     100          --
      Common stock................................................     105             105
      Capital in excess of par value..............................     994             994
      Retained earnings...........................................   1,779           1,779
      Unamortized deferred compensation...........................      (2)             (2)
                                                                    ------       -----------
                                                                     2,976           2,876
      Less treasury stock.........................................    (408)           (408)
                                                                    ------       -----------
      Total stockholders' equity..................................   2,568           2,468
                                                                    ------       -----------
              Total capitalization**..............................  $5,416         $ 5,416
                                                                    ======       =========
</TABLE>
    
 
- ---------------
   
** Excludes minority interest in common stock and preferred stock of a
   subsidiary.
    
 
                                       14
<PAGE>   20
 
                               THE EXCHANGE OFFER
 
GENERAL
 
   
     The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $90,752,500 aggregate principal amount of its Debentures for up
to 3,630,100 shares of the Preferred Stock, which constitutes all outstanding
shares of the Preferred Stock as of the date of this Prospectus. Pursuant to the
terms and subject to the conditions of the Exchange Offer, the Company will
accept for exchange any and all shares of the Preferred Stock validly tendered
and not properly withdrawn prior to the Expiration Time.
    
 
     Tendering holders will not be obligated to pay brokerage commissions or
fees to the Dealer Managers, the Exchange Agent, the Information Agent or the
Company or, subject to the instructions in the Letter of Transmittal with
respect to special issuance instructions, transfer taxes with respect to the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer. The
Company will pay all reasonable charges and expenses in connection with the
Exchange Offer, other than any applicable income taxes or any charges that
individual brokerage firms charge their clients for other services rendered in
connection with tendering their shares.
 
EXPIRATION; EXTENSION; TERMINATION; AMENDMENT
 
     The Exchange Offer will expire at the Expiration Time, unless the Company,
in its sole discretion, shall have extended the period during which the Exchange
Offer is open, in which case the term "Expiration Time" means the latest time
and date at which the Exchange Offer, as so extended by the Company, shall
expire.
 
     The Company expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period of time during which the
Exchange Offer is open by giving oral or written notice of such extension to the
Exchange Agent and making a public announcement thereof. There can be no
assurance that the Company will exercise its right to extend the Exchange Offer.
During any extension of the Exchange Offer, all shares of the Preferred Stock
previously tendered pursuant thereto and not exchanged or withdrawn will remain
subject to the Exchange Offer and may be accepted for exchange by the Company at
the expiration of the Exchange Offer subject to the right of a tendering holder
to withdraw its shares of the Preferred Stock. See "Withdrawal Rights" below.
 
     The Company expressly reserves the right to terminate the Exchange Offer
and not accept for exchange any shares of the Preferred Stock and promptly
return all shares to the remaining tendering holders thereof, at any time prior
to the Expiration Date for any reason.
 
     The Company also expressly reserves the right, subject to applicable law,
(i) to delay acceptance for exchange of any shares of the Preferred Stock to
comply in whole or in part with applicable law, by giving oral or written notice
of such delay to the Exchange Agent, (ii) to waive any condition to the Exchange
Offer and accept all shares of the Preferred Stock previously tendered pursuant
thereto, (iii) to extend the Expiration Time and retain all shares of the
Preferred Stock tendered pursuant thereto until the expiration of the Exchange
Offer as extended, (iv) to amend the Exchange Offer in any respect or (v) to
modify the form or amount of the consideration to be paid pursuant to the
Exchange Offer. If the Exchange Offer is so amended, the term "Exchange Offer"
shall mean the Exchange Offer as so amended. The reservation by the Company of
the right to delay acceptance for exchange of shares of the Preferred Stock is
subject to the provisions of Rule 13e-4 and Rule 14e-1(c) under the Exchange
Act, which require that the Company pay the consideration offered or return the
shares of the Preferred Stock deposited by or on behalf of holders thereof
promptly after the termination or withdrawal of the Exchange Offer.
 
     Any extension, delay, termination or amendment of the Exchange Offer will
be followed as promptly as practicable by a public announcement thereof. Without
limiting the manner in which the Company may choose to make a public
announcement of any extension, delay, termination or amendment of the Exchange
Offer, the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by issuing a release to the
Dow Jones News Service, except in the case of an
 
                                       15
<PAGE>   21
 
announcement of an extension of the Exchange Offer, in which case the Company
shall have no obligation to publish, advertise or otherwise communicate such
announcement other than by issuing a notice of such extension by press release
or other public announcement, which notice shall be issued no later than 9:00
A.M., New York City time, on the next business day after the previously
scheduled expiration date of the Exchange Offer.
 
     If the Company shall decide, in its sole discretion, to decrease the number
of shares of the Preferred Stock being sought in the Exchange Offer or to
increase or decrease the consideration offered to holders of shares of the
Preferred Stock to be paid in the Exchange Offer and if, at the time that notice
of such increase or decrease is first published, sent or given to holders of
shares of the Preferred Stock in the manner specified above, the Exchange Offer
is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from and including the date that such notice is
first so published, sent or given, the Exchange Offer will be extended until the
expiration of such period of ten business days. As used in this paragraph,
"business day" has the meaning set forth in Rule 14d-1 (and applicable to
Regulation 14E) under the Exchange Act.
 
     If the Company makes a material change in the terms of the Exchange Offer
or the information concerning the Exchange Offer, or waives any condition of the
Exchange Offer that results in a material change to the circumstances of the
Exchange Offer, the Company will disseminate additional exchange offer materials
to the extent required under the Exchange Act, and will extend the Exchange
Offer to the extent required in order to permit holders of the shares of the
Preferred Stock adequate time to consider such materials. The minimum period
during which the Exchange Offer must remain open following material changes in
the terms of the Exchange Offer or information concerning the Exchange Offer,
other than a change in price or percentage of securities sought, will depend
upon the facts and circumstances, including the relative materiality of the
terms or information.
 
PROCEDURE FOR TENDERING PREFERRED STOCK
 
     The acceptance by a holder of shares of the Preferred Stock of the Exchange
Offer pursuant to one of the procedures set forth below will constitute an
agreement between the holder of such shares and the Company in accordance with
the terms and subject to the conditions set forth in this Prospectus and in the
Letter of Transmittal.
 
     For shares of the Preferred Stock to be validly tendered pursuant to the
Exchange Offer, the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message (as hereinafter defined) in connection with a book-entry
transfer of shares of the Preferred Stock, and any other required documents,
must be received by the Exchange Agent at one of its addresses set forth on the
back cover page of this Prospectus prior to the Expiration Time. In addition,
either (i) the certificates representing tendered shares of the Preferred Stock
must be received by the Exchange Agent or such shares of the Preferred Stock
must be tendered pursuant to the procedure for book-entry transfer described
below and a confirmation of receipt of such tendered shares of the Preferred
Stock must be received by the Exchange Agent, in each case prior to the
Expiration Time, or (ii) the tendering holder must comply with the guaranteed
delivery procedures described below.
 
     THE METHOD OF DELIVERY OF SHARES OF THE PREFERRED STOCK, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER TENDERING SUCH SHARES AND, EXCEPT AS OTHERWISE
PROVIDED HEREIN, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE EXCHANGE AGENT. IF SENT BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE
PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE
MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION TIME TO PERMIT
DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION TIME.
 
     If a holder desires to tender shares of the Preferred Stock pursuant to the
Exchange Offer but is unable to locate the certificates representing such shares
to be tendered, such holder should write to or telephone First Chicago Trust
Company of New York, telephone number 201-324-0137, about procedures for
obtaining a replacement certificate for shares of the Preferred Stock and
arranging for indemnification.
 
                                       16
<PAGE>   22
 
     NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING PREFERRED STOCK
SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE INFORMATION AGENT.
SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.
 
     Any beneficial owner whose shares of the Preferred Stock are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact such registered holder promptly and
instruct such registered holder to tender on such beneficial owner's behalf.
 
     Book-Entry Transfer.  The Company understands that the Exchange Agent will
make a request promptly after the date of this Prospectus to establish accounts
with respect to the shares of the Preferred Stock at DTC for the purpose of
facilitating the Exchange Offer, and, subject to the establishment thereof, any
financial institution that is a participant in DTC's system may make book-entry
delivery of shares of the Preferred Stock by causing DTC to transfer such shares
into the Exchange Agent's account with respect to the shares of the Preferred
Stock in accordance with DTC's procedures for such transfer. Although delivery
of shares of the Preferred Stock may be effected through book-entry transfer
into the Exchange Agent's accounts at DTC pursuant to DTC's Automated Tender
Offer Program ("ATOP") procedures, a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
other required documents, must in each case be received by the Exchange Agent at
one of its addresses set forth on the back cover page of this Prospectus prior
to the Expiration Time, or, if the guaranteed delivery procedures described
below are complied with, within the time period provided under such procedures.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
 
     The term "Agent's Message" means a message, transmitted by DTC to, and
received by, the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering the shares of the Preferred Stock which are the
subject of such book-entry confirmation, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against such participant.
 
   
     Signature Guarantees.  All signatures on a Letter of Transmittal must be
guaranteed by an Eligible Institution, unless the shares of the Preferred Stock
which are the subject of such Letter of Transmittal are tendered or executed,
respectively, (i) by a registered holder (which term, for the purposes described
above, shall include any participant in DTC whose name appears on a security
position listing as the owner of shares of the Preferred Stock) of such shares
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. If shares of the Preferred Stock are
registered in the name of a person other than the signer of a Letter of
Transmittal or if Debentures and/or certificates for untendered or unexchanged
shares of the Preferred Stock are to be issued or returned to a person other
than the registered holder, then the shares of the Preferred Stock must be
endorsed by the registered holder or be accompanied by a stock power in form
satisfactory to the Company duly executed by the registered holder with such
signatures guaranteed by an Eligible Institution. If signatures on a Letter of
Transmittal are required to be guaranteed, such guarantees must be by a member
firm of a registered national securities exchange, a member of the NASD or by a
commercial bank or trust company having an office in the Untied States that is a
participant in the Security Transfer Agents Medallion Program or the Stock
Exchange Medallion Program (each of the foregoing being referred to as an
"Eligible Institution").
    
 
   
     Miscellaneous.  Issuance of Debentures in exchange for shares of the
Preferred Stock will be made only against deposit of the tendered shares of the
Preferred Stock. If less than the total number of shares of the Preferred Stock
evidenced by a submitted certificate for shares of the Preferred Stock is
tendered, the tendering holder of shares of the Preferred Stock should fill in
the number of shares tendered in the appropriate boxes on the Letter of
Transmittal. The Exchange Agent will then reissue and return to the tendering
holder (unless otherwise requested by the holder under "Special Issuance
Instructions" and "Special Delivery Instructions" in the Letter of Transmittal),
as promptly as practicable following the
    
 
                                       17
<PAGE>   23
 
Expiration Time, shares of the Preferred Stock equal to the number of such
delivered shares of the Preferred Stock not tendered, together with any tendered
shares of the Preferred Stock that were not accepted for exchange for any
reason. The total number of shares of the Preferred Stock deposited with the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
 
     All questions as to the form of all documents and the validity (including
the time of receipt), eligibility, acceptance and withdrawal of tendered shares
of the Preferred Stock will be determined by the Company, in its sole
discretion, which determination shall be final and binding. The Company
expressly reserves the absolute right to reject any and all tenders not in
proper form and to determine whether the acceptance of or exchange by it for
such tenders would be unlawful. The Company also reserves the absolute right,
subject to applicable law, to waive or amend any of the conditions of the
Exchange Offer or to waive any defect or irregularity in the tender of any
particular shares of the Preferred Stock. None of the Company, the Exchange
Agent, the Information Agent, the Dealer Managers or any other person will be
under any duty to give notification of any defects or irregularities in tenders
or will incur any liability for failure to give any such notification. No tender
of shares of the Preferred Stock will be deemed to have been validly made until
all defects and irregularities with respect to such shares have been cured or
waived. Any shares of the Preferred Stock received by the Exchange Agent that
are not properly tendered and as to which irregularities have not been cured or
waived will be returned by the Exchange Agent to the appropriate tendering
holder as soon as practicable. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding on all parties.
 
GUARANTEED DELIVERY PROCEDURES
 
     If a holder desires to tender shares of the Preferred Stock and the
holder's shares are not immediately available or time will not permit the
holder's shares of the Preferred Stock, Letter of Transmittal or other required
documents to reach the Exchange Agent prior to the Expiration Time or the
procedure for book-entry transfer cannot be completed on a timely basis, a
tender may be effected if:
 
          (a) the tender is made by or through an Eligible Institution; and
 
          (b) prior to the Expiration Time, the Exchange Agent receives from
     such Eligible Institution a properly completed and duly executed Notice of
     Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
     substantially in the form provided by the Company which contains a
     signature guaranteed by an Eligible Institution in the form set forth in
     such Notice of Guaranteed Delivery (unless such tender is for the account
     of an Eligible Institution) which sets forth the name and address of the
     holder of the shares of the Preferred Stock and the number of shares of the
     Preferred Stock tendered, states that the tender is being made thereby and
     guarantees that within five NYSE trading days after the Expiration Time,
     the Letter of Transmittal (or facsimile thereof), properly completed and
     duly executed, with any required signature guarantees, or an Agent's
     Message in connection with a book-entry transfer of shares of the Preferred
     Stock, and any other documents required by the Letter of Transmittal,
     together with the shares of the Preferred Stock will be deposited by the
     Eligible Institution with the Exchange Agent; and
 
          (c) all tendered shares of the Preferred Stock (or a confirmation of
     book-entry transfer of such shares into the Exchange Agent's account at
     DTC) as well as the Letter of Transmittal (or facsimile thereof), properly
     completed and duly executed, with any required signature guarantees, or an
     Agent's Message in connection with a book-entry transfer of shares of the
     Preferred Stock, and any other documents required by the Letter of
     Transmittal, are received by the Exchange Agent within five NYSE trading
     days after the Expiration Time.
 
     A Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Exchange Agent and must include a
signature guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
 
   
     Notwithstanding any other provision hereof, in all cases Debentures will
only be issued in exchange for shares of the Preferred Stock accepted for
exchange pursuant to the Exchange Offer after timely receipt by the Exchange
Agent of certificates for such shares (or a confirmation of book-entry transfer
of such shares into
    
 
                                       18
<PAGE>   24
 
the Exchange Agent's account at DTC as described above), the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other required documents.
 
LETTER OF TRANSMITTAL
 
     The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer.
 
   
     The party tendering shares of the Preferred Stock for exchange (the
"Transferor") exchanges, assigns and transfers such shares of the Preferred
Stock to the Company and irrevocably constitutes and appoints the Exchange Agent
as the Transferor's agent and attorney-in-fact to cause the shares of the
Preferred Stock to be assigned, transferred and exchanged. The Transferor
represents and warrants that it has the full power and authority to tender,
exchange, assign and transfer the shares of the Preferred Stock and to acquire
the Debentures issuable upon the exchange of such tendered shares of the
Preferred Stock in accordance with the terms of the Exchange Offer, and that,
when the same are accepted for exchange, the Company will acquire good and
unencumbered title to the shares of the Preferred Stock free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim. The Transferor also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Company to be necessary or
desirable to complete the exchange, assignment and transfer of shares of the
Preferred Stock or transfer ownership of such shares of the Preferred Stock on
the account books maintained by DTC. All authority conferred by the Transferor
will survive the death, bankruptcy or incapacity of the Transferor and every
obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of such
Transferor.
    
 
WITHDRAWAL RIGHTS
 
     Tenders of shares of the Preferred Stock pursuant to the Exchange Offer are
irrevocable, except that shares of the Preferred Stock tendered pursuant to the
Exchange Offer may be withdrawn at any time prior to the Expiration Time and,
unless theretofore accepted for exchange pursuant to the Exchange Offer, may
also be withdrawn at any time after 40 business days from the date of this
Prospectus.
 
     To be effective, a written notice of withdrawal delivered by mail, hand
delivery or facsimile transmission must be timely received by the Exchange Agent
at the addresses set forth in the Letter of Transmittal. The method of
notification is at the risk and election of the holder. Any such notice of
withdrawal must specify (i) the holder named in the Letter of Transmittal as
having tendered shares of the Preferred Stock to be withdrawn, (ii) if the
shares of the Preferred Stock are held in certificated form, the certificate
numbers of the shares of the Preferred Stock to be withdrawn, (iii) that such
holder is withdrawing its election to have such shares of the Preferred Stock
exchanged, and the name of the registered holder of such shares of the Preferred
Stock, and such notice of withdrawal must be signed by the holder in the same
manner as the original signature on the Letter of Transmittal (including any
required signature guarantees) or be accompanied by evidence satisfactory to the
Company that the person withdrawing the tender has succeeded to the beneficial
ownership of the shares of the Preferred Stock being withdrawn.
 
   
     The Exchange Agent will return the properly withdrawn shares of the
Preferred Stock promptly following receipt of notice of withdrawal. If shares of
the Preferred Stock have been tendered pursuant to the procedure for book-entry
transfer, any notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawn shares of the Preferred Stock
and otherwise comply with DTC's procedures. All questions as to the validity of
a notice of withdrawal, including the time of receipt, will be determined by the
Company, and such determination will be final and binding on all parties.
Withdrawal of tenders of shares of the Preferred Stock may not be rescinded and
any shares of the Preferred Stock withdrawn will not thereafter be deemed to be
validly tendered for the purposes of the Exchange Offer. Properly withdrawn
shares of the Preferred Stock, however, may be retendered by following the
procedures therefor described elsewhere herein at any time prior to the
Expiration Time. See "Procedure for Tendering Preferred Stock" above.
    
 
                                       19
<PAGE>   25
 
   
ACCEPTANCE OF PREFERRED STOCK; ISSUANCE OF DEBENTURES
    
 
   
     The acceptance for exchange of shares of the Preferred Stock validly
tendered and not properly withdrawn will be made as promptly as practicable
after the Expiration Time. The Company expressly reserves the right to terminate
the Exchange Offer and not accept for exchange any of the shares of the
Preferred Stock at any time prior to the Expiration Date for any reason. In
addition, subject to the rules promulgated pursuant to the Exchange Act, the
Company expressly reserves the right to delay acceptance of any of the shares of
the Preferred Stock for exchange, to comply, in whole or in part, with any
applicable law. For purposes of the Exchange Offer, the Company will be deemed
to have accepted for exchange validly tendered and not properly withdrawn shares
of the Preferred Stock if, as and when the Company gives oral or written notice
thereof to the Exchange Agent. Subject to the terms and conditions of the
Exchange Offer, issuance of Debentures for shares of the Preferred Stock
accepted pursuant to the Exchange Offer will be made by the Exchange Agent on
the Issuance Date. The Exchange Agent will act as agent for the tendering
holders of shares of the Preferred Stock for the purposes of receiving
Debentures from the Company. Tendered shares of the Preferred Stock not accepted
for exchange by the Company, if any, will be returned without expense to the
tendering holder of such shares of the Preferred Stock (or, in the case of
shares of the Preferred Stock tendered by book-entry transfer into the Exchange
Agent's account at DTC, such shares will be credited to an account maintained at
DTC) as promptly as practicable following the Expiration Time.
    
 
   
     If the Company extends the Exchange Offer, or for any reason whatsoever,
acceptance for exchange or issuance of Debentures in exchange for any shares of
the Preferred Stock tendered pursuant to the Exchange Offer is delayed, or the
Company is unable to accept for exchange or exchange shares of the Preferred
Stock tendered pursuant to the Exchange Offer, then, without prejudice to the
Company's rights set forth herein, the Exchange Agent may nevertheless, on
behalf of the Company and subject to rules promulgated pursuant to the Exchange
Act, retain tendered shares of the Preferred Stock and such shares may not be
withdrawn except to the extent that the tendering holder of such shares of the
Preferred Stock is entitled to withdrawal rights as described above.
    
 
     No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of a Letter of Transmittal, waive any right to
receive notice of acceptance of their shares of the Preferred Stock for
exchange.
 
ACCRUED DIVIDENDS
 
   
     Holders of shares of the Preferred Stock accepted for exchange in the
Exchange Offer will receive cash in the amount of the Payment in Lieu of
Accumulated Dividends, payable on the Issuance Date to such holders.
    
 
     Dividends on shares of the Preferred Stock not exchanged in the Exchange
Offer will continue to accrue and be payable when, as and if declared in
accordance with the terms of the shares of the Preferred Stock.
 
DEALER MANAGERS
 
     Lehman Brothers and Morgan Stanley & Co. Incorporated are acting as Dealer
Managers for the Exchange Offer under a Dealer Managers Agreement dated
            , 1995 (the "Dealer Managers Agreement"). The Company has agreed to
pay the Dealer Managers predetermined compensation for their services in
connection with the Exchange Offer and to reimburse the Dealer Managers for all
of their reasonable out-of-pocket expenses, including the reasonable fees and
expenses of their legal counsel.
 
     The Dealer Managers have agreed to use their best efforts to solicit the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer.
 
     The Company has agreed to indemnify the Dealer Managers against certain
liabilities, including certain liabilities under the federal securities laws.
 
FEES AND EXPENSES; TRANSFER TAXES
 
     The expenses of soliciting tenders of the shares of the Preferred Stock
will be borne by the Company. For compensation to be paid to the Dealer
Managers, see "Exchange Offer -- Dealer Managers".
 
     The Company will pay to a Soliciting Dealer (as hereinafter defined) a
solicitation fee of $.50 per share of the Preferred Stock for any share of the
Preferred Stock tendered and accepted for exchange pursuant to the Exchange
Offer if such Soliciting Dealer has solicited and obtained such tender.
"Soliciting Dealer"
 
                                       20
<PAGE>   26
 
includes (i) any broker or dealer in securities, including the Dealer Managers
in their capacity as a broker or dealer, which is a member of any national
securities exchange or of the National Association of Securities Dealers, Inc.
(the "NASD"), (ii) any foreign broker or dealer not eligible for membership in
the NASD which agrees to conform to the NASD's Rules of Fair Practice in
soliciting tenders outside the United States to the same extent as though it
were an NASD member or (iii) any bank or trust company. In order for a
Soliciting Dealer to receive a solicitation fee with respect to the tender of
shares of the Preferred Stock, the Exchange Agent must have received a Letter of
Transmittal with the portion thereof entitled "Notice of Solicited Tenders"
properly completed and duly executed.
 
     No such fee shall be payable to a Soliciting Dealer if such Soliciting
Dealer is required for any reason to transfer the amount of such fee to a
tendering holder (other than itself). The Dealer Managers may not, until the
Expiration Time, buy, sell, deal or trade in the shares of the Preferred Stock
for their own account. No broker, dealer, bank, trust company or fiduciary shall
be deemed to be the agent of the Company, the Exchange Agent, the Dealer
Managers or the Information Agent for purposes of the Exchange Offer.
 
   
     The Company will pay any transfer taxes with respect to transfer and
exchange of shares pursuant to the Exchange Offer. If, however, the Debentures
due in respect of the shares of the Preferred Stock accepted for exchange are to
be issued to, or (in the circumstances permitted hereby) if certificates for
shares of the Preferred Stock not tendered or not exchanged and paid for are to
be registered in the name of, any person other than the person signing the
Letter of Transmittal, the amount of any transfer taxes (whether imposed on the
registered holder or such person) payable on account of the transfer to such
person will be deducted from the Debentures due in respect of the shares of the
Preferred Stock accepted for exchange if satisfactory evidence of the payment of
such taxes, or exemption therefrom, is not submitted.
    
 
     Assuming all outstanding shares of the Preferred Stock are exchanged
pursuant to the Exchange Offer, it is estimated that the expenses incurred by
the Company in connection with the Offers (other than the solicitation fee of
$.50 per share of the Preferred Stock described above) will aggregate
approximately $          . The Company will be responsible for paying all such
expenses and anticipates that they will be paid from available cash of the
Company.
 
EXCHANGE AGENT AND INFORMATION AGENT
 
     First Chicago Trust Company of New York will act as exchange agent for the
Exchange Offer. All correspondence in connection with the Exchange Offer, the
Letter of Transmittal and the Notice of Guaranteed Delivery should be addressed
to the Exchange Agent as follows:
 
                    FIRST CHICAGO TRUST COMPANY OF NEW YORK
 
<TABLE>
<S>                                           <C>
          BY HAND/OVERNIGHT COURIER                              BY MAIL
             Tenders & Exchanges                           Tenders & Exchanges
                Suite 4680-WC                                 P.O. Box 2559
          14 Wall Street, 8th Floor                        Mail Suite 4660-WCI
              New York, NY 10005                          Jersey City, NJ 07303
</TABLE>
 
                             Facsimile Transmission
                        (For Eligible Institutions Only)
                                 (201) 222-4720
                                 (201) 222-4721
 
                             Confirm by Telephone:
                                 (201) 222-4707
 
               Shareholder Inquiries Regarding Lost Certificates:
                                 1-201-324-0137
 
     The Exchange Agent is also the transfer agent for the Preferred Stock and
the common stock of the Company, a lender under the Credit Agreement dated as of
February 23, 1995 among the Company and
 
                                       21
<PAGE>   27
 
certain of its subsidiaries and the banks named therein, and provides cash
management services to the Company and its subsidiaries.
 
     Morrow & Co., Inc. will act as Information Agent for the Exchange Offer. In
such capacity, the Information Agent will assist with the mailing of the
Prospectus and related materials to holders of shares of the Preferred Stock,
respond to inquiries of and provide information to holders of shares of the
Preferred Stock in connection with the Exchange Offer and provide other similar
advisory services as the Company may request from time to time. All inquiries
relating to the Exchange Offer should be directed to the Information Agent as
follows:
 
                               MORROW & CO., INC.
 
<TABLE>
<S>                                           <C>
               909 Third Avenue                       14755 Preston Road, Suite 725
           New York, New York 10022                        Dallas, Texas 75240
 
                             Banks and Brokers call toll-free:
                                       1-800-662-5200
                                 All others call toll-free:
                                       1-800-566-9058
</TABLE>
 
     The Company will pay the Information Agent and the Exchange Agent their
reasonable and customary compensation for their services in connection with the
Exchange Offer. In addition, the Company will reimburse the Exchange Agent and
the Information Agent for their reasonable out-of-pocket expenses, and will
indemnify the Exchange Agent and the Information Agent against certain
liabilities and expenses in connection with their services, including certain
liabilities under the federal securities laws. The Company will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to beneficial holders of shares of the Preferred Stock,
and in handling or forwarding tenders or consents for their customers.
 
     Directors, officers and regular employees of the Company, none of whom will
be specifically compensated for such services, may contact holders of shares of
the Preferred Stock by mail, telephone, facsimile transmission, telex, telegraph
and personal interviews regarding the Exchange Offer, and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward this
Prospectus (and all related materials) to beneficial owners of shares of the
Preferred Stock.
 
                                       22
<PAGE>   28
 
                         MARKET AND TRADING INFORMATION
 
     The shares of the Preferred Stock are listed and traded on the NYSE. The
following table sets forth for the calendar periods indicated the high and low
closing sales prices for the shares of the Preferred Stock per share as reported
in published financial sources and the dividends paid on such shares:
 
   
<TABLE>
<CAPTION>
                                                                                  DIVIDENDS
                                                                                     PAID
                                                             HIGH      LOW       PER SHARE(1)
                                                             ---       ---       ------------
    <S>                                                      <C>       <C>       <C>
    1993:
      First Quarter........................................  26 3/4    24 5/8        .5525
      Second Quarter.......................................  27 7/8    25 7/8        .5525
      Third Quarter........................................  27 3/8    26 3/8        .5525
      Fourth Quarter.......................................  27 1/2    25 7/8        .5525
 
    1994:
      First Quarter........................................  26 7/8    24 7/8        .5525
      Second Quarter.......................................  26 1/8    24 1/2        .5525
      Third Quarter........................................  26 1/4    25            .5525
      Fourth Quarter.......................................  25 3/8    24 1/8        .5525
 
    1995:
      First Quarter........................................  26 1/8    24 1/8        .5525
      Second Quarter (through             )................                          .5525
</TABLE>
    
 
- ---------------
(1) An annual cash dividend of $2.21 per share is payable in quarterly
    installments on March 1, June 1, September 1 and December 1 when and if
    declared by the Board of Directors.
 
   
     On             , 1995, the last full day the shares of the Preferred Stock
traded prior to the commencement of the Exchange Offer, the closing sales price
of the shares of the Preferred Stock on the NYSE as reported on the Composite
Tape was $     per share. There can be no assurance concerning the prices at
which the shares of the Preferred Stock might be traded following the Exchange
Offer. The exchange of shares of the Preferred Stock pursuant to the Exchange
Offer will reduce the number of shares of the Preferred Stock that might
otherwise trade publicly and the number of holders of such shares, and depending
on the number of shares of the Preferred Stock exchanged, could adversely affect
the liquidity and market value of the remaining shares of the Preferred Stock
held by the public. Depending upon the number of shares of the Preferred Stock
exchanged pursuant to the Exchange Offer, the Preferred Stock may no longer meet
the requirements of the NYSE for continued listing and may no longer continue to
be registered under the Exchange Act, either of which could adversely affect the
market for the Preferred Stock. See "Special Factors -- Certain Effects of the
Exchange Offer; Plans of the Company after the Exchange Offer".
    
 
     HOLDERS OF SHARES OF THE PREFERRED STOCK ARE URGED TO OBTAIN CURRENT
INFORMATION WITH RESPECT TO THE SALES PRICES OF SHARES OF THE PREFERRED STOCK.
 
   
     There has not been any public market for the Debentures. While the Company
intends to list the Debentures on the NYSE, there can be no assurance that an
active market for the Debentures will develop or be sustained in the future on
such exchange. Listing will depend upon the satisfaction of the NYSE's listing
requirements with respect to the Debentures, including requirements as to the
principal amount and distribution of the Debentures. Although the Dealer
Managers have indicated to the Company that they intend to make a market in the
Debentures as permitted by applicable laws and regulations, they are not
obligated to do so and may discontinue any such market-making at any time
without notice. Accordingly, no assurance can be given as to the liquidity of,
or trading market for, the Debentures.
    
 
                                       23
<PAGE>   29
 
                    TRANSACTIONS AND ARRANGEMENTS CONCERNING
                       THE SHARES OF THE PREFERRED STOCK
 
     The shares of the Preferred Stock were issued by the Company in an
underwritten public offering for cash which was registered under the Securities
Act. The offering, which closed on September 3, 1992, was for 4,000,000 shares
of the Preferred Stock at a price to the public of $25.00 per share and the
Company received aggregate proceeds of $96,500,000 after deducting the aggregate
underwriting discount of $3,500,000, but before expenses.
 
     Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any of
the directors or executive officers of the Company or any of its subsidiaries,
nor any associates of any of the foregoing, has effected any transactions in the
Preferred Stock since the issuance of the Preferred Stock in 1992, except that
the Company has effected open-market purchases of 369,900 shares of Preferred
Stock for an aggregate price (not including commissions) of $9,274,368 (average
per share price of $25.15) and except that the spouse of a former director
purchased 2,000 shares of the Preferred Stock on the open market in 1992 (at a
price of $25 7/8 per share) and 500 shares of the Preferred Stock on the open
market in 1994 (at a price of $25 per share).
 
   
     Except as set forth in this Exchange Offer, neither the Company nor, to the
best of the Company's knowledge, any of its affiliates, directors or executive
officers or any of the executive officers or directors of its subsidiaries, is a
party to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly, to the Exchange Offer with respect to
any securities of the Company (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer of the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or the giving or withholding
of proxies, consents or authorizations). As of                , 1995, neither
the Company nor any subsidiary or affiliate nor, to the Company's knowledge, any
of their respective directors or executive officers, owns any of the shares of
the Preferred Stock, except for 780 shares of the Preferred Stock owned by Keith
E. Bailey, Chairman of the Board, Chief Executive Officer, President and
Director of the Company, 4,000 shares of the Preferred Stock owned by the spouse
of Robert J. LaFortune, Director of the Company, and 2,000 shares of the
Preferred Stock owned by a trust of which Robert J. LaFortune is a beneficiary.
Mr. Bailey and Mr. LaFortune presently intend to exchange their securities in
the Exchange Offer.
    
 
                         CERTAIN UNITED STATES FEDERAL
                            INCOME TAX CONSEQUENCES
 
   
     The following summary, which is based on the opinion by the Company's tax
counsel, Miller & Chevalier, Chartered, addresses the material federal tax
consequences of the exchange of the Preferred Shares and the ownership of
Debentures. It deals only with Debentures held as capital assets and acquired
pursuant to the Exchange Offer and does not deal with special situations, such
as those of dealers in securities or currencies, financial institutions, life
insurance companies, persons holding Debentures as a part of a hedging or
conversion transaction or a straddle, United States Holders (as defined below)
whose "functional currency" is not the U.S. dollar, or Non-United States Holders
(as defined below) who own (actually or constructively) ten percent or more of
the combined voting power of all classes of voting stock of the Company or whose
ownership of Debentures is effectively connected with the conduct of a trade or
business in the United States. Furthermore, the discussion below is based upon
the provisions of the Internal Revenue Code of 1986, as amended (the "Code") and
regulations, rulings and judicial decisions thereunder as of the date hereof,
and such authorities may be repealed, revoked or modified so as to result in
federal income tax consequences different from those discussed below. PERSONS
CONSIDERING THE PURCHASE, OWNERSHIP OR DISPOSITION OF DEBENTURES SHOULD CONSULT
THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES IN LIGHT
OF THEIR PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE
LAWS OF ANY OTHER TAXING JURISDICTION.
    
 
   
     UNITED STATES HOLDERS.  As used herein, a "United States Holder" means a
beneficial owner of Debentures that is a citizen or resident of the United
States, a corporation, partnership or other entity created
    
 
                                       24
<PAGE>   30
 
   
or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source. A "Non-United
States Holder" means a beneficial owner of Debentures that is not a United
States Holder.
    
 
   
     Exchange of Preferred Stock for Debentures.  The exchange of Preferred
Stock for Debentures pursuant to the Exchange Offer will be a taxable
transaction. In the case of a United States Holder who owns (actually or
constructively) solely shares of the Preferred Stock, or not more than one
percent of the Preferred Stock and not more than one percent of any other class
of the Company's stock, gain or loss will be recognized in an amount equal to
the difference between (i) the fair market value of the Debentures on the
Issuance Date (if the Debentures are traded on an established market) or the
fair market value on the Issuance Date of the Preferred Stock exchanged for the
Debentures (if the Debentures are not traded on an established market) and (ii)
the exchanging holder's tax basis in the Preferred Stock exchanged therefor and
will be long-term capital gain or loss if the Preferred Stock has been held for
more than one year as of such date. Section 302 of the Code. A United States
Holder's aggregate tax basis in the Debentures will be equal to the fair market
value on the Issuance Date of either the Debentures or the Preferred Stock,
depending on whether the Debentures are traded on an established market.
    
 
   
     United States Holders of Preferred Stock owning (actually or
constructively) more than one percent of any other class of the Company's stock
may be treated either as recognizing gain or loss on the exchange of Preferred
Stock for Debentures or as receiving a dividend distribution from the Company,
depending on such Holders' particular circumstances. Such United States Holders
are advised to consult their own tax advisers as to the income tax consequences
of exchanging Preferred Stock for Debentures.
    
 
     In determining whether a United States Holder of Preferred Stock owns
solely shares of the Preferred Stock, or not more than one percent of the
Preferred Stock and not more than one percent of any other class of the
Company's stock, the United States Holder must take into account not only the
Preferred Stock and other stock of the Company that such Holder actually owns,
but also Preferred Stock and other stock of the Company that such Holder
constructively owns under Section 318 of the Code. Under Section 318, a United
States Holder may constructively own Preferred Stock and other stock of the
Company actually owned, and in some cases constructively owned, by certain
related individuals or entities, and Preferred Stock and other stock of the
Company that the Holder has the right to acquire by exercise of an option.
United States Holders should consult their own tax advisors about the
application of the constructive ownership rules of Section 318 to their
particular situations.
 
   
     Original Issue Discount.  Under the terms of the Debentures, the Company
has the option to defer payments of interest for up to 20 consecutive quarterly
interest payment periods and to pay as a lump sum at the end of such period all
of the interest that has accrued during such period. Because of this option to
extend the interest payment periods, the Debentures will be issued with
"original issue discount" ("OID"). A debt instrument bears OID if its "stated
redemption price at maturity" exceeds its "issue price" by more than a de
minimis amount. Section 1273 of the Code; Treasury Regulation Section 1.1273-1.
The issue price of the Debentures will be their fair market value on the
Issuance Date (if the Debentures are traded on an established market) or the
fair market value on the Issuance Date of the Preferred Stock exchanged for the
Debentures (if the Debentures are not traded on an established market). The
stated redemption price at maturity of a debt instrument generally includes all
amounts payable other than "qualified stated interest," which is defined as
payments that are unconditionally payable at least annually during the entire
term of the debt obligation at a single fixed rate of interest. Because of the
Company's option to defer payments of interest with respect to the Debentures,
none of the payments of stated interest on the Debentures will constitute
qualified stated interest. Thus, the Debentures will have OID in an amount equal
to the excess of all payments required to be made with respect to the Debentures
over their issue price.
    
 
   
     A United States Holder will be required to include OID in income on a
current basis, in accordance with a constant yield method based on a compounding
of interest, even if such United States Holder is on the cash method of
accounting. Consequently, in the event that an interest payment period is
extended, a United States Holder will be required to include OID in income
notwithstanding that the Company will not make any interest payments on the
Debentures. A United States Holder will not recognize any income on the receipt
of
    
 
                                       25
<PAGE>   31
 
   
stated interest with respect to the Debentures. A United States Holder's tax
basis in the Debentures will be increased by the amount of OID includible in
income and reduced by all payments received with respect to the Debentures.
    
 
   
     As stated above, the issue price of the Debentures will be either their
fair market value on the Issuance Date or the fair market value on the Issuance
Date of the Preferred Stock exchanged for the Debentures, depending on whether
the Debentures are traded on an established market. Because the issue price of
the Debentures may not equal their principal amount, the yield on the Debentures
as computed for purposes of applying the OID rules may differ from the stated
interest rate on the Debentures. On the basis of current market prices and the
advice of the Dealer Managers, the Company expects that the issue price of the
Debentures will exceed their principal amount. If this expectation proves to be
correct, the amount of OID includible in income by a United States Holder for
any quarter will be less than the interest payment on the Debentures for that
quarter. If, on the other hand, the issue price of the Debentures is less than
their principal amount, the amount of OID includible in income by a United
States Holder for any quarter will exceed the interest payment on the Debentures
for that quarter.
    
 
   
     Under applicable Treasury Regulations, for purposes of computing a debt
instrument's yield to maturity, the issuer is deemed to elect to exercise any
unconditional option available to it under the instrument if doing so would
minimize the yield on the instrument. If the issuer does not exercise such an
option, then, solely for purposes of determining the accrual of OID, the yield
and maturity of the instrument are redetermined by treating the instrument as
reissued for an amount equal to its adjusted issue price. The Company's
calculations of OID on the Debentures will reflect the Company's assumption, as
of the Issuance Date and solely for purposes of calculating OID on the
Debentures, as to whether the Company will exercise its right to redeem the
Debentures in 1997.
    
 
   
     Sale, Exchange or Retirement of the Debentures.  Upon the sale, exchange or
retirement of Debentures, a United States Holder will recognize gain or loss
equal to the difference between the amount realized upon the sale, exchange or
retirement and the adjusted tax basis of the Debentures. A United States
Holder's adjusted tax basis in the Debentures will, in general, be the United
States Holder's initial basis therefor, increased by OID previously included in
income by the United States Holder and reduced by any cash payments on the
Debentures. Such gain or loss will be capital gain or loss and will be long-term
capital gain or loss if at the time of sale, exchange or retirement, the
Debentures have been held for more than one year. Under current law, net capital
gains of individuals are, under certain circumstances, taxed at lower rates than
items of ordinary income. The deductibility of capital losses is subject to
limitations.
    
 
   
     NON-UNITED STATES HOLDERS.  The following summary of the United States
federal income tax consequences of ownership of Debentures by Non-United States
Holders does not address (i) a Non-United States Holder who owns (actually or
constructively) ten percent or more of the combined voting power of all classes
of voting stock of the Company or (ii) a Non-United States Holder whose
ownership of Debentures is effectively connected with such Holder's conduct of a
trade or business in the United States. NON-UNITED STATES HOLDERS WHO OWN
(ACTUALLY OR CONSTRUCTIVELY) TEN PERCENT OR MORE OF THE COMPANY'S VOTING POWER
OR WHOSE OWNERSHIP OF DEBENTURES IS EFFECTIVELY CONNECTED WITH A CONDUCT OF A
TRADE OR BUSINESS IN THE UNITED STATES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE UNITED STATES FEDERAL TAX CONSEQUENCES, AS WELL AS
OTHER TAX CONSEQUENCES, OF OWNERSHIP OF DEBENTURES.
    
 
   
     Exchange of Preferred Stock for Debentures.  Subject to the discussion
below concerning backup withholding, if a Non-United States Holder certifies to
the Company that such Holder owns (actually or constructively) solely shares of
the Preferred Stock, or not more than one percent of the shares of the Preferred
Stock and not more than one percent of any other class of the Company's stock,
the Company will not withhold United States federal income tax on the issuance
of Debentures to such Holder in exchange for Preferred Stock. In determining
whether it can make this certification, a Non-United States Holder must take
into account not only the Preferred Stock and other stock of the Company that
such Holder actually owns, but also Preferred Stock and other stock of the
Company that such Holder constructively owns under Section 318 of the Code. See
"United States Holders -- Exchange of Preferred Stock for Debentures" above.
Non-United
    
 
                                       26
<PAGE>   32
 
States Holders should consult their own United States tax advisors with respect
to the application of the constructive ownership rules of Section 318 to their
particular situations.
 
   
     If a Non-United States Holder makes the certification described above, any
gain recognized by such Holder on the exchange of Preferred Stock for Debentures
will generally not be subject to United States federal income tax unless (i)
such Holder is an individual who is present in the United States for 183 days or
more in the taxable year of the exchange and certain other conditions are met or
(ii) the Company is, or has been at any time during the five-year period ending
on the Issuance Date, a "United States real property holding corporation and, at
any time during such five-year period, such Holder owned (actually or
constructively) more than five percent of the Preferred Stock. The Company has
not determined whether it is, or has been, a United States real property holding
corporation. Non-United States Holders who have owned (actually or
constructively) more than five percent of the Preferred Stock at any time during
the past five years should consult their own United States tax advisors.
    
 
   
     If a Non-United States Holder does not provide the certification described
above, the Company will treat the fair market value of the Debentures (or, if
the Debentures are not traded on an established market, the fair market value of
the Preferred Stock exchanged for the Debentures) on the Issuance Date as a
dividend and will withhold federal income tax at a rate of 30% of this amount
unless such Non-United States Holder is entitled to a reduced rate of
withholding tax under the provisions of an income tax treaty, in which case the
tax will be withheld at the reduced rate. If the Company collects United States
withholding tax on the exchange of Preferred Stock for Debentures, a Non-United
States Holder may be eligible to obtain a refund of such tax from the Internal
Revenue Service if it establishes that the exchange does not give rise to
dividend income, as described above under "United States Holders -- Exchange of
Preferred Stock for Debentures" or otherwise establishes a complete or partial
exemption from such withholding tax.
    
 
   
     Payments on Debentures.  Subject to the discussion of backup withholding
below, no withholding of United States federal income tax will be imposed with
respect to the payment by the Company or its paying agent of principal or
interest (which for purposes of this discussion includes OID) on Debentures to a
Non-United States Holder, provided that (i) such Non-United States Holder is not
a controlled foreign corporation that is related to the Company through stock
ownership, (ii) such Non-United States Holder is not a bank whose receipt of
interest on the Debentures is described in Section 881(c)(3)(A) of the Code and
(iii) either (y) such Non-United States Holder certifies to the Company or its
agent, under the penalties of perjury, that it is not a United States person and
provides its name and address on Form W-8 or its equivalent or (z) a financial
institution holding the Debentures on behalf of such Non-United States Holder
certifies to the Company or its agent, under penalties of perjury, that such
statement has been received by it and furnishes the Company or its agent with a
copy thereof.
    
 
   
     Sale, Exchange or Retirement of the Debentures.  Subject to the discussion
of backup withholding below, no United States federal income tax, including
withholding tax, will be imposed with respect to any gain realized by a
Non-United States Holder upon the sale, exchange or retirement of Debentures
unless such Holder is an individual who is present in the United States for 183
days or more in the taxable year of such sale, exchange or retirement and
certain other conditions are met.
    
 
   
     Federal Estate Taxes.  Debentures beneficially owned by an individual who
at the time of death is a Non-United States Holder will not be subject to United
States federal estate tax as a result of such individual's death, provided that
the income on such Debentures would not have been, if received at the time of
such individual's death, effectively connected with the conduct of a trade or
business by such individual in the United States.
    
 
   
     BACKUP WITHHOLDING AND INFORMATION REPORTING.  In general, information
reporting may apply to (i) the Debentures issued in exchange for Preferred Stock
pursuant to the Exchange Offer, (ii) principal and interest (including OID) on
the Debentures, and (iii) the proceeds of sale of the Debentures if any such
payments are made to United States Holders other than certain exempt recipients
(such as corporations). A 31 percent backup withholding tax will apply to
payments described in the preceding sentence unless the United States Holder
provides a taxpayer identification number and otherwise complies with applicable
backup withholding rules.
    
 
                                       27
<PAGE>   33
 
   
     No information reporting on IRS Form 1099 OID or backup withholding will be
required with respect to payments of principal and interest (including OID) on
the Debentures made by the Company or any paying agent to a Non-United States
Holder if the statement described in (iii) under "Non-United States Holders --
Payments on Debentures" has been received and the payor does not have actual
knowledge that the beneficial owner is a United States person. However, interest
(including OID) on Debentures owned by Non-United States Holder will be required
to be reported annually on IRS Form 1042S.
    
 
   
     Payments of the proceeds of the sale by a Non-United States Holder of
Debentures, and the exchange of Preferred Stock for Debentures pursuant to the
Exchange Offer, made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that if the
broker is, for federal income tax purposes, a United States person, a controlled
foreign corporation or a foreign person that derives 50% or more of its gross
income for a specified three-year period from the conduct of a trade or business
in the United States, such payments will not be subject to backup withholding
but may be subject to information reporting. Any such payments made to or
through the United States office of a broker will be subject to information
reporting and backup withholding unless the Non-United States Holder or the
beneficial owner certifies as to its non-United States status or otherwise
establishes an exemption.
    
 
     Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against the Holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
 
   
                           DESCRIPTION OF DEBENTURES
    
 
   
     The Debentures will constitute a series of notes issued under the
Subordinated Debt Indenture, dated as of               , 1995 (the "Indenture"),
between the Company and Chemical Bank, as trustee (the "Trustee"). The following
statements with respect to the Debentures are summaries and are subject to the
detailed provisions of the Trust Indenture Act and the Indenture, a copy of the
form of which has been filed as an exhibit to the Registration Statement. The
following summarizes the material provisions of the Indenture. The summaries do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Debentures and the
Indenture, including the definitions therein of certain terms capitalized and
not otherwise defined in this Prospectus. Wherever references are made to
particular provisions of the Indenture or terms defined therein, such provisions
or definitions are incorporated by reference as part of the statements made and
such statements are qualified in their entirety by such references.
    
 
   
     The Indenture does not limit the amount of debt securities, debentures,
notes or other evidences of indebtedness that may be issued by the Company or
any of its Subsidiaries. The Indenture defines "Subsidiary" to mean any
corporation at least a majority of the outstanding securities of which having
ordinary voting power shall be owned by the Company and/or another Subsidiary or
Subsidiaries. All of the operating assets of the Company and its Subsidiaries
are owned by its Subsidiaries. Therefore, the Company's rights and the rights of
its creditors, including holders of Debentures, to participate in the assets of
any Subsidiary upon the latter's liquidation or recapitalization will be subject
to the prior claims of the Subsidiary's creditors, except to the extent that the
Company may itself be a creditor with recognized claims against the Subsidiary.
The ability of the Company to pay principal of and interest on the Debentures
is, to a large extent, dependent upon the receipt by it of dividends or other
payments from its Subsidiaries.
    
 
   
     The Indenture provides that additional debt securities may be issued from
time to time thereunder in one or more series without limitation as to aggregate
principal amount. The Indenture does not contain any covenant or other provision
which would afford holders of the Debentures protection in the event of a highly
leveraged transaction involving the Company or any Subsidiary.
    
 
GENERAL
 
   
     The Debentures will constitute a series of unsecured, subordinated debt
securities, will be subordinated to Senior Indebtedness of the Company, as
described herein, will be limited in aggregate principal amount to the aggregate
principal amount of Debentures issued in the Exchange Offer and will mature on
              ,
    
 
                                       28
<PAGE>   34
 
   
2025 (the "Stated Maturity"). The annual interest requirement on the Debentures
(assuming shares of the Preferred Stock are exchanged) will be $          .
    
 
QUARTERLY PAYMENTS
 
   
     Interest on the Debentures will accrue from the Issuance Date at a rate of
     % per annum and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year commencing September 30, 1995, to the
persons in whose names the Debentures are registered on the relevant record
dates, which will be March 15, June 15, September 15 and December 15,
respectively (each a "Record Date").
    
 
   
     The amount of interest payable for any period will be computed on the basis
of twelve 30-day months and a 360-day year and, for any period shorter than a
full quarterly interest period, will be computed on the basis of the actual
number of days elapsed in such period. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of the
amount payable on such date will be made on the next succeeding day which is a
Business Day (and without interest or other payment in respect of any such
delay) with the same force and effect as if made on such date, subject to
certain rights of deferral described below. A "Business Day" shall mean any day
other than a day on which banking institutions in the State of New York are
authorized or obligated pursuant to law or executive order to close.
    
 
PAYMENT DEFERRAL
 
   
     The Company shall have the right at any time, on one or more occasions, so
long as an Event of Default (as hereinafter defined) has not occurred and is not
continuing under the Indenture with respect to the Debentures, to extend any
interest payment period on the Debentures to a period not to exceed 20
consecutive quarterly interest payment periods and, as a consequence, the
quarterly interest payments on the Debentures would be deferred (but would
continue to accrue with interest thereon at the rate of interest on the
Debentures) during any such Deferral Period. At the end of each Deferral Period,
the Company shall pay all interest then accrued and unpaid (compounded
quarterly). In the event the Company exercises this right, the Company shall not
declare or pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its Capital Stock or make any
guarantee payments with respect to the foregoing during such Deferral Period.
Therefore, the Company believes that the extension of a quarterly interest
payment period on the Debentures is unlikely. During any Deferral Period, the
Company may continue to extend the interest payment period by extending the
Deferral Period; provided that the aggregate Deferral Period, as extended, must
end on an Interest Payment Date and must not exceed 20 consecutive quarterly
interest payment periods or extend beyond the maturity of the Debentures or any
date on which the Debentures are fixed for redemption. The Company shall give
the holders of Debentures notice of its election to defer payments or to extend
the Deferral Period ten Business Days prior to the earlier of (i) the next
scheduled quarterly payment date and (ii) the date the Company is required to
give notice of the record date of such related interest payment to the NYSE or
other applicable self-regulatory organization or to the holders of the
Debentures, but in any event not less than two Business Days prior to such
record date.
    
 
OPTIONAL REDEMPTION
 
   
     The Debentures will be redeemable at the option of the Company, in whole or
in part, at any time on or after September 1, 1997 and prior to maturity, upon
not less than 30 nor more than 60 days' notice, at a redemption price equal to
100% of the principal amount redeemed plus accrued and unpaid interest to the
date fixed for redemption. If fewer than all the Debentures are redeemed, the
Trustee under the Indenture shall select an appropriate and fair manner pursuant
to which the Debentures shall be redeemed.
    
 
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
 
     The Company can discharge or defease its obligations under the Indenture as
set forth below.
 
   
     Upon satisfaction of certain terms of the Indenture, the Company may
discharge certain obligations to holders of the Debentures which have not
already been delivered to the Trustee for cancellation and which have either
become due and payable or are by their terms due and payable within one year (or
scheduled for
    
 
                                       29
<PAGE>   35
 
   
redemption within one year) by irrevocably depositing with the Trustee cash or
U.S. Government Obligations (as defined in the Indenture) as trust funds in an
amount certified to be sufficient to pay at maturity (or upon redemption) the
principal of and interest on the Debentures.
    
 
   
     The Company may also, upon satisfaction of the conditions listed below,
discharge certain obligations to holders of Debentures at any time
("defeasance"). Upon satisfaction of certain terms of the Indenture, the Company
may instead be released with respect to the Debentures from the obligations
imposed by Section 9.1 of the Indenture (which contains the covenant described
below limiting consolidations, mergers and conveyances of assets), and omit to
comply with such Section without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (i) the Company irrevocably deposits with the Trustee cash or U.S.
Government Obligations, as trust funds in an amount certified to be sufficient
to pay at maturity (or upon redemption) the principal of and interest on all
outstanding Debentures; (ii) the Company delivers to the Trustee an opinion of
counsel to the effect that the holders of the Debentures will not recognize
income, gain or loss for United States federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to United States
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if defeasance or covenant defeasance had not
occurred (in the case of a defeasance, such opinion must be based on a ruling of
the Internal Revenue Service or a change in United States federal income tax law
occurring after the date of the Indenture, since such a result would not occur
under current tax law); and (iii) (a) no event or condition shall exist that,
pursuant to certain provisions described under "Subordination" below, would
prevent the Company from making payments of principal of or interest on the
Debentures at the date of the irrevocable deposit referred to above or at any
time during the period ending on the 91st day after such deposit date and (b)
the Company delivers to the Trustee an opinion of counsel to the effect (1) the
trust funds will not be subject to any rights of holders of Senior Indebtedness
and (2) after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally, except that if a court
were to rule under any such law in any case or proceeding that the trust funds
remained property of the Company, then the Trustee and the holders of the
Debentures would be entitled to certain rights as secured creditors in such
trust funds.
    
 
EVENTS OF DEFAULT
 
   
     An Event of Default is defined under the Indenture with respect to
Debentures as being: (a) default in payment of any principal of the Debentures,
either at maturity, upon any redemption, by declaration or otherwise; (b)
default for 30 days in payment of any interest on the Debentures; (c) default
for 90 days after written notice in the observance or performance of any
covenant or warranty in the Debentures or the Indenture other than (i) a
covenant or default in the performance of which, or breach of which, is dealt
with otherwise below or, (ii) if the default described in this clause (c) is the
result of changes in generally accepted accounting principles; or (d) certain
events of bankruptcy, insolvency or reorganization of the Company.
    
 
   
     The Indenture provides that, (a) if an Event of Default described in
clauses (a), (b) or (c) above (if the Event of Default under clause (c) is with
respect to less than all series of debt securities then outstanding under the
Indenture) occurs, the Trustee or the holders of not less than 25 percent in
principal amount of the outstanding Debentures may then declare the entire
principal of all outstanding Debentures and interest accrued thereon to be due
and payable immediately and (b) if an Event of Default due to a default
described in clause (c) above which is applicable to all series of debt
securities then outstanding under the Indenture or due to certain events of
bankruptcy, insolvency and reorganization of the Company, shall have occurred
and be continuing, the Trustee or the holders of not less than 25 percent in
principal amount of all securities then outstanding under the Indenture (treated
as one class) may declare the entire principal of all outstanding Debentures and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
[(except a continuing default in payment of principal of, premium, if any, or
interest on such debt securities)] by the holders of a majority in aggregate
principal amount of the outstanding Debentures or by the holders of a majority
in aggregate principal amount of all securities then outstanding (treated as one
class), as applicable.
    
 
                                       30
<PAGE>   36
 
   
     The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of care,
to be indemnified by the holders of Debentures issued under the Indenture before
proceeding to exercise any right or power under the Indenture at the request of
such holders. Subject to such provisions in the Indenture for the
indemnification of the Trustee and certain other limitations, the holders of a
majority in aggregate principal amount of the outstanding Debentures issued
under the Indenture may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee.
    
 
   
     The Indenture provides that no holder of Debentures issued under the
Indenture may institute any action against the Company under the Indenture
(except actions for payment of overdue principal or interest) unless such holder
previously shall have given to the Trustee written notice of default and
continuance thereof and unless the holders of not less than 25 percent in
principal amount of the outstanding Debentures issued under the Indenture shall
have requested the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity and the Trustee shall not have instituted such
action within 60 days of such request and the Trustee shall not have received
direction inconsistent with such written request by the holders of a majority in
principal amount of the outstanding Debentures issued under the Indenture.
    
 
     The Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any default
that exists.
 
MODIFICATION AND WAIVER
 
   
     The Indenture provides that the Company and the Trustee may enter into
supplemental indentures (which conform to the provisions of the Trust Indenture
Act) without the consent of the holders to: (a) secure any debt securities
issued thereunder (including the Debentures); (b) evidence the assumption by a
successor of the obligations of the Company; (c) add further covenants for the
protection of the holders; (d) cure any ambiguity or correct any inconsistency
in the Indenture, so long as such action will not adversely affect the interests
of the holders; (e) establish the form or terms of debt securities of any
series; or (f) evidence the acceptance of appointment by a successor trustee.
    
 
     The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than the majority in
principal amount of debt securities of each series issued under the Indenture
then outstanding and affected (voting as one class) to add any provisions to, or
change in any manner or eliminate any of the provisions of, the Indenture or
modify in any manner the rights of the holders of the debt securities of each
series so affected; provided that such changes conform to provisions of the
Trust Indenture Act and provided that the Company and the Trustee may not,
without the consent of each holder of outstanding debt securities affected
thereby, (a) extend the final maturity or the principal of any debt securities,
or reduce the principal amount thereof or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or change the currency in which the principal thereof (including any amount in
respect of original issue discount) or interest thereon is payable, or reduce
the amount of any original issue discount security payable upon acceleration or
provable in bankruptcy or alter certain provisions of the Indenture relating to
debt securities not denominated in U.S. dollars or for which conversion to
another currency is required to satisfy the judgment of any court, or impair the
right to institute suit for the enforcement of any payment on any debt
securities when due or (b) reduce the aforesaid percentage in principal amount
of debt securities of any series issued under the Indenture, the consent of the
holders of which is required for any such modification.
 
   
     The Indenture may not be amended to alter the subordination of any
outstanding subordinated debt securities issued thereunder (including the
Debentures) without the consent of each holder of Senior Indebtedness then
outstanding that would be adversely affected thereby.
    
 
CONSOLIDATION, MERGER AND CONVEYANCE OF ASSETS
 
     The Indenture provides that the Company will not consolidate with or merge
into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless the corporation formed
by such consolidation or into which the Company is merged or the person which
acquires
 
                                       31
<PAGE>   37
 
   
such assets shall expressly assume the Company's obligations under the Indenture
and the debt securities issued thereunder (including the Debentures) and
immediately after giving effect to such 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 happened and be continuing.
    
 
SUBORDINATION
 
   
     The Debentures will be expressly subordinate and junior in right of
payment, to the extent and in the manner set forth in the Indenture, to all
"Senior Indebtedness" of the Company. The Indenture defines "Senior
Indebtedness" as obligations (other than nonrecourse obligations, the debt
securities issued under the Indenture (including the Debentures) or any other
obligations specifically designated as being subordinate in right of payment to
Senior Indebtedness) of, or guaranteed or assumed by, the Company 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.
    
 
   
     In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property or (b) that (i) a
default shall have occurred with respect to the payment of principal, premium,
if any, or interest on or other monetary amounts due and payable on any Senior
Indebtedness or (ii) there shall have occurred an Event of Default (other than a
default in the payment of principal, premium, if any, or interest, or other
monetary amounts due and payable) with respect to any Senior Indebtedness, as
defined therein or in the instrument under which the same is outstanding,
permitting the holder or holders thereof to accelerate the maturity thereof
(with notice or lapse of time, or both), and such Event of Default shall have
continued beyond the period of grace, if any, in respect thereof, and such
default or Event of Default shall not have been cured or waived or shall not
have ceased to exist, or (c) that the principal of and accrued interest on the
subordinated debt securities (including the Debentures) shall have been declared
due and payable upon an Event of Default pursuant to Section 5.1 of the
Indenture and such declaration shall not have been rescinded and annulled as
provided therein, then the holders of all Senior Indebtedness shall first be
entitled to receive payment of the full amount unpaid thereon, or provision
shall be made for such payment in money or money's worth, before the holders of
any of the subordinated debt securities (including the Debentures) are entitled
to receive a payment on account of the principal, premium, if any, or interest
on the indebtedness evidenced by such subordinated debt securities.
    
 
   
     On May 2, 1995, approximately $1.5 billion of Senior Indebtedness was
outstanding. The Indenture does not restrict the amount of Senior Indebtedness
that the Company may incur. In addition, the Debentures will also be effectively
subordinate to all existing and future obligations of the Company's
subsidiaries. On May 2, 1995, approximately $1.5 billion of indebtedness of the
Company's subsidiaries not included in Senior Indebtedness was outstanding.
    
 
   
FORM OF DEBENTURES
    
 
   
     The Debentures will be issued in fully registered form, without coupons.
Investors may elect to hold Debentures directly or, subject to the rules and
procedures of DTC described below, hold interests in a global certificate (the
"Global Certificate") registered in the name of DTC or its nominee.
    
 
   
     Certain of the following information concerning the procedures and record
keeping with respect to ownership interests in the Debentures, payment of
interest and other payments on the Debentures to DTC Participants or Beneficial
Owners (as hereafter defined), confirmation and transfer of ownership interests
in the Debentures and other related transactions by and between DTC, the DTC
Participants and Beneficial Owners is based solely on information contained in a
published report of DTC.
    
 
   
     DTC, an automated clearinghouse for securities transactions, will act as
securities depository for the Debentures. DTC is a limited-purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the 1934 Act, as amended. DTC was
    
 
                                       32
<PAGE>   38
 
   
created to hold securities of DTC Participants and facilitate the clearance and
settlement of securities transactions among DTC Participants in such securities
through electronic book-entry changes in accounts of DTC Participants, thereby
eliminating the need for physical movement of security certificates. DTC
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations, some of which (and/or
their representatives) own DTC. Access to the DTC system is also available to
others such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC Participant, either directly or
indirectly.
    
 
   
     Upon the issuance of a Global Certificate, DTC will credit on its
book-entry registration and transfer system, the principal amount of the
Debentures represented by such Global Certificate to the accounts of
institutions that have accounts with DTC. The accounts to be credited shall be
designated by the holders that sold such Debentures to such DTC Participants.
Ownership of beneficial interests in a Global Certificate will be limited to DTC
Participants or persons that may hold interests through DTC Participants.
Ownership of beneficial interests in a Global Certificate will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by DTC for such Global Certificate and on the records of DTC Participants (with
respect to the interest of persons holding through DTC Participants). So long as
DTC, or its nominee, is the owner of a Global Certificate, DTC or such nominee,
as the case may be, will be considered the sole owner or holder of the
Debentures represented by such Global Certificate for all purposes under the
Indenture.
    
 
   
     Each person owning a beneficial interest in a Global Certificate must rely
on the procedures of DTC and, if such person is not a DTC Participant, on the
procedures of the DTC Participant through which such person owns its interest,
to exercise any rights of a holder under the Indenture. The Company understands
that under existing industry practices, if it requests any action of holders or
if an owner of a beneficial interest in a Global Certificate desires to give or
take any action which a holder is entitled to give or take under the Indenture,
DTC would authorize DTC Participants holding the relevant beneficial interests
to give or take such action, and such DTC Participants would authorize
beneficial owners owning through such DTC Participants to give or take such
action or would otherwise act upon the instructions of beneficial owners holding
through them.
    
 
   
     Principal and interest payments on the Debentures represented by a Global
Certificate registered in the name of DTC or its nominee will be made to DTC or
its nominee, as the case may be, as the registered owner of such Global
Certificate. The Company understands that it is DTC's practice to credit any DTC
Participant's accounts with payments in amounts proportionate to their
respective beneficial interests in the Debentures represented by the Global
Certificate as shown on the records of DTC on the date payment is scheduled to
be made, unless DTC has reason to believe that it will not receive payment on
such date. The Company expects that payments by DTC Participants to owners of
beneficial interests in such Global Certificate held through such DTC
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such DTC
Participants. Accordingly, although owners who hold Debentures through DTC
Participants will not possess Debentures in certificated form, the DTC
Participants will provide a mechanism by which holders of Debentures will
receive payments and will be able to transfer their interests.
    
 
     None of the Company, the Trustee or any other agent of the Company will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interest in such Global
Certificate or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
 
   
     If DTC or a successor depository is at any time unwilling or unable to
continue as depository of the Global Certificates and a successor depository is
not appointed by the Company within ninety days, the Company will issue
certificated Debentures in exchange for the Global Certificates. In addition,
the Company may at any time determine not to have Debentures represented by a
Global Certificate and, in such event, will issue certificated Debentures equal
in principal amount to such beneficial interest registered in its name and will
be entitled to physical delivery of such certificated Debentures.
    
 
                                       33
<PAGE>   39
 
SAME-DAY SETTLEMENT AND PAYMENT
 
   
     Settlement for the Debentures will be made by a purchaser in immediately
available funds. While the Debentures are in the book-entry system described
above, all payments of principal and interest will be made by the Trustee on
behalf of the Company to DTC in immediately available funds.
    
 
   
     Debentures represented by Global Certificates registered in the name of DTC
or its nominee will trade in DTC's Same-Day Fund Settlement System until
maturity. During such period, secondary market trading activity in the
Debentures will settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on the
trading activity in the Debentures.
    
 
GOVERNING LAW
 
   
     The Indenture and the Debentures are governed by and construed in
accordance with the laws of the State of New York.
    
 
CONCERNING THE TRUSTEE
 
     Chemical Bank is one of a number of banks with which the Company and its
subsidiaries maintain ordinary banking relationships and with which the Company
and its subsidiaries maintain credit facilities. Chemical Bank is also Trustee
under that certain Senior Debt Indenture dated as of July 19, 1990 relating to
certain Senior Indebtedness of the Company.
 
                       DESCRIPTION OF THE PREFERRED STOCK
 
GENERAL
 
     The following description relating to the Preferred Stock set forth herein
does not purport to be complete and is subject to, and qualified in its entirety
by, the provisions of the Company's Restated Certificate of Incorporation
("Certificate"). Copies of the Certificate are available from the Company upon
request.
 
     The Preferred Stock ranks equally with all other series of preferred stock
of the Company (the only other preferred stock of the Company currently
outstanding is 2.5 million shares of its series of $3.50 convertible preferred
stock) and senior to the Company's Junior Preferred Stock (none of which is
currently outstanding) and common stock upon liquidation and as to dividends and
redemption. If dividends or amounts payable on liquidation are not paid in full
on the preferred stock of all series, then all series share ratably in the
amount available therefor.
 
DIVIDENDS
 
     Holders of the shares of the Preferred Stock are entitled to receive, when
and if declared by the Board of Directors, an annual cash dividend of $2.21 per
share, payable in quarterly installments on March 1, June 1, September 1 and
December 1. Dividends on the Preferred Stock are cumulative. Dividends are
payable to holders of record as they appear on the stock books of the Company on
such record dates not more than 60 nor less than 10 days preceding the payment
dates as shall be fixed by the Board of Directors.
 
LIQUIDATION RIGHTS
 
     In the event of any liquidation, dissolution or winding up of the Company,
the holders of shares of the Preferred Stock are entitled to receive out of
assets of the Company available for distribution to shareholders, before any
distribution of assets is made to holders of common stock, liquidating
distributions in the amount of $25 per share plus dividends accrued and
accumulated but unpaid to the redemption date. If upon any liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the Preferred Stock and any other Preferred Stock ranking as to any such
distribution on a parity with the Preferred Stock are not paid in full, the
holders of the Preferred Stock and of any other preferred stock of the Company
will share ratably in any such distribution of assets in proportion to the full
respective preferential amounts to
 
                                       34
<PAGE>   40
 
which they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of shares of the Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Company. Neither a consolidation or merger of the Company with
another corporation nor a sale or transfer of all or part of the Company's
assets for cash or securities shall be considered a liquidation, dissolution or
winding up of the Company.
 
OPTIONAL REDEMPTION
 
     The Preferred Stock is not subject to any mandatory redemption or sinking
fund provision. The Preferred Stock is redeemable on at least 30 but not more
than 60 days' notice, at the option of the Company, as a whole or in part, at
any time on and after September 1, 1997 at a redemption price equal to $25 per
share plus dividends accrued and accumulated but unpaid to the redemption date.
 
     If full cumulative dividends on the Preferred Stock have not been paid, the
Preferred Stock may not be redeemed in part and the Company may not purchase or
acquire any shares of the Preferred Stock otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of the Preferred Stock.
If less than all the outstanding shares of the Preferred Stock are to be
redeemed, the Company will select those to be redeemed by lot or a substantially
equivalent method.
 
VOTING RIGHTS
 
     Except as indicated below, the holders of shares of the Preferred Stock
have no voting rights. If the equivalent of six quarterly dividends payable on
the Preferred Stock or on any other preferred stock is in arrears, the number of
directors of the Company will be increased by two and the holders of all
outstanding shares of the Preferred Stock, voting as a single class without
regard to series, will be entitled to elect the additional two directors until
all dividends in arrears have been paid or declared and set apart for payment.
 
MISCELLANEOUS
 
   
     The Preferred Stock is not convertible into, or exchangeable for, shares of
common stock of the Company. The Preferred Stock has no preemptive rights. All
of the Preferred Stock is fully paid and nonassessable. The Preferred Stock may
not be called, retired or in any way redeemed, except pursuant to the redemption
provisions set out above.
    
 
                                 LEGAL OPINIONS
 
   
     The validity of the Debentures will be passed upon for the Company by J.
Furman Lewis, Esq., Senior Vice President and General Counsel of the Company,
and for the Dealer Managers by Davis Polk & Wardwell. Miller & Chevalier,
Chartered, special tax counsel to the Company, has passed upon certain United
States federal income tax considerations with respect to the Debentures.
    
 
                                    EXPERTS
 
     The consolidated financial statements and schedules included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994,
incorporated by reference in this Prospectus and Registration Statement, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing therein and incorporated herein by reference. The
financial statements and schedules referred to above are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
 
                                       35
<PAGE>   41
 
     Facsimile copies of the Letter of Transmittal will be accepted. Letters of
Transmittal, certificates representing shares of the Preferred Stock, Notices of
Guaranteed Delivery and any other required documents should be sent by each
stockholder or his broker, dealer, commercial bank, trust company or other
nominee to the Exchange Agent at one of the addresses as set forth below:
 
                             The Exchange Agent is:
 
                    FIRST CHICAGO TRUST COMPANY OF NEW YORK
 
<TABLE>
<S>                                             <C>
          BY HAND/OVERNIGHT COURIER                                BY MAIL
             Tenders & Exchanges                             Tenders & Exchanges
               Suite 4680-WCI                                   P.O. Box 2559
          14 Wall Street, 8th Floor                          Mail Suite 4660-WCI
             New York, NY 10005                             Jersey City, NJ 07303
</TABLE>
 
                             Facsimile Transmission
                        (For Eligible Institutions Only)
                                 (201) 222-4720
                                 (201) 222-4721
 
                             Confirm by Telephone:
                                 (201) 222-4707
 
               Shareholder Inquiries Regarding Lost Certificates:
                                 1-201-324-0137
 
     Any questions or requests for assistance or additional copies of this
Prospectus, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Managers at their respective
telephone numbers and locations set forth below. You may also contact your
broker, dealer, commercial bank or trust company or other nominee for assistance
concerning the Exchange Offer.
 
                           The Information Agent is:
 
                               MORROW & CO., INC.
 
<TABLE>
<S>                                             <C>
              909 Third Avenue                          14755 Preston Road, Suite 725
          New York, New York 10022                           Dallas, Texas 75240
</TABLE>
 
                       Banks and Brokers call toll-free:
                                 1-800-662-5200
 
                           All others call toll-free:
                                 1-800-566-9058
 
                The Dealer Managers for the Exchange Offer are:
 
                                Lehman Brothers
                           Liability Management Group
                          Three World Financial Center
                                200 Vesey Street
                               New York, NY 10285
                           Contact: David B. Parsons
                           1-800-438-3242 (toll free)
                            1-212-528-7581 (collect)
 
                       Morgan Stanley & Co. Incorporated
                          1221 Avenue of the Americas
                               New York, New York
                      1-800-422-6464 ext. 6905 (toll free)
 
                                       36

<PAGE>   1
 
This is neither an offer to exchange or to sell nor a solicitation of an offer
to exchange or buy any of these securities. The Exchange Offer is made only
   by the Prospectus and the related Letter of Transmittal and the Exchange
     Offer is not being made to, nor will tenders be accepted from or on
     behalf of, holders of these securities in any jurisdiction in which
       the making or acceptance thereof would not be in compliance with
         the securities or blue sky laws of such jurisdiction.
 
                          THE WILLIAMS COMPANIES, INC.
 
                               OFFER TO EXCHANGE
 
                  % QUARTERLY INCOME CAPITAL SECURITIES (QUICS(SM))
 
                                    FOR ITS
 
                        $2.21 CUMULATIVE PREFERRED STOCK
 
     The Williams Companies, Inc., a Delaware corporation (the "Company") is
offering, upon the terms and subject to the conditions set forth in its
Prospectus dated           , 1995 (the "Prospectus") and the accompanying Letter
of Transmittal (the "Letter of Transmittal" which, together with the Prospectus,
constitute the "Exchange Offer"), to exchange its   % (equivalent to $
per $25 principal amount) Quarterly Income Capital Securities ("Debentures") for
its $2.21 Cumulative Preferred Stock (the "Preferred Stock"). The Exchange will
be effected on the basis of $25 principal amount of Debentures for each share of
the Preferred Stock validly tendered and accepted for exchange.
 
                  THE EXCHANGE OFFER WILL EXPIRE AT 5:00 p.m.,
           NEW YORK CITY TIME, ON           , 1995, UNLESS EXTENDED.
 
     THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE THEIR SHARES OF
THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.
 
     Pursuant to the terms and subject to the conditions of the Exchange Offer,
the Company will accept for exchange any and all shares of the Preferred Stock
tendered and not properly withdrawn prior to 5:00 p.m., New York City time, on
          , 1995, or if the Exchange Offer is extended by the Company, in its
sole discretion, the latest date and time to which the Exchange Offer is
extended (the "Expiration Time"). Tenders of shares of the Preferred Stock
pursuant to the Exchange Offer are irrevocable, except that shares of the
Preferred Stock tendered pursuant to the Exchange Offer may be withdrawn at any
time prior to the Expiration Time and, unless theretofore accepted for exchange
pursuant to the Exchange Offer, may be withdrawn at any time after 40 business
days from           , 1995.
 
     The Company expressly reserves the right, in its sole discretion, to (i)
extend, amend or modify the terms of the Exchange Offer in any manner and (ii)
withdraw or terminate the Exchange Offer and not accept for exchange any
Preferred Stock, at any time for any reason.
 
     Purpose: The principal purpose of the Exchange Offer is to improve the
Company's after-tax cash flow which will result because interest payable on the
Debentures will be deductible by the Company (as it accrues) for United States
federal income tax purposes, while dividends payable with respect to the shares
of the Preferred Stock are not deductible.
 
     The Prospectus and Letter of Transmittal contain important information
which should be read before any action is taken by holders of the Preferred
Stock. Tenders may be made only by a properly completed and executed Letter of
Transmittal and in conformance with the terms thereof and of the Prospectus.
 
     The Prospectus and the related Letter of Transmittal are first being sent
to holders of Preferred Stock on             , 1995 and are being furnished to
brokers, dealers, banks and similar persons whose names, or
<PAGE>   2
 
names of whose nominees, appear on the lists of holders of the Preferred Stock
or, if applicable, who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Preferred Stock.
 
     Solicitation Fee: The Company will pay to Soliciting Dealers (as defined in
the Prospectus) designated by the record or beneficial owner, as appropriate, of
Preferred Stock a solicitation fee of $0.50 per share of the Preferred Stock
validly tendered and accepted for exchange pursuant to the Exchange Offer,
subject to certain conditions. Soliciting Dealers are not entitled to a
solicitation fee for shares of the Preferred Stock beneficially owned by such
Soliciting Dealer.
 
     In any jurisdiction where the securities or blue sky laws require the
Exchange Offer to be made by a licensed broker or dealer, the Exchange Offer is
being made on behalf of the Company by the Dealer Managers or one or more other
brokers or dealers which are licensed under the laws of such jurisdiction. The
information required to be disclosed by paragraphs (e)(1) of Rule 13e-3 and
(d)(1) of Rule 13e-4 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended, is contained in the Prospectus and is
incorporated herein by reference.
 
     Any questions or requests for assistance may be directed to the Information
Agent and the Dealer Managers at the addresses and telephone numbers set forth
below. Requests for copies of the Prospectus or of the Letter of Transmittal or
the Notice of Guaranteed Delivery may be directed to the Information Agent and
copies will be forwarded promptly at the Company's expense. Shareholders may
also contact their broker, dealer, commercial bank or trust company for
assistance concerning the Exchange Offer.
 
                           The Information Agent is:
 
                             MORROW & COMPANY, INC.
 
<TABLE>
<S>                                           <C>
               909 Third Avenue                       14755 Preston Road, Suite 725
           New York, New York 10022                        Dallas, Texas 75240
</TABLE>
 
                       Banks and Brokers call toll-free:
                                 1-800-662-5200
 
                           All others call toll-free:
                                 1-800-566-9058
 
                The Dealer Managers for the Exchange Offer are:
 
<TABLE>
<S>                                           <C>
               LEHMAN BROTHERS                             MORGAN STANLEY & CO.
          LIABILITY MANAGEMENT GROUP                           INCORPORATED

               Lehman Brothers                             Morgan Stanley & Co.
          Liability Management Group                           Incorporated
            Contact: David Parsons                        Preferred Stock Group
          1-800-438-3242 (toll free)                    Contact: Steven C. Sahara
           1-212-528-7581 (collect)                1-800-422-6464 ext. 6620 (toll free)
</TABLE>
 
            , 1995
 
- ---------------
(SM) Lehman Brothers has applied for a service mark for QUICS.


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