WILLIAMS COMPANIES INC, S-4, 1995-08-25

WILLIAMS COMPANIES INC
S-4, 1995-08-25
NATURAL GAS TRANSMISSION

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

THE WILLIAMS COMPANIES, INC.
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 73-0569878
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>

ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(918) 588-2000
(Address and telephone number of principal executive offices)

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, including zip code, and telephone number, including area code,
of agent for service)

With copies to:

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<S> <C>
RANDALL H. DOUD, ESQ. KEITH L. KEARNEY, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM DAVIS POLK & WARDWELL
919 THIRD AVENUE 450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10017
(212) 735-3000 (212) 450-4000
</TABLE>

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

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G check the following box. / /

CALCULATION OF REGISTRATION FEE

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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
% Beneficial Unsecured Convertible
Securities (Debentures)................ $125,000,000 (1) $142,500,000(2) $49,137.93(2)
(Principal Amount)
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Common Stock (par value $1.00 per share)
reserved for issuance upon conversion
of % Beneficial Unsecured
Convertible Securities................. 3,875,969 shares(3) -- -- (4)
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Preferred Stock Purchase Rights(5)....... 1,937,985 rights(3) -- -- (4)
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(1) For each share of The Williams Companies, Inc. $3.50 Series Cumulative
Convertible Preferred Stock (the "Preferred Stock") tendered prior to the
Expiration Time (as defined herein) the exchanging holder will receive $50
principal amount of Debentures.

(2) Calculated in accordance with Rule 457(f)(2) of the Securities Act of 1933,
as amended, based on the aggregate book value of the Preferred Stock.

(3) If as a result of stock splits, stock dividends or similar transactions, the
number of securities purported to be registered on this registration
statement changes, this registration statement shall be deemed to cover the
additional securities to be issued in connection with any such transaction.

(4) No separate fee is payable in connection with the registration of the Common
Stock and attached Preferred Stock Purchase Rights ("Rights") into which the
% Beneficial Unsecured Convertible Securities are convertible, since no
additional consideration is payable upon such exchange.

(5) Rights are evidenced by certificates for shares of the Common Stock and
automatically trade with the Common Stock. Value attributable to such
Rights, if any, is reflected in the market price of the Common Stock.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2

THE WILLIAMS COMPANIES, INC.

Cross Reference Sheet Pursuant to Rule 404(a) of the Securities Act of 1933
and Item 501(b) of Regulation S-K, showing the Location or Heading in the
Prospectus Required by Part I of Form S-4.

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FORM S-4 ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
-------------------------------- ----------------------
<S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus..... Outside Front Cover Page of Prospectus;
Facing Page; Cross Reference Sheet

2. Inside Front and Outside Back Cover Pages
of Prospectus.............................. Available Information; Incorporation of
Certain Documents by Reference; Table of
Contents

3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information.............. Prospectus Summary; Risk Factors; Certain
Legal Considerations; The Exchange Offer;
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividend Requirements

4. Terms of the Transaction................... Prospectus Summary; Risk Factors; Certain
Legal Considerations; Comparison of the
Debentures and the Preferred Stock; The
Exchange Offer; Description of the
Debentures; Description of the Preferred
Stock; Description of the Common Stock;
Description of the Rights; Certain United
States Federal Income Tax Consequences

5. Pro Forma Financial Information............ Capitalization

6. Material Contacts with the Company Being
Acquired................................... *

7. Additional Information Required for
Reoffering by Persons and Parties Deemed to
be Underwriters............................ *

8. Interests of Named Experts and Counsel..... Legal Opinions; Experts

9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ *

10. Information with Respect to S-3
Registrants................................ Incorporation of Certain Documents by
Reference; The Company; Capitalization;
Market and Trading Information; Description
of the Debentures; Description of the
Preferred Stock; Description of the Common
Stock; Description of the Rights

11. Incorporation of Certain Information by
Reference.................................. Incorporation of Certain Documents by
Reference

12. Information with Respect to S-2 or S-3
Registrants................................ *

13. Incorporation of Certain Information by
Reference.................................. *
</TABLE>
<PAGE> 3

<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
-------------------------------- ----------------------
<S> <C>
14. Information with Respect to Registrants
Other Than S-3 or S-2 Registrants.......... *

15. Information with Respect to S-3 Companies.. *

16. Information with Respect to S-2 or S-3
Companies.................................. *

17. Information with respect to Companies Other
Than S-2 or S-3 Companies.................. *

18. Information if Proxies, Consents or
Authorizations are to be Solicited......... *

19. Information if Proxies, Consents or
Authorizations are not to be Solicited or
in an Exchange Offer....................... *
</TABLE>

---------------
* Inapplicable or answer is negative.
<PAGE> 4
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 AUGUST 25, 1995
PROSPECTUS
$125,000,000
THE WILLIAMS COMPANIES, INC.
OFFER TO EXCHANGE
% BENEFICIAL UNSECURED CONVERTIBLE SECURITIES(SM) ("BUCS(SM)")
(SUBORDINATED CONVERTIBLE DEFERRABLE INTEREST DEBENTURES, DUE 2025)
FOR ANY AND ALL
$3.50 SERIES CUMULATIVE CONVERTIBLE 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 $125 million in aggregate principal amount of its % Beneficial Unsecured
Convertible Securities (the "Debentures") for up to 2,500,000 shares of its
$3.50 Series Cumulative Convertible Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), which constitute all outstanding shares of the
Preferred Stock as of the date of this Prospectus.

The Exchange Offer will be effected on the basis of $50 principal amount of
Debentures for each share of Preferred Stock validly tendered and accepted for
exchange. The Debentures are offered in minimum denominations of $50 and
integral multiples thereof, and the shares of the Preferred Stock have a
liquidation preference of $50 per share. As part of the Exchange Offer, holders
of shares of the Preferred Stock accepted for exchange in the Exchange Offer
will receive cash equal to the accrued and unpaid dividends, if any, on such
shares accumulating after August 1, 1995 (the most recent dividend payment date)
to, but excluding, the Issuance Date (as herein defined) in lieu of such
dividends (such amount, the "Payment in Lieu of Accumulated Dividends"), payable
as soon as practicable after the Expiration Time 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. The Exchange Offer also may be withdrawn, modified or
terminated by the Company at any time and for any reason. For a description of
the other terms of the Exchange Offer, see "The Exchange Offer."

See "Prospectus Summary," "Comparison of the Debentures and the Preferred
Stock," "Risk Factors," "Certain Legal Considerations" and "The Exchange Offer"
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 AS TO WHETHER TO EXCHANGE THEIR
SHARES OF THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.

THESE SECURITIES HAVE NOT 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
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
BUCS(SM) and Beneficial Unsecured Convertible Securities(SM) are registered
service marks of Salomon Brothers Inc
------------------------

The Dealer Managers for the Exchange Offer are:
SALOMON BROTHERS INC MERRILL LYNCH & CO.
------------------------

The date of this Prospectus is , 1995.
<PAGE> 5

The Debentures will mature on September 30, 2025 and will bear interest at
an annual rate of % from the first day following the Expiration Time (the
"Issuance Date"). Accrued interest on the Debentures will be payable quarterly
in arrears on March 31, June 30, September 30 and December 31, commencing
December 31, 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 this right, the Company may not declare or pay dividends on,
or redeem, purchase or acquire, any of its Capital Stock (as hereinafter
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 may 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 the Debentures -- Quarterly Payments"
and " -- Payment Deferral."

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 June 30, 1995, approximately $1.6 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 June 30, 1995, approximately $1.5 billion of
indebtedness (excluding trade indebtedness) of the Company's subsidiaries not
included in Senior Indebtedness was outstanding. See "Description of the
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 (as is also the case with
respect to dividends on shares of the Preferred Stock).

Each Debenture is convertible at the option of the holder at any time,
unless previously redeemed, into common stock of the Company, par value $1.00
per share (the "Common Stock"), and the attached preferred share purchase rights
(the "Rights" and, unless the context otherwise requires, deemed to be included
in all references to "Common Stock") at a conversion price of $32.25 (equivalent
to approximately 1.5504 shares of Common Stock per $50 principal amount of
Debentures). Such conversion price is subject to adjustment in certain events.
The Preferred Stock is convertible at the option of the holder thereof at any
time into Common Stock at a conversion price of $32.00, and such conversion
price is also subject to adjustment in certain events. See "Description of the
Debentures -- Conversion" and "Description of the Preferred
Stock -- Convertibility." On August 23, 1995, the last reported sale price of
the Common Stock on the New York Stock Exchange (the "NYSE") was $36 1/8 per
share.

i
<PAGE> 6

percentage of liquidation preference) as for the Debentures. See "Description of
the Debentures -- Optional Redemption" and "Description of the Preferred
Stock -- Redemption."

For federal income tax purposes, the exchange of the shares of the
Preferred Stock for Debentures will be a taxable transaction. In addition, the
Debentures will be treated as having been issued with original issue discount.
However, if the Company does not elect to extend the interest payment period,
the amount of original issue discount accrued during any quarter by a holder of
Debentures who acquired such Debentures pursuant to the Exchange Offer will be
approximately equal to the cash interest payment received by such holder for
that quarter. For a discussion of these and other United States federal income
tax considerations relevant to the Exchange Offer, see "Risk Factors -- Tax
Consequences of Right to Defer Payment of Interest" and "-- Certain Other United
States Federal Income Tax Consequences."

The Debentures constitute a new issue of debt securities with no
established trading market, and there can be no assurance that an active market
for the Debentures will develop or be sustained in the future. Although the
Preferred Stock has been registered under the Securities Act of 1933, as amended
(the "Securities Act"), the shares of the Preferred Stock are not listed on any
exchange and there neither has been, nor is, any organized market on which the
Preferred Stock could have been or can be traded. To the extent that shares of
the Preferred Stock are tendered and accepted in the Exchange Offer, the
liquidity of the Preferred Stock may be adversely affected. See "Risk
Factors -- Trading of the Debentures and Preferred Stock."

Salomon Brothers Inc and Merrill Lynch & Co. (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.

Questions and requests for assistance or requests for additional copies of
this Prospectus, the Letter of Transmittal and the Notice of Guaranteed Delivery
should be directed to the Dealer Managers as set forth on the back cover of this
Prospectus.
------------------------

ii
<PAGE> 7

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. The Company will also file an
Issuer Tender Offer Statement on Schedule 13E-4 (the "Schedule 13E-4", 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"), and the rules and regulations promulgated thereunder, which
will include certain additional information relating to the Exchange Offer. This
Prospectus does not contain all the information set forth in the Registration
Statement, or which will be set forth in the Schedule 13E-4, 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.

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, including the Common Stock, are
listed on the NYSE and the Pacific Stock Exchange Inc. (the "PSE"). 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 PSE, 301 Pine
Street, San Francisco, California 90014.

iii
<PAGE> 8

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

This Prospectus incorporates by reference documents filed by the Company
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, previously 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 Reports on Form 10-Q for the quarters ended
March 31, 1995 and June 30, 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;

5. The Proxy Statement of the Company dated March 18, 1995; and

6. The Company's Registration Statement on Form 8-A dated February 6, 1986
and the Company's Registration Statement on Form 8-B dated August 20,
1987.

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.

iv
<PAGE> 9

TABLE OF CONTENTS

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PAGE
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<S> <C>
AVAILABLE INFORMATION............................................................... iii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..................................... iv
PROSPECTUS SUMMARY.................................................................. 1
COMPARISON OF THE DEBENTURES AND THE PREFERRED STOCK................................ 7
RISK FACTORS........................................................................ 10
CERTAIN LEGAL CONSIDERATIONS........................................................ 12
THE COMPANY......................................................................... 13
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND
REQUIREMENTS...................................................................... 13
CAPITALIZATION...................................................................... 14
THE EXCHANGE OFFER.................................................................. 15
MARKET AND TRADING INFORMATION...................................................... 23
TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES
OF THE PREFERRED STOCK............................................................ 23
DESCRIPTION OF THE DEBENTURES....................................................... 24
DESCRIPTION OF THE PREFERRED STOCK.................................................. 33
DESCRIPTION OF THE COMMON STOCK..................................................... 35
DESCRIPTION OF THE RIGHTS........................................................... 36
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES............................... 37
LEGAL OPINIONS...................................................................... 40
EXPERTS............................................................................. 40
</TABLE>

v
<PAGE> 10

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 this 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.

The Company's principal executive offices are located at One Williams
Center, Tulsa, Oklahoma 74172, and its telephone number is (918) 588-2000.

POTENTIAL BENEFITS TO EXCHANGING HOLDERS

- The annual interest rate on the Debentures will be % (equivalent to
$ annually per $50 principal amount of Debentures), as compared
with the annual dividend rate of $3.50 per share of the Preferred Stock.
See "Comparison of the Debentures and the 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 subordinate (as are shares of the Preferred Stock) 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 "Risk Factors -- 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 addition, during any extension of the interest payment
period, interest on the Debentures would accrue with interest thereon
compounded quarterly at the rate of interest on the Debentures; while
during any deferral of dividends on the shares of the Preferred Stock,
dividends accumulate without interest thereon. In each case, however, the
Company believes that such deferral or extension is unlikely. See "Risk
Factors -- Right of Company to Defer Payment of Interest."

- The liquidity and trading market for the Preferred Stock could be
adversely affected to the extent that shares of the Preferred Stock are
tendered and accepted in the Exchange Offer. See "The Exchange
Offer -- Certain Effects of the Exchange Offer; Plans of the Company
after the Exchange Offer" and "Risk Factors -- Trading of the Debentures
and Preferred Stock."

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<PAGE> 11

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 the Company were
to extend an interest payment period, the market price of the Debentures
may be adversely affected.

- 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 "Risk Factors -- Tax Consequences of Right to Defer Payment of
Interest."

- 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 the Debentures and
the Preferred Stock."

- For federal income tax purposes, participation in the Exchange Offer will
be a taxable event. Depending on each exchanging holder's particular
circumstances, participation in the Exchange Offer will be treated as an
exchange in which gain or loss is recognized or as a dividend. See "Risk
Factors -- Certain Other United States Federal Income Tax Consequences."

- In the event of any Change in Control (as defined in the Certificate for
the Preferred Stock) of the Company, each holder of Preferred Stock has
the right, at the holder's option, to require the Company to redeem any
or all of such holder's shares of Preferred Stock unless such Change in
Control has been duly approved by the Continuing Directors (as defined in
the Certificate for the Preferred Stock). There is no comparable
provision in the Indenture covering the Debentures. See "Description of
the Preferred Stock -- Change of Control."

OTHER CONSIDERATIONS

- Tendering holders will not be obligated to pay brokerage commissions or
fees to the Dealer Managers, the Exchange 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. See "The Exchange Offer -- Fees and
Expenses; Transfer Taxes."

- The Preferred Stock was issued by the Company on May 1, 1995 in
connection with the Company's acquisition of Transco Energy Company
("Transco") in exchange for Transco's $3.50 series Cumulative Convertible
Preferred Stock. Holders who received the Preferred Stock in that
exchange recognized gain or loss for federal income tax purposes in
connection with such exchange.

THE EXCHANGE OFFER

Purpose of the Exchange Offer. The Company is making the Exchange Offer
because it believes that the Exchange Offer will improve its after-tax cash flow
by replacing shares of the Preferred Stock with Debentures. The potential cash
flow benefit to the Company arises because

2
<PAGE> 12

interest payable on the Debentures will be deductible by the Company (as it
accrues) for federal income tax purposes, while dividends payable on the shares
of the Preferred Stock are not deductible. See "The Exchange Offer -- 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 $125 million in
aggregate principal amount of its Debentures for up to 2,500,000 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 $50
principal amount of Debentures for each share of the Preferred Stock validly
tendered and accepted for exchange. See "The Exchange Offer -- General."

The Exchange Offer is subject to certain conditions. See "The Exchange
Offer -- Expiration; Extension; Termination; Amendment."

Securities Offered. The Debentures will mature on September 30, 2025 and
will bear interest at an annual rate of % from the Issuance Date. Accrued
interest on the Debentures will be payable quarterly in arrears on the Interest
Payment Dates (March 31, June 30, September 30 and December 31), commencing
December 31, 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, 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 such 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 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 exercise such right in the future, the market price of
the Debentures may 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 the
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
June 30, 1995, approximately $1.6 billion of such Senior Indebtedness was
outstanding. The Debentures will also be effectively subordinate to all existing
and future obligations of the Company's subsidiaries. On June 30, 1995,
approximately $1.5 billion in indebtedness (excluding trade indebtedness) of the
Company's subsidiaries not included in Senior Indebtedness was outstanding. See
"Description of the Debentures -- Subordination" and "Capitalization."

3
<PAGE> 13

Each Debenture is convertible at the option of the holder at any time,
unless previously redeemed, into Common Stock at a conversion price of $32.25
(equivalent to approximately 1.5504 shares of Common Stock per $50 principal
amount of the Debentures). Such conversion price is subject to adjustment in
certain events. The Preferred Stock is convertible at the option of the holder
thereof at any time into Common Stock at a conversion price of $32.00, and such
conversion price is also subject to adjustment in certain events. See
"Description of the Debentures -- Conversion" and "Description of the Preferred
Stock -- Convertibility." On August 23, 1995, the last reported sale price of
Common Stock on the NYSE was $36-1/8 per share.

The Debentures will be redeemable at the option of the Company, in whole or
in part, at any time on or after November 1, 1999, at a redemption price
initially equal to 102.8% of the principal amount redeemed and declining ratably
to par on November 1, 2003 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. The Preferred Stock is redeemable at the option of
the Company beginning on the same date and at the same redemption prices
(expressed as a percentage of liquidation preference) as for the Debentures. See
"Description of the Debentures -- Optional Redemption" and "Description of the
Preferred Stock -- Redemption."

For federal income tax purposes, the exchange of shares of the Preferred
Stock for Debentures will be a taxable transaction. In addition, the Debentures
will be treated as having been issued with original issue discount. However, if
the Company does not elect to extend the interest payment period, the amount of
original issue discount accrued during any quarter by a holder of Debentures who
acquired such Debentures pursuant to the Exchange Offer will be approximately
equal to the cash interest payment received by such holder for that quarter. For
a discussion of these and other federal income tax considerations relevant to
the Exchange Offer, see "Risk Factors -- Tax Consequences of Right to Defer
Payment of Interest" and "-- Certain Other United States Federal Income Tax
Consequences."

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, if any, which will equal the accrued
and unpaid dividends on such shares accumulating after August 1, 1995 (the most
recent dividend payment date) to, but excluding, the Issuance Date and which
will be paid as promptly as practicable following the Expiration Time. 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.

Expiration; Extension; Amendments; Termination; and Withdrawal Rights. The
Expiration Time of the Exchange Offer will be 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
Expiration Time of the Exchange Offer will be 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."

4
<PAGE> 14

Issuance Date. The Issuance Date will be the first day following the
Expiration Time. The Debentures will bear interest from the Issuance Date, and
the Payment in Lieu of Accumulated Dividends will be determined for the period
of time from the last dividend payment date of the Preferred Stock up to, but
excluding, the Issuance Date.

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 OR THE DEALER MANAGERS. SUCH
DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.

Special Procedure for Beneficial Owners. Any beneficial owner whose shares
of Preferred Stock are held on its behalf by a broker, dealer, commercial bank,
trust company or other nominee and who wishes to tender should contact such
nominee promptly and instruct such nominee 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 before such time, a tender
may be effected in accordance with the guaranteed delivery procedures set forth
in "The Exchange Offer -- Guaranteed Delivery Procedures."

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."

Fees and Expenses. The expense of soliciting tenders of shares of the
Preferred Stock will be borne by the Company. 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."

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

5
<PAGE> 15

all of the rights and preferences, and will be subject to all of the
limitations, applicable thereto. As a result of the exchange of shares of the
Preferred Stock pursuant to the Exchange Offer, the liquidity of any Preferred
Stock which remains outstanding could be adversely affected. See "The Exchange
Offer -- Certain Effects of the Exchange Offer; Plans of the Company after the
Exchange Offer."

Exchange Agent. First Chicago Trust Company of New York has been appointed
as Exchange Agent in connection with the Exchange Offer. The address and
telephone number of the Exchange Agent is set forth on the back cover page of
this Prospectus.

Dealer Managers. Salomon Brothers Inc and Merrill Lynch & Co. have been
retained as Dealer Managers to solicit exchanges of shares of the Preferred
Stock for Debentures. Questions with respect to the Exchange Offer and requests
for assistance or requests for additional copies of this Prospectus, the Letter
of Transmittal and the Notice of Guaranteed Delivery should be directed to the
Dealer Managers at the addresses and telephone numbers set forth on the back
cover hereof.

The Dealer Managers currently plan to make a market in the Debentures
following the completion of the Exchange Offer. However, there can be no
assurance that the Dealer Managers will engage in such activity or that any
active market in the Debentures will develop or be maintained.

6
<PAGE> 16

COMPARISON OF THE 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 $3.50 annual dividend, payable
to $ annually per $50 quarterly out of funds legally
principal amount of Debentures) available therefor on February
payable quarterly in arrears on 1, May 1, August 1 and November
March 31, June 30, September 30 1 of each year, when, as and if
and December 31, of each year, declared by the Company's Board
commencing December 31, 1995, of Directors (the "Company
subject to the Company's right Board"). The obligation to pay
to defer the interest payment the annual dividend, although
period at any time and from cumulative, could be deferred
time to time; provided that the indefinitely, during which time
aggregate interest payment the amount of dividend due
period, as extended, must end would accrue without interest
on an Interest Payment Date and thereon.
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 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................. September 30, 2025 Not applicable. There is no
mandatory redemption or sinking
fund for the Preferred Stock.
</TABLE>

7
<PAGE> 17

<TABLE>
<CAPTION>
DEBENTURES PREFERRED STOCK
---------- ---------------
<S> <C> <C>
Conversion............... Convertible at the option of Convertible at the option of
the holder at any time, unless the holder at any time, unless
previously redeemed, into previously redeemed, into
Common Stock at a price of Common Stock at a price of
$32.25 (equivalent to $32.00 (equivalent to 1.5625
approximately 1.5504 shares of shares of Common Stock per
Common Stock per $50 principal share of Preferred Stock). Such
amount of Debentures). Such a a conversion would not be
conversion would not be taxable taxable for federal income tax
for federal income tax purposes.
purposes.

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
November 1, 1999, in whole or November 1, 1999, in whole or
in part, at a redemption price in part, at a redemption price
initially equal to 102.8% of initially equal to $51.40 per
the principal amount redeemed share of Preferred Stock (which
and declining ratably to par on is equivalent to 102.8% of the
November 1, 2003 plus accrued liquidation preference of each
and unpaid interest to the date share of Preferred Stock) and
fixed for redemption. declining ratably to $50.00 per
share of Preferred Stock on
November 1, 2003 plus accrued
and accumulated but unpaid
dividends to the date fixed for
redemption.

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, securities, but senior to the
but senior to all Capital Stock Company's Common Stock.
of the Company, including the Effectively subordinated to all
Preferred Stock. Effectively obligations of the Company's
subordinated to all obligations subsidiaries.
of the Company's subsidiaries.

Voting Rights............ None. Non-voting, except that if
dividends are in arrears on any
series of the Company's
preferred stock 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
Company Board.
</TABLE>

8
<PAGE> 18

<TABLE>
<CAPTION>
DEBENTURES PREFERRED STOCK
---------- ---------------
<S> <C> <C>
Dividends Received
Deduction.............. Interest on the Debentures will Dividends on the Preferred
not be eligible for the Stock generally are eligible
dividends received deduction for the dividends received
for corporate holders. The deduction for corporate
dividends received deduction is holders. The dividends received
not applicable for individual, deduction is not applicable for
non-corporate holders. individual, noncorporate
holders.

Original Issue
Discount............... The Debentures will be treated The shares of the Preferred
as having been issued with Stock were not issued with
original issue discount. original issue discount.
However, if the Company does
not elect to extend the
interest payment period, the
amount of original issue
discount accrued during any
quarter by a holder of
Debentures who acquired such
Debentures pursuant to the
Exchange Offer will be
approximately equal to the cash
interest payment received by
such holder for that quarter.

Change of Control........ There is no provision in the In the event of any Change in
Indenture which would require Control (as defined in the
the Company, at the option of a Certificate for the Preferred
holder of Debentures, to redeem Stock) of the Company, each
any or all of such holder's holder of Preferred Stock has
Debentures in the event of a the right, at the holder's
"change in control." option, to require the Company
to redeem any or all of such
holder's shares of Preferred
Stock unless such Change in
Control has been duly approved
by the Continuing Directors (as
defined in the Certificate for
the Preferred Stock).
</TABLE>

9
<PAGE> 19

RISK FACTORS

Prospective exchanging shareholders should carefully consider, in addition
to the other information set forth elsewhere in this Prospectus, the following
certain considerations:

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, 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. However, the interest payment period may not be extended beyond the
date set for maturity of the Debentures or any date on which any Debentures are
fixed for redemption. 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. In addition, 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, among other things, the market
for the Debentures at the time of such disposition. See "Description of the
Debentures -- Payment Deferral."

Dividends on the shares of Preferred Stock may be deferred indefinitely;
however, during such a deferral, the Company may not declare or pay dividends on
its Common Stock. Therefore, the Company believes that a deferral of dividends
on the shares of the Preferred Stock is unlikely. In addition, during any such
deferral of dividends, dividends accumulate without interest thereon.

The Company has no current intention of exercising its right to extend an
interest payment period or to defer dividends on shares of the Preferred Stock.

TAX CONSEQUENCES OF RIGHT TO DEFER PAYMENT OF INTEREST

For United States federal income tax purposes, the Debentures will be
treated as having original issue discount. However, if the Company does not
elect to extend the interest payment period, the amount of original issue
discount accrued during any quarter by a holder of Debentures who acquired such
Debentures pursuant to the Exchange Offer will be approximately equal to the
cash interest payment received by such holder for that quarter. In the event a
Deferral Period does occur, holders of the Debentures would continue, under the
original issue discount rules, to accrue income on the Debentures for federal
income tax purposes. As a result, a holder ordinarily would include such amounts
in gross income in advance of the receipt of cash. See "Certain United States
Federal Income Tax Consequences -- Original Issue Discount."

10
<PAGE> 20

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 may be adversely affected. A
holder that disposes of its Debentures during a Deferral Period will not receive
the deferred interest relating to such period because such amounts will be paid
to the holders of record on the record date for the payment made at the end of
the Deferral Period. 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 (as are shares of the Preferred Stock) to all existing and future
Senior Indebtedness of the Company. The Debentures will be senior to all Capital
Stock of the Company, including the Preferred Stock. On June 30, 1995,
approximately $1.6 billion of such Senior Indebtedness was outstanding. In
addition, the Debentures will be equal in rank to all indebtedness issued under
a certain Subordinated Indenture, dated as of July 25, 1995, between the Company
and Chemical Bank, as trustee. The Company currently has outstanding an exchange
offer for its $2.21 Series Cumulative Preferred Stock pursuant to which up to
$91 million of indebtedness could be incurred under such Subordinated Indenture.

With respect to the Debentures, the Indenture (as hereinafter defined) does
not limit the Company's ability to incur additional indebtedness, including
indebtedness that would rank senior to the Debentures. The Indenture also 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).

Because the Company is a holding company that conducts business through its
subsidiaries, the Debentures are effectively subordinated to all existing and
future liabilities of the Company's subsidiaries (as is the Preferred Stock).
Any right of the Company to participate in any distribution of the assets of any
of the Company's subsidiaries upon the liquidation, reorganization or insolvency
of such subsidiary (and the consequent right of the holders of the Debentures to
participate in those assets) will be subject to the claims of the creditors
(including trade creditors), except to the extent that claims of the Company
itself as a creditor of such subsidiary may be recognized, in which case the
claims of the Company would still be subordinate to any security interest in the
assets of such subsidiary and any indebtedness of such subsidiary senior to that
held by the Company. Moreover, because the Company is a holding company, the
Company's cash flow and consequent ability to meet its debt obligations are
primarily dependent upon the earnings of its subsidiaries, and on dividends and
other payments therefrom. The Company's subsidiaries are not obligated or
required to pay any amounts due pursuant to the Debentures or to make funds
available therefor in the form of dividends or advances to the Company. Debt
instruments of certain subsidiaries of the Company limit the amount of dividend
payments to the Company which may adversely affect the funds available to pay
interest on the Debentures. On June 30, 1995, approximately $1.5 billion of
indebtedness (excluding trade indebtedness) of the Company's subsidiaries not
included in the amount of Senior Indebtedness set forth above was outstanding.
See "Description of the Debentures" and "Capitalization."

11
<PAGE> 21

TRADING OF DEBENTURES AND PREFERRED STOCK

Although the Preferred Stock has been registered under the Securities Act,
there neither has been, nor is, any organized market on which the Preferred
Stock could have been or can be traded. The exchange of shares of the Preferred
Stock pursuant to the Exchange Offer will reduce the number of shares of the
Preferred Stock outstanding and the number of holders of such shares, and,
depending on the number of shares exchanged, could adversely affect the
liquidity and value of shares remaining outstanding after the Exchange Offer.

There can be no assurance that an active market for the Debentures will
develop or be sustained in the future. 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 the Debentures.

CERTAIN OTHER UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

For United States federal income tax purposes, the exchange of the shares
of the Preferred Stock for Debentures will be a taxable transaction. Depending
on each exchanging holder's particular circumstances, such holder will recognize
either (i) gain or loss in an amount equal to the difference between (a) the sum
of the fair market value on the Issuance Date of the Debentures received in the
exchange and the Payment in Lieu of Accumulated Dividends and (b) the holder's
tax basis in the Preferred Stock exchanged or (ii) dividend income in an amount
equal to the sum of the fair market value on the Issuance Date of the Debentures
received in the exchange and the Payment in Lieu of Accumulated Dividends. In
either case, corporate holders are unlikely to benefit from a dividends received
deduction in respect of the exchange.

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 federal income tax considerations
relevant to the Exchange Offer, see "Certain United States Federal Income Tax
Consequences."

CERTAIN LEGAL CONSIDERATIONS

REGULATORY AND FOREIGN APPROVALS

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.

SHAREHOLDER VOTE

There is no shareholder vote required in connection with the Exchange
Offer.

NO APPRAISAL RIGHTS

No appraisal rights are available to holders of shares of the Preferred
Stock in connection with the Exchange Offer.

12
<PAGE> 22

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 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.

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

The Company's consolidated ratios of earnings to combined fixed charges and
preferred stock dividend requirements* were as follows for the respective
periods indicated. The "As Adjusted" column below assumes the exchange of
3,630,100 shares of the Company's $2.21 Series Cumulative Preferred Stock for
$91 million of subordinated debentures pursuant to a pending exchange offer and
the exchange of 2,500,000 shares of Preferred Stock for $125 million of
Debentures:

<TABLE>
<CAPTION>
SIX MONTHS ENDING
JUNE 30, 1995 YEAR ENDED DECEMBER 31,
-------------------------- ----------------------------------------------------------------
HISTORICAL AS ADJUSTED 1994 1993 1992 1991 1990
---------- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
2.17 2.16 2.15 2.30 1.59 1.43 1.15
</TABLE>

---------------
* For the purpose of this ratio (i) earnings consist of income from continuing
operations before fixed charges, minority interest expense 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 the
Company and its subsidiaries.

13
<PAGE> 23

CAPITALIZATION

The following table sets forth the consolidated debt and stockholders'
equity of the Company at June 30, 1995 and as adjusted to give effect to the
issuance of Debentures in exchange for shares of Preferred Stock. The "As
Adjusted" column below also assumes the exchange of 3,630,100 shares of the
Company's $2.21 Series Cumulative Preferred Stock for $91 million of
subordinated debentures pursuant to a pending exchange offer and the exchange of
2,500,000 shares of Preferred Stock for $125 million of Debentures. The
Preferred Stock was issued on May 1, 1995, in exchange for Transco's $3.50
series Cumulative Convertible Preferred Stock. The financial data at June 30,
1995 in the following table are derived from the Company's consolidated
financial statements included in the Company's Quarterly Report on Form 10-Q for
the Quarter ended June 30, 1995, which is incorporated herein by reference. See
"Incorporation by Reference."

<TABLE>
<CAPTION>
JUNE 30, 1995
--------------------------
HISTORICAL AS ADJUSTED
---------- -----------
(IN MILLIONS)
<S> <C> <C>
Long-term debt due within one year......................... $ 186 $ 186
------ -------
Long-term debt............................................. $2,842 $ 3,058
Stockholders' equity:
Preferred stock.......................................... 243 --
Common stock............................................. 105 105
Capital in excess of par value........................... 1,029 1,047
Retained earnings........................................ 1,832 1,832
Unamortized deferred compensation........................ (2) (2)
------ -------
3,207 2,982
Less treasury stock........................................ (93) (84)
------ -------
Total stockholders' equity................................. 3,114 2,898
------ -------
Total capitalization............................. $5,956 $ 5,956
====== =======
</TABLE>

14
<PAGE> 24

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 $125,000,000 aggregate principal amount of its Debentures for up
to 2,500,000 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. Holders of shares of
the Preferred Stock accepted for exchange will receive, in addition to $50
principal amount of the Debentures for each share of the Preferred Stock, cash
equal to the Payment in Lieu of Accumulated Dividends, if any.

PURPOSE OF THE EXCHANGE OFFER

The Company is making the Exchange Offer because it believes that the Offer
will improve its 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. The Company Board has
authorized the Exchange Offer by a unanimous vote.

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) 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 Company Board or to change
any material term of the employment contract of any executive officer, (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 corporate
structure or business of the Company or (vi) any changes in the charter, bylaws
or instruments corresponding thereto of the Company 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 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 until the
expiration of ten business days after the termination of the Exchange Offer. Any
possible future purchases of shares of the Preferred Stock by the Company will
depend on many factors, including the market prices of the shares of Preferred
Stock, the business and financial position of the Company, 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. See "Description of the Preferred Stock."

15
<PAGE> 25

Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the liquidity and value of the Preferred Stock
could be adversely affected. See "Risk Factors -- Trading of Debentures and
Preferred Stock."

All shares of the Preferred Stock exchanged 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. The only other preferred
stock of the Company currently outstanding is 3,630,100 shares of its $2.21
Series Cumulative Preferred Stock.

THE COMPANY AND ITS BOARD OF DIRECTORS AND 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.

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, at any time prior
to the Expiration Date for any reason, and promptly return all shares to the
tendering holders thereof.

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 amend the Exchange Offer in any respect or (iv) 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 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.

16
<PAGE> 26

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 or the rules promulgated
thereunder, 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, (i) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, 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, and any other required documents,
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) the certificates
representing tendered shares of the Preferred Stock must be received by the
Exchange Agent or (b) 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 contact 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.

NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING PREFERRED STOCK
SHOULD BE SENT TO THE COMPANY OR THE DEALER MANAGERS. SUCH DOCUMENTS SHOULD ONLY
BE SENT TO THE EXCHANGE AGENT.

17
<PAGE> 27

Any beneficial owner whose shares of the Preferred Stock are held on its
behalf by a broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender should contact such nominee promptly and instruct such
nominee 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 The Depository Trust
Company ("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 (as defined below), 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 of this paragraph, 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 United 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 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

18
<PAGE> 28

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 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 before such time, 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 business 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 business 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

19
<PAGE> 29

book-entry transfer of such shares into 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 on the back cover hereof. 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 the 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

20
<PAGE> 30

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.

ACCEPTANCE OF PREFERRED STOCK; DELIVERY 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 Time 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, in order 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, Debentures issued pursuant to the Exchange Offer will be issued
as of the Issuance Date and will be delivered to the Exchange Agent as promptly
as practicable following the Expiration Time.

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, if any, payable as promptly as practicable following the
Expiration Time 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

Salomon Brothers Inc and Merrill Lynch & Co. 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

21
<PAGE> 31

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 "Dealer Managers," above.

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. The Company will not pay
any applicable income taxes or any charges that individual brokerage firms
charge their clients for other services rendered in connection with tendering
their shares.

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 Exchange Offer 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

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 at either of its addresses on the back cover hereof.

The Exchange Agent is the transfer agent for the Preferred Stock, the
Company's $2.21 Series Cumulative Preferred Stock and the Common Stock. A
subsidiary of the Exchange Agent's parent corporation is a lender under the
Credit Agreement dated as of February 23, 1995 among the Company and certain of
its subsidiaries and the banks named therein, provides cash management services
to the Company and its subsidiaries and will be trustee under the Indenture
covering the Debentures.

The Company will pay the Exchange Agent its reasonable and customary
compensation for its services in connection with the Exchange Offer. In
addition, the Company will reimburse the Exchange Agent for its reasonable
out-of-pocket expenses, and will indemnify the Exchange Agent against certain
liabilities and expenses in connection with its 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> 32

MARKET AND TRADING INFORMATION

Although the Preferred Stock has been registered under the Securities Act,
there neither has been, nor is, any organized market on which the Preferred
Stock could have been or can be traded. The exchange of shares of the Preferred
Stock pursuant to the Exchange Offer will reduce the number of shares of the
Preferred Stock outstanding 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 value of the remaining outstanding shares of
the Preferred Stock. See "The Exchange Offer -- Certain Effects of the Exchange
Offer; Plans of the Company after the Exchange Offer."

The Preferred Stock was issued by the Company on May 1, 1995 in connection
with the Company's acquisition of Transco in exchange for Transco's $3.50 series
Cumulative Convertible Preferred Stock. Holders who received the Preferred Stock
in that exchange recognized gain or loss for federal income tax purposes in
connection with such exchange.

HOLDERS OF SHARES OF THE PREFERRED STOCK ARE URGED TO OBTAIN CURRENT
INFORMATION WITH RESPECT TO THE MARKET VALUE AND TRADING, IF ANY, OF SHARES OF
THE PREFERRED STOCK.

The Debentures constitute a new issue of debt securities with no
established trading market, and there can be no assurance that an active market
for the Debentures will develop or be sustained in the future. The Dealer
Managers currently plan to make a market in the Debentures following the
completion of the Exchange Offer. However, there can be no assurance that the
Dealer Managers will engage in such activity or that any active market in the
Debentures will develop or be maintained. Accordingly, no assurance can be given
as to the liquidity of the Debentures.

The Common Stock is listed on the NYSE and the PSE. The following table
sets forth for the periods indicated the high and low sales prices of the Common
Stock on the NYSE Composite Tape and the amount of cash dividends paid per
share.

PRICE RANGE*

<TABLE>
<CAPTION>
CASH
DIVIDENDS
HIGH LOW PAID
---- --- ---------
<S> <C> <C> <C>
1993
First Quarter....................................... $24 3/16 $17 15/16 $0.19
Second Quarter...................................... 27 9/16 23 3/8 0.19
Third Quarter....................................... 31 7/8 26 1/4 0.19
Fourth Quarter...................................... 31 3/16 24 3/8 0.21

1994
First Quarter....................................... 27 3/8 22 3/8 0.21
Second Quarter...................................... 30 5/8 22 1/8 0.21
Third Quarter....................................... 33 3/8 28 0.21
Fourth Quarter...................................... 30 1/2 23 1/4 0.21
1995
First Quarter....................................... 30 7/8 24 1/2 0.27
Second Quarter...................................... 35 3/4 30 1/4 0.27
Third Quarter (through August 23, 1995)............. 37 3/8 34 3/8 0.27
</TABLE>

---------------
* As adjusted for a two for one stock split and distribution effective November
5, 1993.

TRANSACTIONS AND ARRANGEMENTS CONCERNING
THE SHARES OF THE PREFERRED STOCK

The shares of the Preferred Stock were issued by the Company on May 1, 1995
in connection with the Company's acquisition of Transco and were issued in
exchange for all of the shares of an

23
<PAGE> 33

outstanding series of Transco's preferred stock which had the same material
designations and preferences as the Preferred Stock.

Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and subsidiaries, 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 actions
in the Preferred Stock since the issuance of the Preferred Stock on May 1, 1995.
Since May 1, 1995, and based upon the Company's records and upon information
provided to the Company by its directors and executive officers, such directors
and executive officers have acquired, in the aggregate, a total of 84,294 shares
and 32,000 shares of Common Stock, respectively, through the exercise of stock
options and receipt of restricted stock awards. Executive officers of the
Company also acquire Common Stock on a monthly basis through participation in
the Company's Employee Thrift Plan. Such shares are acquired pursuant to the
terms of the Thrift Plan by an independent trustee and such executive officers
have no control over the timing or manner of such purchases.

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 August 1, 1995, neither the
Company nor any subsidiary nor, to the Company's knowledge, any of their
respective directors or executive officers, owns any of the shares of the
Preferred Stock. As of August 1, 1995, and based upon the Company's records and
upon information provided to the Company by its directors and executive
officers, such directors and executive officers own, in the aggregate, 736,574
shares of Common Stock. Such total does not give effect to shares acquired by
executive officers since January 1, 1995, pursuant to the terms of the Thrift
Plan. In addition, a subsidiary of the Company owns 1,197,618 shares of Common
Stock.

DESCRIPTION OF THE 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 First National Bank of Chicago, 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 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

24
<PAGE> 34

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
September 30, 2025 (the "Stated Maturity"). The annual interest requirement on
the Debentures (assuming all 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 December 31, 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 periods. 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) to the holders of record of the
Debentures on the record date established for such payment. 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 any 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

25
<PAGE> 35

(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 holders of the Debenture, but in any event not less than two Business Days
prior to such record date.

CONVERSION

Outstanding Debentures will be convertible at the option of the holder
thereof at any time after the date of original issuance thereof, unless
previously redeemed, into whole shares of Common Stock at a conversion price of
$32.25 per share of Common Stock (equivalent to approximately 1.5504 shares of
Common Stock per $50 principal amount of Debentures converted), subject to
adjustment as described below. No fractional shares of Common Stock shall be
issued upon conversion of Debentures. Instead of any fractional share of Common
Stock that would otherwise be issuable upon conversion of a Debenture, the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the fraction of the market price per share of Common Stock (as
determined or prescribed by the Company Board or a duly authorized committee
thereof, whose determination shall be conclusive, but which, so long as the
Common Stock is listed on the NYSE, shall equal the price reported on the NYSE)
at the close of business on the Trading Day (as defined in the Indenture)
immediately preceding the date of conversion. Holders that convert their
Debentures will not be entitled to payment of any accrued interest on such
Debentures, including interest that accrues during a Deferral Period. Debentures
surrendered for conversion during the period after any Record Date and prior to
the corresponding Interest Payment Date must be accompanied by payment of an
amount equal to the interest payable on such Debentures on such Interest Payment
Date. Debentures called for redemption will not be convertible after the close
of business on the Business Day preceding the date fixed for redemption, unless
the Company defaults in payment of the redemption price.

The initial conversion price of $32.25 per share of Common Stock is subject
to adjustment (under formulae set forth in the Indenture) in the following
events:

(I) In case the Company shall (A) pay a dividend in shares of its
capital stock, (B) subdivide the outstanding shares of Common Stock into a
greater number of shares, (C) combine the outstanding shares of Common
Stock into a smaller number of shares, or (D) issue by reclassification of
the shares of Common Stock any shares of its capital stock, the conversion
rate in effect immediately prior thereto shall be adjusted so that the
holder of a Debenture surrendered for conversion after the record date
fixing stockholders to be affected by such event shall be entitled to
receive upon the number of such shares of Common Stock which he would have
been entitled to receive after the happening of such event had such
Debenture been converted immediately prior to such record date. Such
adjustment shall be made whenever any of such events shall happen, but
shall also be effective retroactively as to Debentures converted between
such record date and the date of the happening of any such event.

(II) In case the Company shall issue rights or warrants to all holders
of the Common Stock entitling them to subscribe for or purchase shares of
the Common Stock at a price per share less than the then Current Market
Price Per Share (as defined below) of Common Stock at the record date
mentioned below, the number of shares of the Common Stock into which each
Debenture shall thereafter be convertible shall be determined by
multiplying the number of shares of Common Stock into which such Debenture
was theretofore convertible by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Common
Stock offered for subscription or purchase, and the denominator of which
shall be the number of the shares of Common Stock outstanding on the date
of issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so

26
<PAGE> 36

offered would purchase at such Current Market Price Per Share. Such
adjustment shall be made whenever such rights or warrants are issued, but
shall also be effected retroactively as to Debentures converted between the
record date for the determination of stockholders entitled to receive such
rights or warrants and the date such rights or warrants are issued.

(III) In case the Company shall distribute to all holders of the
Common Stock evidences of its indebtedness or assets (excluding any cash
dividend or distribution made out of current or retained earnings) or
rights to subscribe other than as set forth in paragraph (II) above, then
in each such case the number of shares of Common Stock into which each
Debenture shall thereafter be converted shall be determined by multiplying
the number of shares of Common Stock into which such Debenture was
theretofore convertible by a fraction, the numerator of which shall be the
Current Market Price Per Share of the Common Stock on the record date fixed
by the Company Board for such distribution, and the denominator of which
shall be such Current Market Price Per Share of the Common Stock less the
then fair market value (as determined by the Company Board, whose
determination shall be conclusive) of the portion of the assets, evidences
of indebtedness or subscription rights so distributed applicable to one
share of the Common Stock. Such adjustment shall be made whenever any such
distribution is made, but shall also be effective retroactively as to
Debentures converted between the record date for the determination of
stockholders entitled to receive such distribution and the date such
distribution is made.

(IV) In case the Company shall enter into any consolidation, merger or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in each such case each Debenture remaining outstanding at the time of
consummation of such transaction shall thereafter be convertible into the
kind and amount of such stock or securities, cash and/or other property
receivable upon consummation of such transaction by a holder of the number
of shares of Common Stock into which such Debentures might have been
converted immediately prior to consummation of such transaction, assuming
in each case that such holder of Common Stock failed to exercise rights of
election, if any, as to the kind or amount of securities, cash or other
property receivable upon consummation of such transaction (provided that if
the kind or amount of securities, cash or other property receivable upon
consummation of such transaction is not the same for each non-electing
share, then the kind and amount of securities, cash or other property
receivable upon consummation of such transaction for each non-electing
share shall be deemed to be the kind and amount as receivable per share by
a plurality of the non-electing shares).

No adjustment in the conversion price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this paragraph are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment.

No fractional shares or scrip representing fractional shares of Common
Stock shall be issued upon the conversion of any Debenture. If the conversion
thereof results in a fraction, an amount equal to such fraction multiplied by
the Current Market Price Per Share of Common Stock as of the exchange date shall
be paid to such holder in cash by the Company.

The "Current Market Price Per Share" of Common Stock at any date shall be
deemed to be the average of the daily closing prices for the 15 consecutive
trading days commencing 20 trading days before the day in question. The closing
price for each day shall be reported on the NYSE Composite Transactions Tape or
as reported by any successor central market system.

OPTIONAL REDEMPTION

The Debentures will be redeemable at the option of the Company, in whole or
in part, at any time on or after November 1, 1999 and prior to maturity, upon
not less than 30 nor more than 60 days' notice, at the percentages of the
principal amount thereof set forth below if redeemed during

27
<PAGE> 37

the 12 month period beginning November 1 of the year indicated below (each a
"Redemption Price"); plus in each case an amount equal to accrued and unpaid
interest to the date fixed for redemption.

<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
1999...................................................... 102.8%
2000...................................................... 102.1%
2001...................................................... 101.4%
2002...................................................... 100.7%
2003 and thereafter....................................... 100.0%
</TABLE>

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 (not including obligations in connection with a
conversion of Debentures) 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 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 (not including obligations in connection with a
conversion of Debentures) 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.

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<PAGE> 38

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 20 consecutive quarterly interest periods in payment of any interest
on the Debentures, effective as of the last day of such period; (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.

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);

29
<PAGE> 39

(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 [adversely affect the right to convert the Debentures 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 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

30
<PAGE> 40

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 June 30, 1995, approximately $1.6 billion of the Company's Senior
Indebtedness was outstanding. The Indenture does not restrict the amount of
indebtedness, including Senior Indebtedness, that the Company may incur. Because
the Company is a holding company that conducts business through its
subsidiaries, the Debentures are effectively subordinated to all existing and
future liabilities of the Company's subsidiaries. Any right of the Company to
participate in any distribution of the assets of any of the Company's
subsidiaries upon the liquidation, reorganization or insolvency of such
subsidiary (and the consequent right of the holders of the Debentures to
participate in those assets) will be subject to the claims of the creditors
(including trade creditors), except to the extent that claims of the Company
itself as a creditor of such subsidiary may be recognized, in which case the
claims of the Company would still be subordinate to any security interest in the
assets of such subsidiary and any indebtedness of such subsidiary senior to that
held by the Company. Moreover, because the Company is a holding company, the
Company's cash flow and consequent ability to meet its debt obligations are
primarily dependent upon the earnings of its subsidiaries, and on dividends and
other payments therefrom. The Company's subsidiaries are not obligated or
required to pay any amounts due pursuant to the Debentures or to make funds
available therefor in the form of dividends or advances to the Company. Debt
instruments of certain subsidiaries of the Company limit the amount of dividend
payments to the Company which may adversely impact the funds available to pay
interest on the Debentures. On June 30, 1995, approximately $1.5 billion of
indebtedness (excluding trade indebtedness) of the Company's subsidiaries not
included in the amount of Senior Indebtedness set forth above was outstanding.

In addition, the Debentures will be equal in rank to all indebtedness
issued under a certain Subordinated Debenture, dated as of July 25, 1995,
between the Company and Chemical Bank, as trustee. The Company currently has
outstanding an exchange offer for its $2.21 Series Cumulative Preferred Stock
pursuant to which up the $91 million of indebtedness could be incurred under
such Subordinated Indenture.

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.

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<PAGE> 41

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 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

32
<PAGE> 42

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.

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

The Trustee 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. A subsidiary of the Trustee's
parent corporation is acting as Exchange Agent in connection with the Exchange
Offer. See "The Exchange Offer -- Exchange Agent."

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 Certificate of Designation, Preferences and Rights of
the Preferred Stock (the "Certificate") which is incorporated by reference
herein. Copies of the Certificate are available from the Company upon request.
See "Available Information."

The holders of the Preferred Stock have no preemptive rights with respect
to any Common Stock or any other securities of the Company convertible into or
carrying rights or options to purchase any such stock. All of the Preferred
Stock is fully paid and nonassessable.

RANKING

The Preferred Stock ranks senior to the Common Stock with respect to
dividends and the distribution of assets upon liquidation, dissolution or
winding up. The Preferred Stock ranks equally with the Company's $2.21 Series
Cumulative Preferred Stock (of which 3,630,100 shares are currently outstanding)
as to dividends and the distribution of assets upon liquidation, dissolution or
winding up. The Company has pending an offer to exchange all of such shares of
its $2.21 Series

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<PAGE> 43

Cumulative Preferred Stock for debt securities of the Company which would be
senior to the Preferred Stock and which would rank equally with the Debentures.

DIVIDENDS

Holders of shares of Preferred Stock are entitled to receive, when and if
declared by the Company Board, out of the assets of the Company legally
available for payment, an annual cash dividend of $3.50 per share, payable in
quarterly installments on February 1, May 1, August 1 and November 1.

Unless full cumulative dividends on the Preferred Stock and any stock
ranking on parity with the Preferred Stock as to dividends or upon liquidation
("Parity Stock") have been paid or funds have been set apart for payment thereon
through the current dividend period with respect to the Preferred Stock and any
Parity Stock, the Company may not (i) declare or pay any dividend or
distribution on any junior stock of the Company or (ii) redeem or set apart
funds for the purchase or redemption of any junior stock.

Debt instruments of certain subsidiaries of the Company limit the amount of
dividend payments to the Company which may adversely impact the funds available
to the Company to pay dividends on the Preferred Stock.

REDEMPTION

Shares of the Preferred Stock are not redeemable prior to November 1, 1999.
On and after such date shares of the Preferred Stock will be redeemable, at the
option of the Company, in whole or in part, at any time or from time to time, in
not less than 30 nor more than 60 days' notice, at the redemption prices set
forth below per share if redeemed during the 12 month period beginning November
1 of the year indicated below; plus in each case an amount equal to accrued and
unpaid dividends on the Preferred Stock, to the redemption date.

<TABLE>
<CAPTION>
REDEMPTION
PRICE
YEAR PER SHARE
---- ----------
<S> <C>
1999............................................................. $51.40
2000............................................................. $51.05
2001............................................................. $50.70
2002............................................................. $50.35
2003 and thereafter.............................................. $50.00
</TABLE>

LIQUIDATION PREFERENCE

Holders of shares of the Preferred Stock are entitled to a liquidation
preference of $50.00 per share plus an amount equal to all dividends accumulated
and unpaid on the Preferred Stock as of the date of final distribution. Shares
of the Preferred Stock rank equally as to dividends and the distribution of
assets upon liquidation, dissolution or winding up with the Company $2.21 Series
Cumulative Preferred Stock. There are no provisions in either the Company's
Restated Certificate of Incorporation, as amended, or the Certificate which
purport to restrict the Company's surplus by reason of the excess of the
liquidation preference of the Preferred Stock over its par value. Although there
are no authorities specifically addressing the issue, the Company believes that
under applicable law (i) there should be no restriction upon its surplus
available for the payment of dividends on any of its outstanding capital stock
solely by reason of the fact that the liquidation preference of the Preferred
Stock exceeds the par value of such stock and (ii) no remedy should be available
to the holders of the Preferred Stock before or after payment of any dividend
solely because such dividend would reduce the Company's surplus to an amount
less than the amount of such excess, assuming the payment of such dividend is in
accordance with the Delaware General

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<PAGE> 44

Corporation Law, the Company's Restated Certificate of Incorporation, as
amended, and the Certificate.

VOTING RIGHTS

The holders of shares of Preferred Stock have no voting rights, other than
any voting rights to which they may be entitled under the laws of the State of
Delaware, unless dividends payable on the Preferred Stock or any other preferred
stock of the Company shall have been in arrears and unpaid in an aggregate
amount equal to or exceeding the amount of dividends payable thereon for six
quarterly periods. In such case, the number of directors of the Company will be
increased by two and the holders of all series of preferred stock of the Company
will have the right to elect two additional directors to the Company Board at a
special meeting of the holders of such stock or at any annual meeting of the
Company shareholders and at each subsequent annual meeting until all such
dividends have been paid in full.

CONVERTIBILITY

Each share of Preferred Stock is convertible at the option of the holder
thereof into 1.5625 shares of Common Stock, subject to certain anti-dilution
adjustments which are substantially the same as those provided for in the
Indenture for the Debentures. See "Description of Debentures -- Conversion."

CHANGE OF CONTROL

In the event of any Change in Control (as defined in the Certificate) of
the Company, each holder of Preferred Stock shall have the right, at the
holder's option, to require the Company to redeem any or all of such holder's
shares of Preferred Stock unless such Change in Control shall have been duly
approved by the Continuing Directors (as defined in the Certificate).

DESCRIPTION OF THE COMMON STOCK

The following description of the material terms of the Common Stock does
not purport to be complete and is qualified in its entirety by reference to the
Company's Restated Certificate of Incorporation and By-laws. For information as
to how to obtain the Company's Restated Certificate of Incorporation and
By-laws, see "Available Information."

As of July 31, 1995, there were 240,000,000 shares of Common Stock
authorized and 102,033,593 outstanding (excluding 2,839,714 shares of Common
Stock then held by the Company and its subsidiaries.)

Holders of the Common Stock are entitled to dividends as declared by the
Company Board. Debt instruments of certain subsidiaries of the Company limit the
amount of dividend payments to the Company which may adversely impact (i) the
funds available to the Company to pay dividends on the Preferred Stock and the
Common Stock and (ii) the funds available to pay interest on the Debentures.

Subject to the rights of the holders of any outstanding shares of preferred
stock of the Company (including the Preferred Stock) holders of the Common Stock
are entitled to cast one vote for each share held of record on all matters.
Voting securities do not have cumulative voting rights. This means that the
holders of more than 50 percent of the voting power of all securities
outstanding voting for the election of directors can elect 100 percent of the
directors if they choose to do so; and in such event, the holders of the
remaining voting power will not be able to elect any person or persons to the
Company Board.

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<PAGE> 45

Shareholders have no preemptive or subscription rights upon the issuance of
additional shares of the Company's stock of any class or series. Upon
liquidation or dissolution of the Company, whether voluntary or involuntary, the
holders of the Common Stock are entitled to share ratably in the assets of the
Company available for distribution after provision for creditors and holders of
preferred stock. All of the issued and outstanding shares of the Common Stock
are duly authorized, validly issued, fully paid and will not be subject to
further calls or assessments.

Each share of Common Stock has 0.50 Rights attached unless and until the
Rights are redeemed.

DESCRIPTION OF THE RIGHTS

The following description of the material terms of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Amended and Restated Rights Agreement, dated as of July 12, 1988, between the
Company and First Chicago Trust Company of New York. See "Available
Information."

Rights are evidenced by certificates for Common Stock and will
automatically trade with such Common Stock unless and until they become
exercisable or are redeemed. If and when the Rights become exercisable, Rights
certificates will be distributed and the Rights will become separately
tradeable.

Each Right entitles the holder thereof to purchase from the Company one
two-hundredth of a share of the Company's Series A Preferred Stock for a price
of $75 subject to adjustments. The Rights become exercisable after the tenth day
following the date (the "Stock Acquisition Date") on which a public announcement
is made that any person (an "Acquiring Person") has acquired beneficial
ownership of 20 percent or more of the outstanding shares of the Common Stock or
10 business days following the commencement of (or a public announcement of an
intention to make) a tender or exchange offer if, upon consummation thereof, the
person or group proposing such offer would be beneficial owner of 30 percent or
more of the outstanding shares of the Common Stock. The Rights expire on the
earlier of (i) February 6, 1996 or (ii) the date on which the Rights are
redeemed. The Company is entitled to redeem in whole, but not in part, the
Rights at any time until 30 days following the Stock Acquisition Date, at a
redemption price of $.05 per Right.

In the event that, any time following the Stock Acquisition Date, the
Company is acquired in a merger or other business combination transaction or 50%
or more of its assets or earning power is sold, provision shall be made so that
each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at then current Purchase Price (as defined in the rights
agreement for the Rights) of the Right, common stock of the acquiring entity
which has a value of two times the Purchase Price of the Right. Following the
occurrence of any of the events described above in this paragraph, any Rights
that are or were beneficially owned by an Acquiring Person or affiliates or
associates of any Acquiring Person will immediately become null and void.

Holders of the Rights have no right to vote or to receive dividends.

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<PAGE> 46

CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES

The following is a general discussion of certain federal income tax
consequences of the exchange of the Preferred Stock for the Debentures and the
ownership of the Debentures and the Common Stock into which the Debentures are
convertible by the initial exchanging stockholders. The discussion is based upon
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations, judicial authority, published positions of the Internal Revenue
Service (the "Service") and other applicable authorities, all as in effect on
the date hereof and all of which are subject to change (possibly on a
retroactive basis) or different interpretations. The discussion does not address
all of the tax consequences that may be relevant to a particular Debentureholder
or to Debentureholders subject to special treatment under federal income tax
laws (e.g., holders who are not United States persons for federal income tax
purposes, banks and certain other financial institutions, insurance companies,
tax-exempt organizations, persons who have entered or will enter into hedging,
straddle or similar transactions with respect to the Preferred Stock, the
Debentures or the Common Stock and dealers in securities). This discussion is
limited to persons who hold the Preferred Stock and will hold the Debentures and
the Common Stock as capital assets. In addition, this discussion assumes that a
substantial amount of the Debentures will be "traded on an established market"
as defined for federal income tax purposes (which includes an inter-dealer
quotation system). No ruling has been or will be sought from the Service
regarding any matter discussed herein. Thus, no assurance can be given that the
Service will not take a contrary position to any of the tax aspects set forth
below. Holders of Preferred Stock should consult their own tax advisors as to
the federal income tax consequences of the Exchange Offer and the ownership and
disposition of the Debentures and the Common Stock as well as the effects of
state, local and foreign tax laws.

EXCHANGE OF PREFERRED STOCK FOR DEBENTURES

The exchange of Preferred Stock for Debentures pursuant to the Exchange
Offer will be a taxable transaction. For federal income tax purposes, the
transfer of Debentures in exchange for Preferred Stock will be treated as if the
Company made a distribution of the Debentures in redemption of the Preferred
Stock. Under Section 302(b) of the Code, such a redemption will be treated as a
sale or exchange transaction in which capital gain or loss is recognized for
federal income tax purposes if the receipt of the Debentures (1) results in a
"complete termination" of the stockholder's stock interest in the Company, (2)
is "substantially disproportionate" with respect to the stockholder or (3) is
"not essentially equivalent to a dividend" with respect to the stockholder. For
this purpose, the determination as to whether any of these tests is satisfied
will be made on a stockholder-by-stockholder basis. If none of these Section
302(b) tests is satisfied, the redemption will be treated as a distribution
taxable as a dividend as described below.

For purposes of these Section 302(b) tests, ownership of stock is
determined according to the constructive ownership rules of Section 318 of the
Code, which treat ownership of a security that is convertible into stock as
ownership of such stock. Thus, because the Debentures will be convertible into
Common Stock, the redemption, by itself, will not satisfy either the "complete
termination" or the "substantially disproportionate" tests described above.
Whether a redemption is "not essentially equivalent to a dividend" will depend
on each stockholder's particular circumstances, but, in any case, the redemption
must result in a "meaningful reduction" in the stockholder's interest in the
Company. Because the conversion price of a Debenture is higher than that of the
equivalent exchange amount of Preferred Stock, an exchange of Preferred Stock
for Debentures would, in itself, result in some reduction in an exchanging
stockholder's constructive stock interest in the Company.

It is uncertain whether such a reduction, by itself, or coupled with the
conversion of a holder's Preferred Stock into a creditor interest, would
constitute such a meaningful reduction even if the exchanging stockholder's only
actual or constructive stock interest in the Company after the

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<PAGE> 47

exchange is represented by the Debentures. Accordingly, each prospective
investor should consult its own tax advisor regarding this issue, including
possibly disposing of a portion of its interest in the Company contemporaneously
and as part of an integrated plan with the exchange of Preferred Stock for
Debentures. If such a test is met, the redemption will result in capital gain or
loss equal to the difference between (i) the sum of the fair market value of the
Debentures on the Issuance Date and the Payment in Lieu of Accumulated Dividends
and (ii) the stockholder's tax basis in the Preferred Stock redeemed. Since no
holder of Preferred Stock has held such stock for more than one year, such gain
or loss will be short-term capital gain or loss.

If the exchange of Preferred Stock for Debentures fails all of the Section
302(b) tests described above, the exchanging stockholder will be treated as
receiving a distribution in an amount equal to the fair market value of the
Debentures. Since the Company has substantial earnings and profits for federal
income tax purposes, this distribution would be taxable as a dividend. Subject
to the extraordinary dividend provisions described below, the stockholder's tax
basis in such Preferred Stock would be transferred to the holder's remaining
stockholdings in the Company. Stockholders who do not retain any actual stock
ownership in the Company should consult their own tax advisors regarding whether
tax basis in the exchanged Preferred Stock would be preserved indirectly (for
example, by being added to the exchanging holder's tax basis in the Debentures)
or lost entirely.

The amount treated as a dividend under the rules described above may
qualify for the dividends received deduction for corporate stockholders. The
amount treated as a dividend will be subject to the "extraordinary dividend"
provisions of Section 1059 of the Code. Pursuant to these provisions, an
exchanging corporate holder of Preferred Stock will be required to reduce its
tax basis in its remaining shares of stock in the Company (and possibly
recognize gain) to the extent that such holder claims the dividends received
deduction with respect to the exchange. In addition, under proposed legislation
(which, if enacted, may have an effective date prior to the Issuance Date),
corporate holders that exchange Preferred Stock for Debentures would generally
be treated as recognizing gain, if any, on the exchange, rather than as
receiving a dividend (even if the exchange would otherwise be treated as a
dividend under the rules described above), and might not be permitted to
recognize a loss on the exchange. Corporate holders of Preferred Stock should
consult their tax advisors concerning the "extraordinary dividend" provisions of
the Code and the proposed legislation.

A holder's aggregate initial tax basis in the Debentures generally will be
equal to the fair market value of the Debentures on the Issuance Date, and the
holder's holding period will begin on the day after such date.

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. By reason of this option to extend the interest
payment periods, the Debentures will be issued with "original issue discount"
("OID") for federal income tax purposes. A debt instrument bears OID if its
"stated redemption price at maturity" exceeds its "issue price" by more than a
de minimis amount. The issue price of the Debentures will be their fair market
value on the Issuance Date. 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. None of the payments of stated interest on the Debentures will
constitute qualified stated interest due to the Company's option to defer
payments of interest which respect to the Debentures. 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.

38
<PAGE> 48

A 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 the holder is on the cash method of accounting. Consequently, in the event
that an interest payment period is extended, a holder will be required to
include OID in income notwithstanding that the Company will not make any
interest payments on the Debentures during such period. A holder will not
recognize any income on the receipt of stated interest with respect to the
Debentures. A 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 their fair
market value on the Issuance Date. 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 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 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. 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, that the Company will
not exercise its right to redeem the Debentures beginning in 1999.

SALE, EXCHANGE OR OTHER DISPOSITION OF THE DEBENTURES

Upon the sale, exchange or other disposition of the Debentures in a taxable
transaction (including retirement of the Debentures), a holder generally will
recognize capital gain or loss equal to the difference between the amount
realized upon the sale, exchange or other disposition and the holder's adjusted
tax basis in the Debentures. The holder's adjusted tax basis in the Debentures
will be the holder's initial tax basis, increased by OID previously included in
income by the holder and reduced by any cash payments on the Debentures. Such
gain or loss will be long-term capital gain or loss if, at the time of the sale,
exchange or other disposition, the holder's holding period for the Debentures is
more than one year.

CONVERSION OF DEBENTURES INTO COMMON STOCK

In general, no gain or loss will be recognized on a conversion of the
Debentures solely into Common Stock. The tax basis for the Common Stock received
upon such conversion will be equal to the tax basis of the Debentures converted
(reduced by the portion of such basis allocable to any fractional Common Stock
interest paid in cash). The holding period for the Common Stock received
generally will include the holding period of the Debentures converted, except
that the holding period allocable to accrued OID during the holder's holding
period for the Debentures converted may be treated as commencing on the day
after the date of the conversion.

Under the current advance ruling policy of the Service, cash received in
lieu of a fractional share of Common Stock upon conversion of a Debenture should
be treated as a payment in exchange for the fractional share interest in the
Common Stock. Accordingly, the receipt of cash in lieu of a fractional share of
the Common Stock should result in capital gain or loss measured by the
difference between the amount of cash received for the fractional share and the
holder's tax basis in the fractional share.

39
<PAGE> 49

ADJUSTMENT OF CONVERSION PRICE

Pursuant to Treasury regulations under section 305 of the Code, a holder of
a Debenture will be treated as having received a constructive distribution from
the Company upon an adjustment in the conversion price of the Debentures if (i)
as a result of such adjustment, the proportionate interest of such holder in the
assets or earnings and profits of the Company is increased and (ii) the
adjustment is not made pursuant to a bona fide, reasonable anti-dilution
formula. An adjustment in the conversion price will not be considered made
pursuant to such a formula if the adjustment is made to compensate for certain
taxable distributions with respect to the stock into which the Debentures are
convertible. Thus, under certain circumstances, a decrease in the conversion
price for the Debentures may be taxable to a holder as a dividend to the extent
of the current and accumulated earnings and profits of the Company. In addition,
the failure to adjust fully the conversion price of the Debentures to reflect
distributions of stock dividends with respect to the Common Stock (or rights to
acquire Common Stock) may result in a taxable dividend to the holders of the
Common Stock and holders of rights to acquire Common Stock.

SALE OR DISPOSITION OF COMMON STOCK

Upon the sale or other disposition of the Common Stock in a taxable
transaction, a holder generally will recognize capital gain or loss equal to the
difference between the amount realized upon the sale or disposition and the
holder's tax basis in the Common Stock. Such gain or loss will be long-term
capital gain or loss if, at the time of the sale or disposition, the holder's
holding period for the Common Stock is more than one year.

BACKUP WITHHOLDING

Proceeds from the exchange of Preferred Stock for Debentures, and payments
made on, and proceeds from the sale of, the Debentures, may be subject to a
"backup" withholding tax of 31% unless the holder complies with certain
identification requirements. Any withheld amounts will generally be allowed as a
credit against the holder's federal income tax, provided the required
information is timely filed with the Service.

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. Skadden, Arps, Slate,
Meagher & Flom, 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.

40
<PAGE> 50

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 must be sent to the
Exchange Agent.

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-WC P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WC
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
should be directed to the Dealer Managers at their respective telephone numbers
and locations set forth below.

The Dealer Managers for the Exchange Offer are:

<TABLE>
<S> <C>
SALOMON BROTHERS INC MERRILL LYNCH & CO.
Seven World Trade Center 250 Vesey Street
New York, New York 10048 New York, New York 10281
(800) 558-3745 (toll free) (212) 449-4040 (call collect)
(212) 783-3738 (collect)
Liability Management Group
</TABLE>
<PAGE> 51

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

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

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

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
1.1* Form of Dealer Managers Agreement by and between the Company, Salomon Brothers
Inc and Merrill Lynch & Co. Incorporated.

4.1* Form of Subordinated Debt Indenture.

4.2** Form of Subordinated Debt Indenture (previously filed as Exhibit 4.2 to the Form
S-4 Registration Statement Registration No. 33-60397, dated June 29, 1995).

4.3** Form of Senior Debt Indenture (previously filed as Exhibit 4.1 to the Form S-3
Registration Statement Registration No. 33-33294, dated February 2, 1990).

4.4** Form of Subordinated Debt Indenture (previously filed as Exhibit 4.2 to the Form
S-3 Registration Statement Registration No. 33-33294, dated February 2, 1990).

4.5** Form of Floating Rate Senior Note (previously filed as Exhibit 4.3 to the Form
S-3 Registration Statement Registration No. 33-33294, dated February 2, 1990).

4.6** Form of Fixed Rate Senior Note (previously filed as Exhibit 4.4 to the Form S-3
Registration Statement Registration No. 33-33294, dated February 2, 1990).

4.7** Form of Floating Rate Subordinated Note (previously filed as Exhibit 4.5 to the
Form S-3 Registration Statement Registration No. 33-33294, dated February 2,
1990).

4.8** Form of Fixed Rate Subordinated Note (previously filed as Exhibit 4.6 to the
Form S-3 Registration Statement Registration No. 33-33294, dated February 2,
1990).

4.9** Form of Debt Warrant Agreement (previously filed as Exhibit 4.7 to the Form S-3
Registration Statement Registration No. 33-33294, dated February 2, 1990).
</TABLE>

II-1
<PAGE> 52

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
4.10** Form of Stock Warrant Agreement (previously filed as Exhibit 4.8 to the Form S-3
Registration Statement Registration No. 33-49835, dated July 27, 1993).

4.11** Restated Certificate of Incorporation (previously filed as Exhibit 4(a) to Form
8-B Registration Statement of the Company, dated August 20, 1987).

4.12** Certificate of Amendment of Restated Certificate of Incorporation (previously
filed as Exhibit 3(d) to Form 10-K of the Company for the year ended December
31, 1994).

4.13** Certificate of designation with respect to the $2.21 Series Cumulative Preferred
Stock (previously filed as Exhibit 4.3 to the Registration Statement on Form
S-3, dated August 19, 1992).

4.14** Certificate of Increase of Authorized Number of Shares of Series A Junior
Participating Preferred Stock (previously filed as Exhibit 3(c) to Form 10-K of
the Company for the year ended December 31, 1988).

4.15** Form of Certificate of Designation Preferences and Rights with respect to the
$3.50 Series Cumulative Convertible Preferred Stock (previously filed as Exhibit
4.1 to Amendment No. 2 to Form S-4 Registration Statement No. 33-57639, dated
March 30, 1995).

4.16** Amended and Restated Rights Agreement, dated as of July 12, 1988, between the
Company and First Chicago Trust Company of New York (previously filed as Exhibit
4(c) to Form 8 of the Company, dated July 28, 1988).

4.17** By-laws of the Company (previously filed as Exhibit 3 to Form 10-Q of the
Company for the quarter ended September 30, 1993).

4.18** U.S. $800,000,000 Credit Agreement, dated as of February 23, 1995, among the
Company and certain of its subsidiaries and the banks named therein and
Citibank, N.A. as agent (previously filed as Exhibit 4(b) to Form 10-K of the
Company for the year ended December 31, 1994).

4.19** 6% Convertible Subordinated Debenture Due 2005 and Warrant to Purchase Common
Stock issued to Williams Holdings of Delaware, Inc. on April 15, 1995
(previously filed as Exhibit 4.10 to Form S-8 Registration Statement No.
33-58969, dated May 1, 1995).

4.20** Form of Senior Debt Indenture between the Company and Chemical Bank, Trustee,
relating to the 10 1/4% Debentures, due 2020; the 9 3/8% Debentures, due 2021;
the 8 1/4% Debentures, due 1998; and Medium-Term Notes (8.50%-9.31%), due 1996
through 2001; the 7 1/2% Notes, due 1999, and the 8 7/8% Debentures, due 2012
(previously filed as Exhibit 4.1 to Form S-3 Registration Statement No.
33-33294, dated February 2, 1990).

5.1 Opinion and Consent of J. Furman Lewis, Esq., Senior Vice President and General
Counsel of the Company.

8.1* Tax Opinion and Consent of Skadden, Arps, Slate, Meagher & Flom.

12.1** Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements (previously filed as Exhibit 12 to Form 10-K of the
Company for the year ended December 31, 1994 and as Exhibit 12 to Form 10-Q of
the Company for the quarter ended June 30, 1995).

23.1 Consent of Ernst & Young LLP.
</TABLE>

II-2
<PAGE> 53

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
23.2 Consent of J. Furman Lewis, Esq. (contained in Exhibit 5.1).

23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (contained in Exhibit 8.1).

24.1 Directors' Power of Attorney.

25.1 Statement of Eligibility of the Trustee.

99.1* Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other
Nominees.

99.2* Form of Letter to holders of shares of Preferred Stock dated , 1995.

99.3* Form of Letter of Transmittal.

99.4* Form of Notice of Guaranteed Delivery.
</TABLE>

---------------
* To be filed by amendment.

** Each such exhibit has heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and is incorporated herein by
reference.

ITEM 22. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes:

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

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;

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

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

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

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' Annual Reports pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan annual report pursuant to Section 15(d) of the Securities Act of 1934) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions

II-3
<PAGE> 54

described under Item 15 above, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.

(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-4
<PAGE> 55

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tulsa, State of Oklahoma, on August 25, 1995.

THE WILLIAMS COMPANIES, INC.
(Registrant)

By: /s/ J. FURMAN LEWIS
------------------------------------
J. Furman Lewis
Senior Vice President
and General Counsel

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------------------------------------------- ----------------------------- ----------------
<S> <C> <C>

Keith E. Bailey* Chairman of the Board, Chief August 25, 1995
Executive Officer, President,
and Director (principal
executive officer)

Jack D. McCarthy* Senior Vice President - August 25, 1995
Finance and Chief Financial
Officer (principal financial
officer)

Gary R. Belitz* Controller (principal August 25, 1995
accounting officer)

Harold W. Andersen* Director August 25, 1995

Ralph E. Bailey* Director August 25, 1995

Glenn A. Cox* Director August 25, 1995

Thomas H. Cruikshank* Director August 25, 1995
</TABLE>

II-5
<PAGE> 56

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------------------------------------------- ----------------------------- ----------------
<S> <C> <C>

Ervin S. Duggan* Director August 25, 1995

Patricia L. Higgins Director

Robert J. LaFortune* Director August 25, 1995

James C. Lewis* Director August 25, 1995

Jack A. MacAllister* Director August 25, 1995

James A. McClure* Director August 25, 1995

Peter C. Meinig* Director August 25, 1995

Kay A. Orr* Director August 25, 1995

Gordon R. Parker* Director August 25, 1995

Joseph H. Williams* Director August 25, 1995

*By: /s/ J. FURMAN LEWIS
----------------------------------------
J. Furman Lewis
Attorney-in-fact
</TABLE>

II-6
<PAGE> 57

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- --------------------------------------------------------------------------- ----
<S> <C> <C>
1.1* Form of Dealer Managers Agreement by and between the Company, Salomon
Brothers Inc and Merrill Lynch & Co. Incorporated..........................

4.1* Form of Subordinated Debt Indenture........................................

4.2** Form of Subordinated Debt Indenture (previously filed as Exhibit 4.2 to the
Form S-4 Registration Statement Registration No. 33-60397, dated June 29,
1995)......................................................................
4.3** Form of Senior Debt Indenture (previously filed as Exhibit 4.1 to the Form
S-3 Registration Statement Registration No. 33-33294, dated February 2,
1990)......................................................................

4.4** Form of Subordinated Debt Indenture (previously filed as Exhibit 4.2 to the
Form S-3 Registration Statement Registration No. 33-33294, dated February
2, 1990)...................................................................

4.5** Form of Floating Rate Senior Note (previously filed as Exhibit 4.3 to the
Form S-3 Registration Statement Registration No. 33-33294, dated February
2, 1990)...................................................................

4.6** Form of Fixed Rate Senior Note (previously filed as Exhibit 4.4 to the Form
S-3 Registration Statement Registration No. 33-33294, dated February 2,
1990)......................................................................

4.7** Form of Floating Rate Subordinated Note (previously filed as Exhibit 4.5 to
the Form S-3 Registration Statement Registration No. 33-33294, dated
February 2, 1990)..........................................................

4.8** Form of Fixed Rate Subordinated Note (previously filed as Exhibit 4.6 to
the Form S-3 Registration Statement Registration No. 33-33294, dated
February 2, 1990)..........................................................

4.9** Form of Debt Warrant Agreement (previously filed as Exhibit 4.7 to the Form
S-3 Registration Statement Registration No. 33-33294, dated February 2,
1990)......................................................................

4.10** Form of Stock Warrant Agreement (previously filed as Exhibit 4.8 to the
Form S-3 Registration Statement Registration No. 33-49835, dated July 27,
1993)......................................................................

4.11** Restated Certificate of Incorporation (previously filed as Exhibit 4(a) to
Form 8-B Registration Statement of the Company, dated August 20, 1987).....

4.12** Certificate of Amendment of Restated Certificate of Incorporation
(previously filed as Exhibit 3(d) to Form 10-K of the Company for the year
ended December 31, 1994)...................................................

4.13** Certificate of designation with respect to the $2.21 Series Cumulative
Preferred Stock (previously filed as Exhibit 4.3 to the Registration
Statement on Form S-3, dated August 19, 1992)..............................

4.14** Certificate of Increase of Authorized Number of Shares of Series A Junior
Participating Preferred Stock (previously filed as Exhibit 3(c) to Form
10-K of the Company for the year ended December 31, 1988)..................
</TABLE>

II-7
<PAGE> 58

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- --------------------------------------------------------------------------- ----
<S> <C> <C>
4.15** Form of Certificate of Designation Preferences and Rights with respect to
the $3.50 Series Cumulative Convertible Preferred Stock (previously filed
as Exhibit 4.1 to Amendment No. 2 to Form S-4 Registration Statement No.
33-57639, dated March 30, 1995)............................................
4.16** Amended and Restated Rights Agreement, dated as of July 12, 1988, between
the Company and First Chicago Trust Company of New York (previously filed
as Exhibit 4(c) to Form 8 of the Company, dated July 28, 1988).............
4.17** By-laws of the Company (previously filed as Exhibit 3 to Form 10-Q of the
Company for the quarter ended September 30, 1993)..........................
4.18** U.S. $800,000,000 Credit Agreement, dated as of February 23, 1995, among
the Company and certain of its subsidiaries and the banks named therein and
Citibank, N.A. as agent (previously filed as Exhibit 4(b) to Form 10-K of
the Company for the year ended December 31, 1994)..........................
4.19** 6% Convertible Subordinated Debenture Due 2005 and Warrant to Purchase
Common Stock issued to Williams Holdings of Delaware, Inc. on April 15,
1995 (previously filed as Exhibit 4.10 to Form S-8 Registration Statement
No. 33-58969, dated May 1, 1995)...........................................
4.20** Form of Senior Debt Indenture between the Company and Chemical Bank,
Trustee, relating to the 10 1/4% Debentures, due 2020; the 9 3/8%
Debentures, due 2021; the 8 1/4% Debentures, due 1998; and Medium-Term
Notes (8.50%-9.31%), due 1996 through 2001; the 7 1/2% Notes, due 1999, and
the 8 7/8% Debentures, due 2012 (previously filed as Exhibit 4.1 to Form
S-3 Registration Statement No. 33-33294, dated February 2, 1990)...........
5.1 Opinion and Consent of J. Furman Lewis, Esq., Senior Vice President and
General Counsel of the Company.............................................
8.1* Tax Opinion and Consent of Skadden, Arps, Slate, Meagher & Flom............
12.1** Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividend Requirements (previously filed as Exhibit 12 to Form 10-K of
the Company for the year ended December 31, 1994 and as Exhibit 12 to Form
10-Q of the Company for the quarter ended June 30, 1995)...................
23.1 Consent of Ernst & Young LLP...............................................
23.2 Consent of J. Furman Lewis, Esq. (contained in Exhibit 5.1)................
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (contained in Exhibit
8.1).......................................................................
24.1 Directors' Power of Attorney...............................................
25.1 Statement of Eligibility of the Trustee....................................
99.1* Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
other Nominees.............................................................
99.2* Form of Letter to holders of shares of Preferred Stock dated ,
1995.......................................................................
99.3* Form of Letter of Transmittal..............................................
99.4* Form of Notice of Guaranteed Delivery......................................
</TABLE>

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

* To be filed by amendment.

** Each such exhibit has heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and is incorporated herein by
reference.

II-8

<PAGE> 1
Exhibit 5.1

[J. Furman Lewis letterhead]

August 25, 1995

The Williams Companies, Inc.
One Williams Center
Tulsa, Oklahoma 74172

Dear Sirs:

The Williams Companies, Inc., a Delaware corporation (the "Company"),
has filed on the date hereof its Registration Statement on Form S-4 (the
"Registration Statement") under the Securities Act of 1933 (the "Act") in
connection with the proposed exchange by the Company of any or all shares of
its $3.50 Series Cumulative Convertible Preferred Stock (the "Preferred Stock")
for up to $125 million in aggregate principal amount of the Company's
Beneficial Unsecured Convertible Securities (the "BUCS") (Subordinated
Convertible Deferred Debentures, Due 2025) (the "Exchange Offer").

As Senior Vice President and General Counsel of the Company, I have
examined the corporate proceedings and such other legal matters as I deemed
relevant to the authorization and issuance of the BUCS. Based on such
examination, it is my opinion that the BUCS have been duly authorized and, when
(i) remaining terms are set by an officer of the Company pursuant to the
authority granted such officer by the Board of Directors of the Company, (ii)
the BUCS have been executed, issued, authenticated and delivered pursuant to
the Subordinated Debt Indenture of the Company filed as an exhibit to the
Registration Statement ("the Indenture"), following valid execution and
delivery and qualification of the Indenture, and (iii) the BUCS have been
exchanged for the Preferred Stock in accordance with the terms of the Exchange
Offer, the BUCS will be valid and legally binding obligations of the Company.

I do not find it necessary for the purpose of this opinion, and,
accordingly, do not purport to cover herein the application of the "Blue Sky"
or securities laws of various states to the Exchange Offer or issuance of the
BUCS.

I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the references to me in such Registration
Statement. In giving this consent, I do not concede that I am an expert within
the meaning of the Act or the rules and regulations thereunder, or that this
consent is required by Section 7 of the Act.

Very truly yours,

/s/ J. Furman Lewis
-------------------
J. Furman Lewis

JFL/RHH/sa

<PAGE> 1
Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-4 and related Prospectus of The Williams
Companies, Inc. for the exchange of 2,500,000 shares of its $3.50 series
cumulative convertible preferred stock and to the incorporation by reference
therein of our report dated February 10, 1995, with respect to the consolidated
financial statements and schedules of The Williams Companies, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1994, filed with
the Securities and Exchange Commission.

/s/ ERNST & YOUNG LLP
----------------------------
Ernst & Young LLP

Tulsa, Oklahoma
August 25, 1995

<PAGE> 1
Exhibit 24.1

THE WILLIAMS COMPANIES, INC.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that each of the undersigned individuals, in
their capacity as a director or officer, or both, as hereinafter set forth below
their signature, of THE WILLIAMS COMPANIES, INC., a Delaware corporation
("Williams"), does hereby constitute and appoint J. FURMAN LEWIS, BOBBY E. POTTS
AND DAVID M. HIGBEE their true and lawful attorneys and each of them (with full
power to act without the others) their true and lawful attorneys for them and in
their name and in their capacity as a director or officer, or both, of Williams,
as hereinafter set forth below their signature, to sign a registration statement
on Form S-4 for the registration under the Securities Act of 1933, as amended,
of debt securities of Williams to be issued in exchange for Williams'
outstanding $3.50 Cumulative Convertible Preferred Stock, and any and all
amendments and post-effective amendments to said registration statement and any
and all instruments necessary or incidental in connection therewith; and

THAT the undersigned Williams does hereby constitute and appoint J. FURMAN
LEWIS, BOBBY E. POTTS and DAVID M. HIGBEE its true and lawful attorneys and each
of them (with full power to act without the others) its true and lawful attorney
for it and in its name and on its behalf to sign said registration statement and
any and all amendments and post-effective amendments thereto and any and all
instruments necessary or incidental in connection therewith.

Each of said attorneys shall have full power of substitution and
resubstitution, and said attorneys or any of them or any substitute appointed by
any of them hereunder shall have full power and authority to do and perform in
the name and on behalf of each of the undersigned, in any and all capacities,
every act whatsoever requisite or necessary to be done in the premises, as fully
to all intents and purposes as each of the undersigned might or could do in
person, the undersigned hereby ratifying and approving the acts of said
attorneys or any of them or of any such substitute pursuant hereto.

IN WITNESS WHEREOF, the undersigned have executed this instrument, all as
of the 16th day of March, 1995.

/s/ KEITH E. BAILEY /s/ JACK D. McCARTHY
----------------------------- ----------------------------
Keith E. Bailey Jack D. McCarthy
Chairman of the Board, Senior Vice President
President and (Principal Financial Officer)
Chief Executive Officer
(Principal Executive Officer)

/s/ GARY R. BELITZ
--------------------------
Gary R. Belitz
Controller
(Chief Accounting Officer)

<PAGE> 2
Page 2

<S> <C>
/s/ HAROLD W. ANDERSEN /s/ RALPH E. BAILEY
--------------------------------- ----------------------------------
Harold W. Andersen Ralph E. Bailey
Director Director

/s/ GLENN A. COX /s/ THOMAS H. CRUIKSHANK
--------------------------------- ----------------------------------
Glenn A. Cox Thomas H. Cruikshank
Director Director

/s/ ERVIN S. DUGGAN /s/ ROBERT J. LaFORTUNE
--------------------------------- ----------------------------------
Ervin S. Duggan Robert J. LaFortune
Director Director

/s/ JAMES C. LEWIS /s/ JACK A. MacALLISTER
--------------------------------- ----------------------------------
James C. Lewis Jack A. MacAllister
Director Director

/s/ JAMES A. McCLURE /s/ PETER C. MEINIG
--------------------------------- ----------------------------------
James A. McClure Peter C. Meinig
Director Director

/s/ KAY A. ORR /s/ GORDON R. PARKER
--------------------------------- ----------------------------------
Kay A. Orr Gordon R. Parker
Director Director

</TABLE>
/s/ JOSEPH H. WILLIAMS
---------------------------------
Joseph H. Williams
Director

THE WILLIAMS COMPANIES, INC.

By /s/ J. FURMAN LEWIS
----------------------------------
J. Furman Lewis
Senior Vice President

ATTEST:

/s/ DAVID M. HIGBEE
----------------------------------
David M. Higbee
Secretary

<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____

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

THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)

A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)

ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

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

THE WILLIAMS COMPANIES, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)

DELAWARE 73-0569878
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)

<PAGE> 2

ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:

(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.

Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.

(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.

The trustee is authorized to exercise corporate
trust powers.

ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.

No such affiliation exists with the trustee.

ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.

1. A copy of the articles of association of the
trustee now in effect.*

2. A copy of the certificates of authority of the
trustee to commence business.*

3. A copy of the authorization of the trustee to
exercise corporate trust powers.*

4. A copy of the existing by-laws of the trustee.*

5. Not Applicable.

6. The consent of the trustee required by
Section 321(b) of the Act.

<PAGE> 3

7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.

8. Not Applicable.

9. Not Applicable.

Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 16th day of August, 1995.

THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,

BY /s/ R.D. MANELLA
------------------------
R. D. MANELLA
VICE PRESIDENT

* EXHIBIT 1,2,3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF THE
CIT GROUP HOLDINGS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
FEBRUARY 16, 1993 (REGISTRATION NO. 33-58418).

<PAGE> 4

EXHIBIT 6

THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT

August 16, 1995

Securities and Exchange Commission
Washington, D.C. 20549

Gentlemen:

In connection with the qualification of an indenture between The Williams
Companies, Inc. and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.

Very truly yours,

THE FIRST NATIONAL BANK OF CHICAGO

BY: /s/ R.D. MANELLA
--------------------------
R. D. MANELLA
VICE PRESIDENT

<PAGE> 5

EXHIBIT 7

<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 3/31/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
</TABLE>

CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1995

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.

SCHEDULE RC--BALANCE SHEET

<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
-------------------- ---- ------------ ------
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . . 0081 2,948,128 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . 0071 8,482,108 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A) . . 1754 167,911 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) . 1773 540,011 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold . . . . . . . . . . . . . . . . . . . . . . 0276 2,508,883 3.a.
b. Securities purchased under agreements to resell . . . . . . . . 0277 1,422,695 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2122 16,238,310 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . . RCFD 3123 358,207 4.b.
c. LESS: Allocated transfer risk reserve . . . . . . . . . . . . . RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . 2125 15,880,103 4.d.
5. Assets held in trading accounts . . . . . . . . . . . . . . . . . 3545 13,257,798 5.
6. Premises and fixed assets (including capitalized leases) . . . . . 2145 516,827 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . . 2150 13,166 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) . . . . . . . . . . . . . . . . . . 2130 10,363 8.
9. Customers' liability to this bank on acceptances outstanding . . . 2155 463,961 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . 2143 119,715 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . 2160 1,346,941 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . . 2170 47,678,610 12.
</TABLE>

----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.

<PAGE> 6

<TABLE>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 3/31/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
</TABLE>

SCHEDULE RC--CONTINUED

DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
-------------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) . . . . . . . . . . . . . . . . . . RCON 2200 14,675,401 13.a.
(1) Noninterest-bearing(1) . . . . . . . . . . . . . . . . . . RCON 6631 5,498,690 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . . . . RCON 6636 9,176,711 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) . . . . . . . . . . . . . . RCFN 2200 11,809,645 13.b.
(1) Noninterest bearing . . . . . . . . . . . . . . . . . . . . RCFN 6631 304,669 13.b.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . . . . . . . RCFN 6636 11,504,976 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . . . . RCFD 0278 2,072,830 14.a.
b. Securities sold under agreements to repurchase . . . . . . . . RCFD 0279 1,484,164 14.b.
15. a. Demand notes issued to the U.S. Treasury . . . . . . . . . . . RCON 2840 103,138 15.a.
b. Trading Liabilities . . . . . . . . . . . . . . . . . . . . . . RCFD 3548 9,101,186 15.b.
16. Other borrowed money:
a. With original maturity of one year or less . . . . . . . . . . RCFD 2332 2,307,860 16.a.
b. With original maturity of more than one year . . . . . . . . . RCFD 2333 506,476 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2910 278,108 17.
18. Bank's liability on acceptance executed and outstanding . . . . . RCFD 2920 463,961 18.
19. Subordinated notes and debentures . . . . . . . . . . . . . . . . RCFD 3200 1,225,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . RCFD 2930 699,375 20.
21. Total liabilities (sum of items 13 through 20) . . . . . . . . . . RCFD 2948 44,727,144 21.
22. Limited-Life preferred stock and related surplus . . . . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . . . . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) . . . . . RCFD 3839 2,304,657 25.
26. a. Undivided profits and capital reserves . . . . . . . . . . . . RCFD 3632 447,916 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 8434 ( 2,165) 26.b.
27. Cumulative foreign currency translation adjustments . . . . . . . RCFD 3284 200 27.
28. Total equity capital (sum of items 23 through 27) . . . . . . . . RCFD 3210 2,951,466 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) . . . . . . . . . . . . . . RCFD 3300 47,678,610 29.
</TABLE>

Memorandum
To be reported only with the March Report of Condition.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Number
1. Indicate in the box at the right the number of the statement below that -------------
best describes the most comprehensive level of auditing work performed for
the bank by independent external auditors as of any date during 1993 . . . . . . . . . . . . . . . RCFD 6724 N/A M.1.
-------------
</TABLE>

1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank

2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)

3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)

4.= Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)

5 = Review of the bank's financial statements by external auditors

6 = Compilation of the bank's financial statements by external auditors

7 = Other audit procedures (excluding tax preparation work)

8 = No external audit work

----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.