As filed with the Securities and Exchange Commission on May 16, 1995
Registration No. 33-49835
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
Post-Effective Amendment No. 1 on Form S-4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
THE WILLIAMS COMPANIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 73-0569878
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
____________________
One Williams Center
Tulsa, Oklahoma 74172
(918) 588-2000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
___________________
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)
____________________
COPY TO:
KEITH L. KEARNEY, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
____________________
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
____________________
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
CROSS REFERENCE SHEET
S-4 Item Number and Caption Prospectus
--------------------------- ----------
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus......................... Facing Page; Cross Reference
Sheet; Outside Front
Cover Page of Prospectus
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; Special
Factors; Ratio of Earnings to
Fixed Charges and Earnings to
Combined Fixed Charges and
Preferred Stock Dividend
Requirements
4. Terms of the Transaction........... Prospectus Summary; Special
Factors; The Exchange Offer;
Description of QUICS;
Description of the Preferred
Stock; 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
QUICS; Description of the
Preferred Stock
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........... *
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-3 or S-2
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.. *
_______________
* Item is omitted because answer is negative or item is inapplicable.
Explanatory Note
The Registrant is filing this Post-Effective Amendment No. 1 on Form
S-4 to amend its Form S-3 (Registration No. 33-49835) to effect the exchange
offer described in the enclosed prospectus (the "Exchange Offer"). After the
completion of the Exchange Offer, the Registrant intends to file a
Post-Effective Amendment on Form S-3 (Registration No. 33-49835) in order to
issue securities on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933.
Subject To Completion, Dated May __, 1995
THE WILLIAMS COMPANIES, INC.
OFFER TO EXCHANGE
% Quarterly Income Capital Securities (QUICS[SM])
(Subordinated Deferrable Interest Debentures, Due 2025)
for
$2.21 Cumulative Preferred Stock
____________________
THE EXCHANGE OFFER AND THE WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON __________, 1995, UNLESS EXTENDED.
____________________
The Williams Companies, Inc. (the "Company") hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus (the "Prospectus")
and in the accompanying Letter of Transmittal (the "Letter of Transmittal",
which together with the Prospectus, constitute the "Exchange Offer"), to
exchange up to $ ________ aggregate principal amount of its ____% Quarterly
Income Capital Securities (the "QUICS") (equivalent to $___ per $25 principal
amount of QUICS) for up to 3,630,100 shares of its $2.21 Cumulative Preferred
Stock, $1.00 par value (the "Preferred Stock"), which constitute all
outstanding shares of the Preferred Stock as of the date of this Prospectus.
The QUICS are offered in minimum denominations of $25 and integral
multiples thereof, and the shares of the Preferred Stock have a liquidation
preference of $25 per share. Consequently, the Exchange Offer will be
effected on the basis of $25 principal amount of QUICS for each share of
Preferred Stock validly tendered and accepted for exchange. The dividend on
the Preferred Stock payable on June 1, 1995 will be payable to shareholders of
record on May 19, 1995 regardless of when shares of the Preferred Stock are
tendered pursuant to the Exchange Offer. In addition, as part of the Exchange
Offer, holders of shares of the Preferred Stock accepted for exchange in the
Exchange Offer will be entitled to receive cash equal to the accrued and
unpaid dividends on such shares accumulating after June 1, 1995 to the
Issuance Date (as herein defined) in lieu of such dividends (such amount,
without interest, the "Payment in Lieu of Accumulated Dividends"), payable on
the Issuance Date to such holders.
Pursuant to the terms and subject to the conditions of the Exchange Offer,
the Company will accept for exchange any and all shares of the Preferred Stock
validly tendered and not properly withdrawn prior to 5:00 p.m., New York City
time, on _____________, 1995 or if the Exchange Offer is extended by the
Company, in its sole discretion, the latest time and date to which it is
extended (the "Expiration Time"). Tenders of shares of the Preferred Stock
pursuant to the Exchange Offer are irrevocable, except that shares of the
Preferred Stock tendered pursuant to the Exchange Offer may be withdrawn at
any time prior to the Expiration Time and, unless theretofore accepted for
exchange pursuant to the Exchange Offer, may be withdrawn at any time after 40
business days from the date of this Prospectus. A holder of shares of the
Preferred Stock who desires to tender such shares and whose certificates for
such shares are not immediately available, or who cannot comply in a timely
manner with the procedure for book-entry transfer, may tender such shares of
the Preferred Stock by following the procedures for guaranteed delivery set
forth in "The Exchange Offer -- Guaranteed Delivery Procedures". For a
description of the other terms of the Exchange Offer, see "The Exchange Offer".
See "Prospectus Summary -- Comparison of QUICS and Preferred Stock" and
"Special Factors" for a description of the principal terms of and certain
significant considerations relating to the Exchange Offer, the Preferred Stock
and the QUICS.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF
SUCH SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE
OFFER. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE THEIR
SHARES OF THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.
NEITHER THIS TRANSACTION NOR THESE SECURITIES HAVE BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THIS
TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS PROSPECTUS.
ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
____________________
The Dealer Managers for the Exchange Offer are:
Lehman Brothers Morgan Stanley & Co.
Incorporated
______________________
The date of this Prospectus is , 1995.
______________
[SM]Lehman Brothers has applied for a service mark for QUICS.
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.
The QUICS will mature on ____, 2025 and will bear interest at an
annual rate of ____% from the first day following the Expiration Time (the
"Issuance Date"). In addition, as part of the Exchange Offer, holders of
shares of the Preferred Stock which are accepted for exchange will receive
cash in the amount of the Payment in Lieu of Accumulated Dividends, payable on
the Issuance Date. Interest on the QUICS will be payable quarterly in arrears
on March 31, June 30, September 30 and December 31, commencing September 30,
1995 (each an "Interest Payment Date"); provided that, so long as an Event of
Default (as hereinafter defined) has not occurred and is not continuing with
respect to the QUICS, the Company will have the right to extend the interest
payment period at any time and from time to time on the QUICS for a period not
to exceed 20 consecutive quarterly interest payment periods and, as a
consequence, the quarterly interest payments on the QUICS would be deferred
(but would continue to accrue with interest thereon compounded quarterly at
the rate of interest on the QUICS) during any such extended interest payment
period (each a "Deferral Period"). In the event that the Company exercises
its right, the Company may not declare or pay dividends on, or redeem,
purchase or acquire, any of its Capital Stock (as herein defined) during such
Deferral Period. Therefore, the Company believes that the extension of a
quarterly interest payment period on the QUICS is unlikely. 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 QUICS or any
date on which any QUICS 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 QUICS -- Quarterly Payments" and " -- Payment Deferrals".
The QUICS are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness (as hereinafter
defined) of the Company, but senior to all Capital Stock of the Company,
including the Preferred Stock. On May 2, 1995, approximately $1.5 billion of
such Senior Indebtedness was outstanding. In addition, the QUICS will also be
effectively subordinate to all existing and future obligations of the Company's
subsidiaries. See "Description of QUICS -- Subordination" and
"Capitalization".
The QUICS will be redeemable at the option of the Company, in whole
or in part, at any time on or after September 1, 1997 (which is the same date
after which the shares of the Preferred Stock are first redeemable at the
option of the Company), at a redemption price equal to 100% of the principal
amount redeemed ($25 for each $25 principal amount of QUICS) plus accrued and
unpaid interest to the date fixed for redemption. See "Description of QUICS
- -- Optional Redemption".
For federal income tax purposes, the exchange of the shares of the
Preferred Stock for QUICS will be a taxable transaction, and the QUICS will be
treated as having been issued with original issue discount. The original
issue discount rules may accelerate the timing of a holder's recognition of
income. For a discussion of these and other United States federal income tax
considerations relevant to the Exchange Offer, see "Special Factors -- Certain
United States Federal Income Tax Consequences".
The shares of the Preferred Stock are listed and principally traded
on the New York Stock Exchange (the "NYSE"). On __________, 1995, the last
full day of trading prior to the commencement of the Exchange Offer, the
closing sales price of the shares of the Preferred Stock on the NYSE as
reported on the Composite Tape was $_____ per share. Holders of shares of the
Preferred Stock are urged to obtain current market quotations therefor.
The QUICS constitute a new issue of debt securities with no
established trading market. While the Company intends to list the QUICS on
the NYSE, there can be no assurance that an active market for the QUICS will
develop or be sustained in the future on the NYSE. Moreover, to the extent
that shares of the Preferred Stock are tendered and accepted in the Exchange
Offer, the liquidity and trading market for the Preferred Stock could be
adversely affected.
Lehman Brothers and Morgan Stanley & Co. Incorporated (the "Dealer
Managers") are acting as Dealer Managers for the Exchange Offer. The Dealer
Managers have agreed to use their best efforts to solicit the exchange of the
shares of the Preferred Stock pursuant to the Exchange Offer. First Chicago
Trust Company of New York (the "Exchange Agent") is acting as Exchange Agent
in connection with the Exchange Offer and Morrow & Co., Inc. (the "Information
Agent") is acting as Information Agent in connection with the Exchange Offer.
Questions and requests for assistance may be directed to the Dealer
Managers or the Information Agent, as set forth on the back cover of this
Prospectus. Requests for or additional copies of this Prospectus, the Letter
of Transmittal and the Notice of Guaranteed Delivery may be directed to the
Information Agent.
____________________
No person has been authorized to make any recommendation on behalf of
the Company as to whether shareholders should tender or refrain from tendering
the shares of the Preferred Stock pursuant to the Exchange Offer. No person
has been authorized to give any information or to make any representations in
connection with the Exchange Offer, other than those contained in this
Prospectus or in the Letter of Transmittal. If given or made, such information
or representation may not be relied upon as having been authorized by the
Company.
The Company is not aware of any jurisdiction in which the making of
the Exchange Offer is not in compliance with applicable law. If the Company
becomes aware of any jurisdiction in which the making of the Exchange Offer
would not be in compliance with applicable law, the Company will make a good
faith effort to comply with such law. If, after such good faith effort, the
Company cannot comply with any such law, the Exchange Offer will not be made
to (nor will tenders be accepted from or on behalf of) holders residing in
such jurisdictions. In any jurisdiction where the securities, blue sky or
other laws require the Exchange Offer to be made by a licensed broker or
dealer, the Exchange Offer will be deemed to be made on behalf of the Company
by the Dealer Managers or one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
Neither the delivery of this Prospectus nor any exchange made
hereunder shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof or that there has been no change in the information set forth herein or
in the affairs of the Company since the date hereof.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") a Post-Effective Amendment on Form S-4 to Registration
Statement on Form S-3 (the "Registration Statement", which term shall
encompass all amendments, exhibits, annexes and schedules thereto) pursuant to
the Securities Act of 1933, as amended (the "Securities Act"). The Company
will file an Issuer Tender Offer Statement on Schedule 13E-4 (the "Schedule
13E-4") and a Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3")
with the Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which includes certain additional information relating to the
Exchange Offer, and the rules and regulations promulgated thereunder, covering
the QUICS being offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, the Schedule 13E-4 and
the Schedule 13E-3, certain parts of which are omitted in accordance with the
rules and regulations of the Commission, and to which reference is hereby
made. Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.
The Company is subject to the information and reporting requirements
of the Exchange Act and in accordance therewith files periodic reports and
other information with the Commission. The Registration Statement, as well as
such reports and other information filed by the Company with the Commission,
may be inspected at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and should also be available for inspection and copying at the
regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048 and at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Certain of the securities of the
Company are listed on the NYSE and the Pacific Stock Exchange Inc. Reports
and other information concerning the Company can also be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005 and the Pacific
Stock Exchange, Inc., 301 Pine Street, San Francisco, California 90014.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
in this Prospectus:
1. the Company's Annual Report on Form 10-K for the year ended
December 31, 1994;
2. the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995;
3. the Company's Current Reports on Form 8-K dated January 11,
1995, January 31, 1995 and May 4, 1995;
4. the Company's Current Report on Form 8-K/A dated March 29,
1995, excluding item 8 of Transco Energy Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994,
which 10-K is incorporated by reference in the Form 8-K/A; and
5. the Proxy Statement of the Company dated March 18, 1995.
Each document filed by the Company pursuant to Section 13, 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the Exchange Offer pursuant hereto shall be deemed to
be incorporated by reference in this Prospectus and to be a part of this
Prospectus from the date of filing of such document. Any statement contained
in this Prospectus or in a document incorporated or deemed to be incorporated
by reference in this Prospectus shall be deemed to be modified or superseded
for purposes of the Registration Statement and this Prospectus to the extent
that a statement contained in this Prospectus, or in any subsequently filed
document that also is or is deemed to be incorporated by reference in this
Prospectus, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statement or this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person,
a copy of any or all of the documents that are incorporated by reference in
this Prospectus, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into such documents). Requests
should be directed to 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.
TABLE OF CONTENTS
Page
----
Available Information................................................ iii
Incorporation of Certain Documents by Reference...................... iii
Prospectus Summary................................................... 1
Comparison of QUICS and the Preferred Stock.......................... 8
Special Factors...................................................... 10
The Company.......................................................... 15
Ratios of Earnings to Combined Fixed Charges and Preferred
Stock Dividend Requirements..................................... 16
Capitalization....................................................... 16
The Exchange Offer................................................... 17
Market and Trading Information....................................... 28
Transactions and Arrangements Concerning
the Shares of the Preferred Stock.................................. 29
Certain United States Federal Income Tax Consequences................ 30
Description of QUICS................................................. 35
Description of the Preferred Stock................................... 44
Legal Opinions....................................................... 46
Experts.............................................................. 46
PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in
its entirety by the detailed information appearing elsewhere in this
Prospectus or by documents incorporated by reference into the Prospectus.
Capitalized terms used herein have the respective meanings ascribed to them
elsewhere in this Prospectus.
The Company
The Company, through subsidiaries, is engaged in the transportation and
sale of natural gas and related activities, natural gas gathering and
processing operations, the transportation of petroleum products, the
telecommunications business and provides a variety of other products and
services to the energy industry and financial institutions. In January of 1995
the Company sold a major portion of its telecommunications assets and in May
of 1995 the Company completed the acquisition of Transco Energy Company which,
through its subsidiaries, transports natural gas to markets in the eastern
half of the United States. The Company's subsidiaries currently own and
operate: (i) four interstate natural gas pipeline systems and have a fifty
percent interest in a fifth; (ii) a common carrier petroleum products pipeline
system; and (iii) natural gas gathering and processing facilities and
production properties. The Company also markets natural gas and natural gas
liquids. The Company's telecommunications subsidiaries offer data, voice and
video-related products and services and customer premises equipment
nationwide. The Company also has investments in the equity of certain other
companies.
Certain Investor Considerations
Prospective investors should carefully review the information contained
elsewhere in this Prospectus prior to making a decision regarding the Exchange
Offer and should particularly consider the following matters:
Potential Benefits to Exchanging Holders
bullets The annual interest rate on the QUICS will be ____%, (equivalent to
$___ per $25 principal amount of QUICS) as compared with the
indicated annual dividend rate of $2.21 on the Preferred Stock.
See "Comparison of QUICS and Preferred Stock".
bullets The QUICS 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 QUICS are unsecured obligations of
the Company and will be, and the shares of the Preferred Stock are,
subordinate in right to payment to all existing and future Senior
Indebtedness of the Company and effectively subordinated to all
obligations of the Company's subsidiaries. See "Special Factors --
Subordination of QUICS".
bullets While dividends on the shares of the Preferred Stock may be deferred
indefinitely, the interest payment period on the QUICS can only be
extended for a maximum of 20 consecutive quarterly interest payment
periods. In each case, however, the Company believes that such
deferral is unlikely. See "Special Factors -- Right of Company to
Defer Payment of Interest".
bullets In order to benefit from the higher annual interest rate on the QUICS,
holders of the shares of the Preferred Stock need not pay any
additional cash. Holders of shares of the Preferred Stock wishing
to participate in the Exchange Offer must tender their shares of
the Preferred Stock in accordance with the instructions contained
in "The Exchange Offer -- Procedure for Tendering Preferred Stock"
and in the Letter of Transmittal prior to the Expiration Time.
Potential Risks to Exchanging Holders
bullets Participation in the Exchange Offer will be a taxable event. In
addition, in the event the interest payment period on the QUICS 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 "Special Factors -- Certain
United States Federal Income Tax Consequences".
bullets While dividends on the shares of the Preferred Stock are eligible for
the dividends received deduction for corporate holders, interest on
the QUICS 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 QUICS and Preferred Stock".
bullets There has not been any public market for the QUICS. While the Company
intends to make an application for listing of the QUICS on the NYSE,
there can be no assurance that an active market for the QUICS will
develop or be sustained in the future on such exchange. See "Special
Factors -- Listing and Trading of QUICS and Preferred Stock".
Other Considerations
bullets Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer
meet the requirements of the NYSE for continued listing and may no
longer continue to be registered under the Exchange Act. As a
result the liquidity and trading market for the Preferred Stock
could be adversely affected. See "Special Factors -- Purpose of
the Exchange Offer; Certain Effects of the Exchange Offer; Plans
of the Company after the Exchange Offer" and "-- Listing and
Trading of QUICS and Preferred Stock".
bullets Tendering holders will not be obligated to pay brokerage commissions
or fees to the Dealer Managers, the Exchange Agent, the Information
Agent or the Company or, subject to the instructions in the Letter
of Transmittal with respect to special issuance instructions,
transfer taxes with respect to the exchange of shares of the
Preferred Stock pursuant to the Exchange Offer. Tendering holders
whose shares are held by a broker, dealer, bank or trust company
may, however, be charged a fee for services rendered in connection
with the Exchange Offer.
THE EXCHANGE OFFER
Purpose of the Exchange Offer
The principal purpose of the Exchange Offer is to improve the Company's
after-tax cash flow by replacing shares of the Preferred Stock with QUICS.
The potential cash flow benefit to the Company arises because interest payable
on the QUICS will be deductible by the Company (as it accrues) for United
States federal income tax purposes, while dividends payable with respect to
the shares of the Preferred Stock are not deductible. See "Special Factors --
Purpose of the Exchange Offer; Certain Effects of the Exchange Offer; Plans of
the Company After 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 $___________ aggregate principal amount
of its QUICS for up to 3,630,100 shares of the Preferred Stock, which
constitute all outstanding shares of the Preferred Stock as of the date of
this Prospectus. Exchanges will be made on the basis of $25 principal amount
of QUICS for each share of the Preferred Stock validly tendered and accepted
for exchange. See "The Exchange Offer -- General".
Pursuant to the terms and subject to the conditions of the Exchange Offer,
the Company will accept for exchange any and all shares of the Preferred Stock
validly tendered and not properly withdrawn prior to the Expiration Time.
The Exchange Offer is subject to certain conditions. See "The Exchange
Offer -- Expiration; Extension; Termination; Amendment."
Securities Offered
The QUICS will mature on ____, 2025 and will bear interest at an annual
rate of ____% from the Issuance Date. In addition, holders of shares of the
Preferred Stock accepted for exchange will receive cash in the amount of the
Payment in Lieu of Accumulated Dividends, payable on the Issuance Date.
Interest on the QUICS will be payable quarterly in arrears on March 31, June
30, September 30 and December 31, commencing September 30, 1995; provided
that, so long as an Event of Default has not occurred and is not continuing
with respect to the QUICS, the Company will have the right, upon prior notice
by public announcement given in accordance with NYSE rules at any time, to
extend the interest payment period at any time and from time to time on the
QUICS 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 QUICS would be deferred (but would continue to accrue with interest
thereon compounded quarterly at the rate of interest on the QUICS) during any
Deferral Period. In the event that the Company exercises this right, the
Company may not declare or pay dividends on, or redeem, purchase or acquire,
any of its Capital Stock during such Deferral Period. All series of the
Company's preferred stock, common stock and any other equity securities of the
Company are referred to herein as "Capital Stock". Therefore, the Company
believes that the extension of a quarterly interest payment period on the QUICS
is unlikely. However, should the Company determine to extend such right in
the future, the market price of the QUICS is likely to be adversely affected.
During any such Deferral Period, the Company may continue to extend the
interest payment period, provided that the aggregate interest payment period,
as extended, must end on an Interest Payment Date and must not exceed 20
consecutive quarterly interest payment periods or extend beyond the maturity of
the QUICS or any date on which any QUICS 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 QUICS -- Quarterly Payments" and
" -- Payment Deferrals".
The QUICS are unsecured obligations of the Company and will be subordinate
to all existing and future Senior Indebtedness of the Company, but senior to
all Capital Stock of the Company, including the Preferred Stock. On May 2,
1995, approximately $1.5 billion of such Senior Indebtedness was outstanding.
As the QUICS will be issued by the Company, the QUICS will also be effectively
subordinate to all obligations of the Company's subsidiaries. See
"Description of QUICS -- Subordination". The QUICS will be redeemable at the
option of the Company, in whole or in part, at any time on or after September
1, 1997 (which is the same date after which the shares of the Preferred Stock
are first redeemable at the option of the Company), at a redemption price
equal to 100% of the principal amount redeemed plus accrued and unpaid
interest to the date fixed for redemption. See "Description of QUICS --
Optional Redemption".
For federal income tax purposes, the exchange of shares of the Preferred
Stock for QUICS will be a taxable transaction, and the QUICS will be treated
as having been issued with original issue discount. The original issue
discount rules may accelerate the timing of a holder's recognition of income.
For a discussion of these and other United States federal income tax
considerations relevant to the Exchange Offer, see "Special Factors -- Certain
United States Federal Income Tax Consequences".
Expiration; Extension; Amendments; Termination; and Withdrawal Rights
The Exchange Offer will expire at 5:00 p.m., New York City time on _______,
1995, unless the Company, in its sole discretion, shall have extended the
period during which the Exchange Offer is open, in which event the Exchange
Offer will expire at the latest time and date as so extended by the Company.
See "The Exchange Offer -- Expiration; Extension; Termination; Amendment".
Tenders of shares of the Preferred Stock pursuant to the Exchange Offer are
irrevocable, except that shares of the Preferred Stock tendered pursuant to
the Exchange Offer may be withdrawn at any time prior to the Expiration Time
and, unless theretofore accepted for exchange pursuant to the Exchange Offer,
may also be withdrawn at any time after 40 business days from the date of this
Prospectus. See "The Exchange Offer -- Withdrawal Rights".
The Company expressly reserves the right, in its sole discretion, to (i)
extend, amend or modify the terms of the Exchange Offer in any manner and (ii)
withdraw or terminate the Exchange Offer and not accept for exchange any
Preferred Stock, at any time for any reason. See "The Exchange Offer --
Expiration; Extension; Termination; Amendment".
Procedure for Tendering
For shares of the Preferred Stock to be validly tendered pursuant to the
Exchange Offer, (i) the Letter of Transmittal or a facsimile thereof (all
references in this Prospectus to the Letter of Transmittal shall be deemed to
include a facsimile thereof) properly completed and duly executed in
accordance with the instructions contained herein and therein, together with
any required signature guarantees, or an Agent's Message (as hereinafter
defined) in connection with a book-entry transfer of shares of the Preferred
Stock, must be received by the Exchange Agent, at either of its addresses set
forth on the back cover page of this Prospectus and either (a) certificates
for the shares of the Preferred Stock must be received by the Exchange Agent
at either address or (b) such shares of the Preferred Stock must be
transferred pursuant to the procedures for book-entry transfer described
herein and a confirmation of such book-entry transfer must be received by the
Exchange Agent, in each case prior to the Expiration Time or (ii) the
guaranteed delivery procedures described herein must be complied with. See
"The Exchange Offer -- General" and "-- Procedure for Tendering Preferred
Stock".
NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING SHARES OF THE
PREFERRED STOCK SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE
INFORMATION AGENT. SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.
Special Procedure for Beneficial Owners
Any beneficial owner whose shares of the Preferred Stock are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact such registered holder promptly and
instruct such registered holder to tender on such beneficial owner's behalf.
If such beneficial owner wishes to tender on its own behalf, such owner must,
prior to completing and executing a Letter of Transmittal and delivery of its
shares of Preferred Stock, either make appropriate arrangements to register
ownership of the Preferred Stock in such owner's name or obtain a properly
completed stock power from the registered holder. The transfer of registered
ownership may take considerable time and may not be able to be completed prior
to the Expiration Date. See "The Exchange Offer -- Procedure for Tendering
Preferred Stock".
Guaranteed Delivery Procedures
If a holder desires to accept the Exchange Offer and time will not permit a
Letter of Transmittal or shares of the Preferred Stock to reach the Exchange
Agent before the Expiration Time or the procedure for book-entry transfer
cannot be completed on a timely basis, a tender may be effected in accordance
with the guaranteed delivery procedures set forth in "The Exchange Offer --
Guaranteed Delivery Procedures".
Accrued Dividends
The dividend on the Preferred Stock payable on June 1, 1995 will be payable
to holders of record on May 19, 1995, regardless of when shares of the
Preferred Stock are tendered pursuant to the Exchange Offer. In addition,
holders of shares of the Preferred Stock accepted for exchange pursuant to the
Exchange Offer will receive cash in the amount of the Payment in Lieu of
Accumulated Dividends, payable on the Issuance Date. See "The Exchange Offer
- -Accrued Dividends".
Dividends on shares of the Preferred Stock not exchanged in the Exchange
Offer will continue to accrue and be payable when, as and if declared in
accordance with their terms.
Acceptance of Shares and Delivery of QUICS
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 QUICS issued pursuant to the Exchange Offer will be issued as
of the Issuance Date and will be delivered as promptly as practicable
following the Expiration Time. See "The Exchange Offer -- General", "--
Expiration; Extension; Termination; Amendment".
Untendered Shares of the Preferred Stock
Holders of shares of the Preferred Stock who do not tender their shares in
the Exchange Offer will continue to hold such shares and will be entitled to
all of the rights and preferences, and will be subject to all of the
limitations, applicable thereto. Depending upon the number of shares of the
Preferred Stock exchanged pursuant to the Exchange Offer, the Preferred Stock
may no longer meet the requirements of the NYSE for continued listing and may
no longer continue to be registered under the Exchange Act. If, as a result
of the exchange of shares of the Preferred Stock pursuant to the Exchange
Offer or otherwise, the shares of the Preferred Stock no longer meet the
requirements of the NYSE for continued listing and the listing of the shares
of the Preferred Stock is discontinued, or if the shares no longer are
registered under the Exchange Act, the market for the Preferred Stock could be
adversely affected. See "Special Factors -- Purpose of the Exchange Offer;
Certain Effects of the Exchange Offer; Plans of the Company after the Exchange
Offer".
Exchange Agent and Information Agent
First Chicago Trust Company of New York has been appointed as Exchange
Agent in connection with the Exchange Offer and Morrow & Co., Inc. has been
appointed as Information Agent in connection with the Exchange Offer.
Questions and requests for assistance, requests for additional copies of this
Prospectus or of the Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the Information Agent. The
addresses and telephone numbers of the Exchange Agent and the Information
Agent are set forth on the back cover page of this Prospectus.
Dealer Managers
Lehman Brothers and Morgan Stanley & Co. Incorporated have been retained as
Dealer Managers to solicit exchanges of shares of the Preferred Stock for
QUICS. Questions with respect to the Exchange Offer may be directed to David
B. Parsons, Lehman Brothers -- Liability Management Group, at 1-800-438-3242
(toll-free) or 1-212-528-7581 (collect) or to Steven C. Sahara, Morgan Stanley
& Co. Incorporated -- Preferred Stock Group, at 1-800-422-6464 ext. 6620
(toll-free).
Fees and Expenses
The expense of soliciting tenders of shares of the Preferred Stock will be
borne by the Company. Subject to the receipt of a Letter of Transmittal with
the part thereof entitled "Notice of Solicited Tenders" properly completed and
duly executed as described herein, the Company will pay to any Soliciting
Dealer (as hereinafter defined) a solicitation fee of $.50 per share of the
Preferred Stock tendered and accepted for exchange pursuant to the Exchange
Offer. The Company will pay all transfer taxes, if any, applicable to the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer. See
"The Exchange Offer -- Fees and Expenses; Transfer Taxes".
Comparison of QUICS and the Preferred Stock
The following is a brief summary comparison of certain of the principal
terms of the QUICS and the Preferred Stock.
QUICS Preferred Stock
----- ---------------
Interest/Dividend ____% annual interest $2.21 annual dividend,
Rate........... (equivalent to $____ per payable quarterly out
$25 principal amount of of funds legally available
QUICS) payable quarterly therefor on December
on December 31, March 31, 1, March 1, June 1 and
June 30 and September 30 September 1 of each year,
of each year, commencing when, as and if declared by
September 30, 1995, the Company's Board of
subject to the Company's Directors.
right to defer the interest
payment period at any time
and from time to time;
provided that the
aggregate interest
payment period, as
extended, must
end on an Interest Payment
Date and must not exceed 20
consecutive quarterly
interest payment periods or
extend beyond the maturity
of the QUICS or any date on
which the QUICS 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
QUICS). 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 QUICS
is unlikely.
Maturity......... ____, 2025 Not applicable. There is
no mandatory redemption or
sinking fund for the
Preferred Stock.
Optional Redeemable at the option Redeemable at the option of
Redemption..... of the Company at any time the Company at any time on
on or after September 1, or after September 1, 1997,
1997, in whole or in in whole or in part, at a
part, at a redemption price redemption price equal to
equal to 100% of the $25 per share of Preferred
principal amount redeemed Stock plus accrued and
($25 for each $25 principal accumulated but unpaid
amount of QUICS) plus dividends to the
accrued and unpaid interest date fixed for redemption.
to the date fixed for
redemption.
Subordination.... Unsecured obligations of the Subordinate to claims of
Company and subordinated to creditors, including
all existing and future holders of the Company's
Senior Indebtedness of the outstanding debt
Company, but senior to all securities, including the
Capital Stock of the Company, QUICS, but senior to the
including the Preferred common stock of the
Stock. Effectively Company. Effectively
subordinated to all subordinated to all
obligations of the Company's obligations of the
subsidiaries. Company's subsidiaries.
Voting Rights.... None. Non-voting, except that if
dividends are in arrears
on any series of preferred
stock of the Company for
six quarters, the
holders of all series of
the Company's preferred
stock, voting separately
as a class, are entitled
to elect two additional
members of the Board of
Directors of the
Company.
New York Stock Application will be The shares of the Preferred
Exchange made to list the QUICS Stock are listed on the
Listing........ on the NYSE. NYSE.
Dividends Received Interest on the QUICS Dividends on the Preferred
Deduction...... will not be eligible Stock are eligible for the
for the dividends received dividends received
deduction for corporate deduction for corporate
holders. The dividends holders. The dividends
received deduction is not received deduction is
applicable for individual, not applicable for
non-corporate holders. individual, non-corporate
holders.
Original Issue The QUICS will be treated The shares of the Preferred
Discount....... as having been issued with Stock were not issued with
original issue discount. original issue discount.
SPECIAL FACTORS
Prospective exchanging shareholders should carefully consider, in
addition to the other information set forth elsewhere in this Prospectus, the
following:
Right of Company to Defer Payment of Interest
So long as no Event of Default with respect to the QUICS has occurred and
is continuing, the Company shall have the right, upon prior notice by public
announcement given in accordance with NYSE rules at any time, to extend the
interest payment period at any time and from time to time on the QUICS for a
period not to exceed 20 consecutive quarterly interest payment periods. No
interest shall be due and payable during a Deferral Period, but on the
Interest Payment Date occurring at the end of each Deferral Period the Company
shall pay to the holders of record on the record date for such Interest
Payment Date (regardless of who the holders of record may have been on other
dates during the Deferral Period) all accrued and unpaid interest on the
QUICS, together with interest thereon compounded quarterly at the rate of
interest on the QUICS. 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
QUICS is paid in full. Therefore, the Company believes that the extension of
a quarterly interest payment period on the QUICS 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 QUICS. See "Description of QUICS -- Payment
Deferral".
In the event a Deferral Period occurs, holders of the QUICS would
continue, under the original issue discount rules, to accrue income on the
QUICS for United States federal income tax purposes. As a result, a holder
ordinarily would include such amounts in gross income in advance of the
receipt of cash. A holder that disposes of its QUICS 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 QUICS for the period it
held such QUICS will depend on the market for the QUICS at the time of such
disposition. See "Certain United States Federal Income Tax Consequences --
United States Holders".
The Company has no current intention of exercising its right to extend an
interest payment period.
Potential Market Volatility During Deferral Period
As described above, the Company has the right to extend an interest
payment period from time to time for a period not exceeding 20 consecutive
quarterly interest payment periods. In the event the Company determines to
extend an interest payment period, or in the event the Company thereafter
extends a Deferral Period, the market price of the QUICS is likely to be
adversely affected. A holder that disposes of its QUICS during a Deferral
Period, therefore, may not receive the same return on its investment as a
holder that continues to hold its QUICS. In addition, as a result of such
rights, the market price of the QUICS may be more volatile than other debt
instruments that do not have such rights.
Subordination of QUICS
The QUICS are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness (as hereinafter
defined) of the Company, but senior to all Capital Stock of the Company,
including the Preferred Stock. On May 2, 1995, approximately $1.5 billion of
such Senior Indebtedness was outstanding. There are no terms in the QUICS
that limit the Company's ability to incur additional indebtedness, including
indebtedness that would rank senior to the QUICS. With respect to the QUICS,
the Indenture (as hereinafter defined) does not contain any cross-defaults to
any other indebtedness of the Company, and therefore, a default with respect
to, or the acceleration of, any such indebtedness will not constitute an "Event
of Default" with respect to the QUICS. As the QUICS will be issued by the
Company, the QUICS will also be effectively subordinate to all obligations of
the Company's subsidiaries. See "Description of QUICS" and "Capitalization".
Purpose of the Exchange Offer; Certain Effects of the Exchange Offer; Plans of
the Company after the Exchange Offer.
The Company is making the Exchange Offer because it believes that the
Offer will improve the Company's after-tax cash flow by replacing shares of
the Preferred Stock with QUICS. The potential cash flow benefit to the
Company arises because interest payable on the QUICS 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's Board of Directors (the "Board of Directors") has authorized the
Exchange Offer by a unanimous vote.
The Company believes the Exchange Offer is fair to holders of shares of
the Preferred Stock. In particular, the Exchange Offer will result in the
holders obtaining a security that is senior to the Preferred Stock, that
provides for a higher interest rate than the equivalent dividend on the
Preferred Stock and that provides for a definitive maturity date.
Neither the Company nor the Board of Directors received any report,
opinion (other than certain opinions of counsel) or appraisal which is
materially related to the Exchange Offer, including, but not limited to, any
such report, opinion or appraisal relating to the consideration or the
fairness of the consideration to be offered to the holders of the shares of
the Preferred Stock or the fairness of such transaction to the Company. A
majority of the directors who are not employees of the Company have not
retained any unaffiliated representative to act solely on behalf of
unaffiliated shareholders for the purposes of reviewing the terms of the
Exchange Offer.
Following the consummation of the Exchange Offer, the business and
operations of the Company will be continued by the Company substantially as
they are currently being conducted. Except as disclosed in this Prospectus,
the Company has no present plans or proposals that would result in (i) the
acquisition by any person of any material amount of additional securities of
the Company, or the disposition of any material amount of securities of the
Company, (ii) an extraordinary corporate transaction, such as a merger,
reorganization, liquidation or sale or transfer of a material amount of assets
(other than the sale or transfer of certain non-core assets acquired by the
Company through the acquisition of Transco Energy Company) involving the
Company or any of its subsidiaries, (iii) any change in the present Board of
Directors or management of the Company, including, but not limited to, a plan
or proposal to change the number or term of the directors, to fill any
existing vacancy on the Board of Directors or to change any material term of
the employment contract of any executive officer, except in each case in
connection with the Company's 1995 Annual Meeting of shareholders to be held
on May 18, 1995, (iv) any material change in the present dividend rate or
policy or indebtedness or capitalization of the Company (except that it is
anticipated that subsidiaries of the Company may incur additional obligations
to which the QUICS will be effectively subordinated), (v) any other material
change in the Company's corporate structure or business or (vi) any changes in
the Company's charter, bylaws or instruments corresponding thereto or any
other actions which may impede the acquisition or control of the Company by
any person.
Holders of shares of the Preferred Stock are entitled to receive
dividends of $2.21 annually when, as and if declared by the Board of Directors.
Following the expiration of the Exchange Offer, the Company may, in its
sole discretion, determine to purchase any remaining shares of the Preferred
Stock or of QUICS through privately negotiated transactions, open market
purchases or another exchange or tender offer or otherwise, on such terms and
at such prices as the Company may determine from time to time, the terms of
which purchases or offers could differ from those of the Exchange Offer,
except that the Company will not make any such purchases of shares of the
Preferred Stock or of QUICS until the expiration of ten business days after
the termination of the Exchange Offer. Any possible future purchases of
shares of the Preferred Stock or of QUICs by the Company will depend on many
factors, including the market prices of the shares of Preferred Stock and
QUICS, the Company's business and financial position, alternative investment
opportunities available to the Company, the results of the Exchange Offer and
general economic and market conditions.
Holders of shares of the Preferred Stock who do not tender their shares
in the Exchange Offer will continue to hold such shares and will be entitled
to all of the rights and preferences, and will be subject to all of the
limitations, applicable thereto.
Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet the
requirements of the NYSE for continued listing, which could adversely affect
the liquidity and market value of the Preferred Stock. See "Special Factors
- -- Listing and Trading of QUICS and Preferred Stock".
The Preferred Stock is currently registered under the Exchange Act.
Registration of the Preferred Stock may be terminated upon application of the
Company to the Securities and Exchange Commission (the "Commission") pursuant
to Section 12(g)(4) of the Exchange Act if the shares of the Preferred Stock
are neither held by 300 or more holders of record nor listed on a national
securities exchange. Termination of registration of the Preferred Stock under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to the holders of shares of Preferred Stock (although
the Company would, among other things, remain subject to the reporting
obligations under the Exchange Act as a result of its other outstanding
securities) and would make certain provisions of the Exchange Act, such as the
requirements of Rule 13e-3 thereunder with respect to "going private"
transactions, no longer applicable in respect of the Preferred Stock.
All shares of the Preferred Stock exchanged by the Company pursuant to the
Exchange Offer will be retired, canceled and thereafter returned to the status
of authorized but unissued shares of the Company's preferred stock. Any
shares of the Preferred Stock remaining outstanding after the Exchange Offer
will continue to be redeemable at the option of the Company after September 1,
1997. See "Description of the Preferred Stock -- Optional Redemption". Upon
liquidation or dissolution of the Company, holders of shares of the Preferred
Stock are entitled to receive a liquidation preference in the amount of $25
per share plus dividends accrued and accumulated but unpaid to the redemption
date, on a parity with holders of other Company preferred stock and prior to
payment of any amounts to the holders of the Common Stock. The only other
preferred stock of the Company currently outstanding is 2.5 million shares of
its series of $3.50 convertible preferred stock.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF
SUCH SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE
OFFER. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE THEIR
SHARES OF THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.
Certain Legal Matters; Regulatory and Foreign Approvals; No Appraisal Rights
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its
exchange of shares of the Preferred Stock for QUICS as contemplated in the
Exchange Offer or of any approval or other action by any government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, that would be required for the Company's exchange for or ownership of
shares of the Preferred Stock pursuant to the Exchange Offer. Should any such
approval or other action be required, the Company currently contemplates that
it will seek such approval or other action. The Company cannot predict
whether it may determine that it is required to delay the acceptance for
exchange of, or exchange for, shares of the Preferred Stock tendered pursuant
to the Exchange Offer pending the outcome of any such matter. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that the failure to
obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company intends to make all
required filings under the Exchange Act.
There is no shareholder vote required in connection with the Exchange
Offer.
No appraisal rights are available to holders of shares of the Preferred
Stock in connection with the Exchange Offer.
Certain United States Federal Income Tax Consequences
For federal income tax purposes, the exchange of the shares of the
Preferred Stock for QUICS will be a taxable transaction, and the QUICS will be
treated as having been issued with original issue discount. The original
issue discount rules may accelerate the timing of a holder's recognition of
income. In addition, while dividends on the shares of the Preferred Stock are
eligible for the dividends received deduction for corporate holders, interest
on the QUICS will not be eligible for the dividends received deduction for
corporate holders. The dividends received deduction is not applicable for
individual, non-corporate holders. For a discussion of these and other United
States federal income tax considerations relevant to the Exchange Offer, see
"Certain United States Federal Income Tax Consequences".
Listing and Trading of QUICS and Preferred Stock
The exchange of shares of the Preferred Stock pursuant to the Exchange
Offer will reduce the number of shares of the Preferred Stock that might
otherwise trade publicly and the number of holders of such shares, and
depending on the number of shares exchanged, could adversely affect the
liquidity and market value of remaining shares held by the public.
Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet the
requirements of the NYSE for continued listing. As of May 4, 1995, there were
3,630,100 issued and outstanding shares of the Preferred Stock and 714 record
holders of the shares of the Preferred Stock. According to the NYSE's
published guidelines, the NYSE would consider delisting the Preferred Stock
if, among other things, the number of publicly held shares of the Preferred
Stock should fall below 100,000 or the aggregate market value of publicly held
shares of the Preferred Stock should fall below $2,000,000. If, as a result
of the exchange of shares of the Preferred Stock pursuant to the Exchange
Offer or otherwise, the shares of the Preferred Stock no longer meet the
requirements of the NYSE for continued listing and the listing of the shares
of the Preferred Stock is discontinued, the market for the Preferred Stock
could be adversely affected.
In the event of the delisting of the Preferred Stock by the NYSE, it is
possible that the Preferred Stock would continue to trade on another
securities exchange or in the over-the-counter market and that price
quotations would be reported by such exchange, by the NASD through the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") or by other sources. The extent of the public market for such
Preferred Stock and the availability of such quotations would, however, depend
upon such factors as the number of shareholders remaining at such time, the
interest in maintaining a market in such Preferred Stock on the part of
securities firms, the possible termination of registration under the Exchange
Act, as described below, and other factors.
There has not been any public market for the QUICS. While the Company
intends to list the QUICS on the NYSE, there can be no assurance that an
active market for the QUICS will develop or be sustained in the future on such
exchange. Listing will depend upon the satisfaction of the NYSE's listing
requirements with respect to the QUICS, including requirements as to the
principal amount and distribution of the QUICS. Although the Dealer Managers
have indicated to the Company that they intend to make a market in the QUICS
as permitted by applicable laws and regulations, they are not obligated to do
so and may discontinue any such market-making at any time without notice.
Accordingly, no assurance can be given as to the liquidity of, or trading for,
the QUICS.
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.
RATIOS 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:
Year Ended December 31,
--------------------------------------------
Three Months Ended 1994 1993 1992 1991 1990
-------- ----- ----- ----- -----
March 31, 1995
2.39 2.15 2.30 1.59 1.43 1.15
__________
* For the purpose of this ratio (i) earnings consist of income from
continuing operations before fixed charges and income taxes for the
Company, its majority-owned subsidiaries and its proportionate share of
50 percent-owned companies, less undistributed earnings of less than 50
percent-owned companies; (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 dividends of the Company and its subsidiaries.
CAPITALIZATION
The following table sets forth the consolidated debt and
stockholders' equity of the Company at March 31, 1995 and adjusted to give
effect to the issuance of QUICS in exchange for shares of the Preferred Stock.
The "As Adjusted" column below assumes that holders of 3,630,100 shares of the
Preferred Stock (which constitute all outstanding shares of the Preferred
Stock) elect to participate in the Exchange Offer. The financial data at
March 31, 1995 in the following table are derived from the Company's financial
statements included in the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995, which is incorporated herein by reference. See
"Incorporation by Reference."
March 31, 1995
---------------------
Actual As Adjusted
-------- -----------
(in millions)
Long-term debt due within one year $ 187 $ 187
======= =======
Long-term debt $ 2,848 $ 2,948
Stockholders' equity
Preferred stock 100 -
Common stock 105 105
Capital in excess of par value 994 994
Retained earnings 1,779 1,779
Unamortized deferred compensation (2) (2)
------- -------
2,976 2,876
Less treasury stock (408) (408)
------- -------
Total stockholders' equity 2,568 2,468
------- -------
Total capitalization* $ 5,416 $ 5,416
======= =======
__________
Excludes minority interest in common stock and preferred stock of a
subsidiary.
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 $_____________ aggregate principal amount of
its QUICS for up to 3,630,100 shares of the Preferred Stock, which constitutes
all outstanding shares of the Preferred Stock as of the date of this
Prospectus. Pursuant to the terms and subject to the conditions of the
Exchange Offer, the Company will accept for exchange any and all shares of the
Preferred Stock validly tendered and not properly withdrawn prior to the
Expiration Time.
Tendering holders will not be obligated to pay brokerage commissions
or fees to the Dealer Managers, the Exchange Agent, the Information Agent or
the Company or, subject to the instructions in the Letter of Transmittal with
respect to special issuance instructions, transfer taxes with respect to the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer. The
Company will pay all reasonable charges and expenses in connection with the
Exchange Offer, other than any applicable income taxes or any charges that
individual brokerage firms charge their clients for other services rendered in
connection with tendering their shares.
Expiration; Extension; Termination; Amendment
The Exchange Offer will expire at the Expiration Time, unless the
Company, in its sole discretion, shall have extended the period during which
the Exchange Offer is open, in which case the term "Expiration Time" means the
latest time and date at which the Exchange Offer, as so extended by the
Company, shall expire.
The Company expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend the period of time during which the
Exchange Offer is open by giving oral or written notice of such extension to
the Exchange Agent and making a public announcement thereof. There can be no
assurance that the Company will exercise its right to extend the Exchange
Offer. During any extension of the Exchange Offer, all shares of the
Preferred Stock previously tendered pursuant thereto and not exchanged or
withdrawn will remain subject to the Exchange Offer and may be accepted for
exchange by the Company at the expiration of the Exchange Offer subject to the
right of a tendering holder to withdraw its shares of the Preferred Stock.
See "Withdrawal Rights" below.
The Company expressly reserves the right to terminate the Exchange
Offer and not accept for exchange any shares of the Preferred Stock and
promptly return all shares to the remaining tendering holders thereof, at any
time prior to the Expiration Date for any reason.
The Company also expressly reserves the right, subject to applicable
law, (i) to delay acceptance for exchange of any shares of the Preferred Stock
to comply in whole or in part with applicable law, by giving oral or written
notice of such delay to the Exchange Agent, (ii) to waive any condition to the
Exchange Offer and accept all shares of the Preferred Stock previously
tendered pursuant thereto, (iii) to extend the Expiration Time and retain all
shares of the Preferred Stock tendered pursuant thereto until the expiration
of the Exchange Offer as extended, (iv) to amend the Exchange Offer in any
respect or (v) to modify the form or amount of the consideration to be paid
pursuant to the Exchange Offer. If the Exchange Offer is so amended, the term
"Exchange Offer" shall mean the Exchange Offer as so amended. The reservation
by the Company of the right to delay acceptance for exchange of shares of the
Preferred Stock is subject to the provisions of Rule 13e-4 and Rule 14e-1(c)
under the Exchange Act, which require that the Company pay the consideration
offered or return the shares of the Preferred Stock deposited by or on behalf
of holders thereof promptly after the termination or withdrawal of the
Exchange Offer.
Any extension, delay, termination or amendment of the Exchange Offer
will be followed as promptly as practicable by a public announcement thereof.
Without limiting the manner in which the Company may choose to make a public
announcement of any extension, delay, termination or amendment of the Exchange
Offer, the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by issuing a release to
the Dow Jones News Service, except in the case of an announcement of an
extension of the Exchange Offer, in which case the Company shall have no
obligation to publish, advertise or otherwise communicate such announcement
other than by issuing a notice of such extension by press release or other
public announcement, which notice shall be issued no later than 9:00 A.M., New
York City time, on the next business day after the previously scheduled
expiration date of the Exchange Offer.
If the Company shall decide, in its sole discretion, to decrease the
number of shares of the Preferred Stock being sought in the Exchange Offer or
to increase or decrease the consideration offered to holders of shares of the
Preferred Stock to be paid in the Exchange Offer and if, at the time that
notice of such increase or decrease is first published, sent or given to
holders of shares of the Preferred Stock in the manner specified above, the
Exchange Offer is scheduled to expire at any time earlier than the expiration
of a period ending on the tenth business day from and including the date that
such notice is first so published, sent or given, the Exchange Offer will be
extended until the expiration of such period of ten business days. As used in
this paragraph, "business day" has the meaning set forth in Rule 14d-1 (and
applicable to Regulation 14E) under the Exchange Act.
If the Company makes a material change in the terms of the Exchange
Offer or the information concerning the Exchange Offer, or waives any
condition of the Exchange Offer that results in a material change to the
circumstances of the Exchange Offer, the Company will disseminate additional
exchange offer materials to the extent required under the Exchange Act, and
will extend the Exchange Offer to the extent required in order to permit
holders of the shares of the Preferred Stock adequate time to consider such
materials. The minimum period during which the Exchange Offer must remain
open following material changes in the terms of the Exchange Offer or
information concerning the Exchange Offer, other than a change in price or
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the terms or information.
Procedure for Tendering Preferred Stock
The acceptance by a holder of shares of the Preferred Stock of the
Exchange Offer pursuant to one of the procedures set forth below will
constitute an agreement between the holder of such shares and the Company in
accordance with the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal.
For shares of the Preferred Stock to be validly tendered pursuant to
the Exchange Offer, the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message (as hereinafter defined) in connection with a book-entry
transfer of shares of the Preferred Stock, and any other required documents,
must be received by the Exchange Agent at one of its addresses set forth on
the back cover page of this Prospectus prior to the Expiration Time. In
addition, either (i) the certificates representing tendered shares of the
Preferred Stock must be received by the Exchange Agent or such shares of the
Preferred Stock must be tendered pursuant to the procedure for book-entry
transfer described below and a confirmation of receipt of such tendered shares
of the Preferred Stock must be received by the Exchange Agent, in each case
prior to the Expiration Time, or (ii) the tendering holder must comply with
the guaranteed delivery procedures described below.
The method of delivery of shares of the Preferred Stock, the Letter of
Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the holder tendering such shares and, except as otherwise
provided herein, the delivery will be deemed made only when actually received
by the Exchange Agent. If sent by mail, it is recommended that the holder use
properly insured registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the Expiration Time to permit
delivery to the Exchange Agent on or before the Expiration Time.
If a holder desires to tender shares of the Preferred Stock pursuant
to the Exchange Offer but is unable to locate the certificates representing
such shares to be tendered, such holder should write to or telephone First
Chicago Trust Company of New York, telephone number 201-324-0137, about
procedures for obtaining a replacement certificate for shares of the Preferred
Stock and arranging for indemnification.
NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING PREFERRED
STOCK SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE INFORMATION
AGENT. SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.
Any beneficial owner whose shares of the Preferred Stock are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact such registered holder
promptly and instruct such registered holder to tender on such beneficial
owner's behalf.
Book-Entry Transfer. The Company understands that the Exchange Agent
will make a request promptly after the date of this Prospectus to establish
accounts with respect to the shares of the Preferred Stock at DTC for the
purpose of facilitating the Exchange Offer, and, subject to the establishment
thereof, any financial institution that is a participant in DTC's system may
make book-entry delivery of shares of the Preferred Stock by causing DTC to
transfer such shares into the Exchange Agent's account with respect to the
shares of the Preferred Stock in accordance with DTC's procedures for such
transfer. Although delivery of shares of the Preferred Stock may be effected
through book-entry transfer into the Exchange Agent's accounts at DTC pursuant
to DTC's Automated Tender Offer Program ("ATOP") procedures, a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and other required documents, must in each case be
received by the Exchange Agent at one of its addresses set forth on the back
cover page of this Prospectus prior to the Expiration Time, or, if the
guaranteed delivery procedures described below are complied with, within the
time period provided under such procedures. DELIVERY OF DOCUMENTS TO DTC IN
ACCORDANCE WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
The term "Agent's Message" means a message, transmitted by DTC to, and
received by, the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgment
from the participant in DTC tendering the shares of the Preferred Stock which
are the subject of such book-entry confirmation, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Company may enforce such agreement against such participant.
Signature Guarantees. All signatures on a Letter of Transmittal must
be guaranteed by an Eligible Institution, unless the shares of the Preferred
Stock which are the subject of such Letter of Transmittal are tendered or
executed, respectively, (i) by a registered holder (which term, for the
purposes described above, shall include any participant in DTC whose name
appears on a security position listing as the owner of shares of the Preferred
Stock) of such shares who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution. If shares of the
Preferred Stock are registered in the name of a person other than the signer
of a Letter of Transmittal or if QUICS and/or certificates for untendered or
unexchanged shares of the Preferred Stock are to be issued or returned to a
person other than the registered holder, then the shares of the Preferred
Stock must be endorsed by the registered holder or be accompanied by a stock
power in form satisfactory to the Company duly executed by the registered
holder with such signatures guaranteed by an Eligible Institution. If
signatures on a Letter of Transmittal are required to be guaranteed, such
guarantees must be by a member firm of a registered national securities
exchange, a member of the NASD or by a commercial bank or trust company having
an office in the Untied States that is a participant in the Security Transfer
Agents Medallion Program or the Stock Exchange Medallion Program (each of the
foregoing being referred to as an "Eligible Institution").
Miscellaneous. Issuance of QUICS 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 total
number of shares of the Preferred Stock deposited with the Exchange Agent will
be deemed to have been tendered unless otherwise indicated.
All questions as to the form of all documents and the validity
(including the time of receipt), eligibility, acceptance and withdrawal of
tendered shares of the Preferred Stock will be determined by the Company, in
its sole discretion, which determination shall be final and binding. The
Company expressly reserves the absolute right to reject any and all tenders
not in proper form and to determine whether the acceptance of or exchange by
it for such tenders would be unlawful. The Company also reserves the absolute
right, subject to applicable law, to waive or amend any of the conditions of
the Exchange Offer or to waive any defect or irregularity in the tender of any
particular shares of the Preferred Stock. None of the Company, the Exchange
Agent, the Information Agent, the Dealer Managers or any other person will be
under any duty to give notification of any defects or irregularities in
tenders or will incur any liability for failure to give any such notification.
No tender of shares of the Preferred Stock will be deemed to have been validly
made until all defects and irregularities with respect to such shares have
been cured or waived. Any shares of the Preferred Stock received by the
Exchange Agent that are not properly tendered and as to which irregularities
have not been cured or waived will be returned by the Exchange Agent to the
appropriate tendering holder as soon as practicable. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding on all parties.
Guaranteed Delivery Procedures
If a holder desires to tender shares of the Preferred Stock and the
holder's shares are not immediately available or time will not permit the
holder's shares of the Preferred Stock, Letter of Transmittal or other
required documents to reach the Exchange Agent prior to the Expiration Time or
the procedure for book-entry transfer cannot be completed on a timely basis, a
tender may be effected if:
(a) the tender is made by or through an Eligible Institution;
and
(b) prior to the Expiration Time, the Exchange Agent receives
from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or
hand delivery) substantially in the form provided by the Company
which contains a signature guaranteed by an Eligible Institution in
the form set forth in such Notice of Guaranteed Delivery (unless such
tender is for the account of an Eligible Institution) which sets
forth the name and address of the holder of the shares of the
Preferred Stock and the number of shares of the Preferred Stock
tendered, states that the tender is being made thereby and guarantees
that within five NYSE trading days after the Expiration Time, the
Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's
Message in connection with a book-entry transfer of shares of the
Preferred Stock, and any other documents required by the Letter of
Transmittal, together with the shares of the Preferred Stock will be
deposited by the Eligible Institution with the Exchange Agent; and
(c) all tendered shares of the Preferred Stock (or a
confirmation of book-entry transfer of such shares into the Exchange
Agent's account at DTC) as well as the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any
required signature guarantees, or an Agent's Message in connection
with a book-entry transfer of shares of the Preferred Stock, and any
other documents required by the Letter of Transmittal, are received
by the Exchange Agent within five NYSE trading days after the
Expiration Time.
A Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile transmission or mail to the Exchange Agent and must
include a signature guarantee by an Eligible Institution in the form set forth
in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, in all cases QUICS will
only be issued in exchange for shares of the Preferred Stock accepted for
exchange pursuant to the Exchange Offer after timely receipt by the Exchange
Agent of certificates for such shares (or a confirmation of book-entry
transfer of such shares into 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 QUICS issuable upon the exchange of such tendered shares of the Preferred
Stock in accordance with the terms of the Exchange Offer, and that, when the
same are accepted for exchange, the Company will acquire good and unencumbered
title to the shares of the Preferred Stock free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim.
The Transferor also warrants that it will, upon request, execute and deliver
any additional documents deemed by the Company to be necessary or desirable to
complete the exchange, assignment and transfer of shares of the Preferred
Stock or transfer ownership of such shares of the Preferred Stock on the
account books maintained by DTC. All authority conferred by the Transferor
will survive the death, bankruptcy or incapacity of the Transferor and every
obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of such
Transferor.
Withdrawal Rights
Tenders of shares of the Preferred Stock pursuant to the Exchange
Offer are irrevocable, except that shares of the Preferred Stock tendered
pursuant to the Exchange Offer may be withdrawn at any time prior to the
Expiration Time and, unless theretofore accepted for exchange pursuant to the
Exchange Offer, may also be withdrawn at any time after 40 business days from
the date of this Prospectus.
To be effective, a written notice of withdrawal delivered by mail,
hand delivery or facsimile transmission must be timely received by the
Exchange Agent at the addresses set forth in the Letter of Transmittal. The
method of notification is at the risk and election of the holder. Any such
notice of withdrawal must specify (i) the holder named in the Letter of
Transmittal as having tendered shares of the Preferred Stock to be withdrawn,
(ii) if the shares of the Preferred Stock are held in certificated form, the
certificate numbers of the shares of the Preferred Stock to be withdrawn,
(iii) that such holder is withdrawing its election to have such shares of the
Preferred Stock exchanged, and the name of the registered holder of such
shares of the Preferred Stock, and such notice of withdrawal must be signed by
the holder in the same manner as the original signature on the Letter of
Transmittal (including any required signature guarantees) or be accompanied by
evidence satisfactory to the Company that the person withdrawing the tender
has succeeded to the beneficial ownership of the shares of the Preferred Stock
being withdrawn. The Exchange Agent will return the properly withdrawn shares
of the Preferred Stock promptly following receipt of notice of withdrawal. If
shares of the Preferred Stock have been tendered pursuant to the procedure for
book-entry transfer, any notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawn shares of the
Preferred Stock and otherwise comply with 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 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; Issuance of QUICS
The acceptance for exchange of shares of the Preferred Stock validly
tendered and not properly withdrawn will be made as promptly as practicable
after the Expiration Time. The Company expressly reserves the right to
terminate the Exchange Offer and not accept for exchange any of the shares of
the Preferred Stock at any time prior to the Expiration Date for any reason.
In addition, subject to the rules promulgated pursuant to the Exchange Act,
the Company expressly reserves the right to delay acceptance of any of the
shares of the Preferred Stock for exchange, to comply, in whole or in part,
with any applicable law. For purposes of the Exchange Offer, the Company will
be deemed to have accepted for exchange validly tendered and not properly
withdrawn shares of the Preferred Stock if, as and when the Company gives oral
or written notice thereof to the Exchange Agent. Subject to the terms and
conditions of the Exchange Offer, issuance of QUICS for shares of the
Preferred Stock accepted pursuant to the Exchange Offer will be made by the
Exchange Agent on the Issuance Date. The Exchange Agent will act as agent for
the tendering holders of shares of the Preferred Stock for the purposes of
receiving QUICS 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 QUICS 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
The dividend on the Preferred Stock payable on June 1, 1995 will be
payable to shareholders of record on May 19, 1995 regardless of when shares of
the Preferred Stock are tendered pursuant to the Exchange Offer. In addition,
holders of shares of the Preferred Stock accepted for exchange in the Exchange
Offer will receive cash in the amount of the Payment in Lieu of Accumulated
Dividends, payable on the Issuance Date to such holders.
Dividends on shares of the Preferred Stock not exchanged in the
Exchange Offer will continue to accrue and be payable when, as and if declared
in accordance with the terms of the shares of the Preferred Stock.
Dealer Managers
Lehman Brothers and Morgan Stanley & Co. Incorporated are acting as
Dealer Managers for the Exchange Offer under a Dealer Managers Agreement dated
____________, 1995 (the "Dealer Managers Agreement"). The Company has agreed
to pay the Dealer Managers predetermined compensation for their services in
connection with the Exchange Offer and to reimburse the Dealer Managers for
all of their reasonable out-of-pocket expenses, including the reasonable fees
and expenses of their legal counsel.
The Dealer Managers have agreed to use their best efforts to solicit
the exchange of shares of the Preferred Stock pursuant to the Exchange Offer.
The Company has agreed to indemnify the Dealer Managers against
certain liabilities, including certain liabilities under the federal
securities laws.
Fees and Expenses; Transfer Taxes
The expenses of soliciting tenders of the shares of the Preferred
Stock will be borne by the Company. For compensation to be paid to the Dealer
Managers, see "Exchange Offer -- Dealer Managers".
The Company will pay to a Soliciting Dealer (as hereinafter defined) a
solicitation fee of $.50 per share of the Preferred Stock for any share of the
Preferred Stock tendered and accepted for exchange pursuant to the Exchange
Offer if such Soliciting Dealer has solicited and obtained such tender.
"Soliciting Dealer" includes (i) any broker or dealer in securities, including
the Dealer Managers in their capacity as a broker or dealer, which is a member
of any national securities exchange or of the National Association of
Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not
eligible for membership in the NASD which agrees to conform to the NASD's
Rules of Fair Practice in soliciting tenders outside the United States to the
same extent as though it were an NASD member or (iii) any bank or trust
company. In order for a Soliciting Dealer to receive a solicitation fee with
respect to the tender of shares of the Preferred Stock, the Exchange Agent
must have received a Letter of Transmittal with the portion thereof entitled
"Notice of Solicited Tenders" properly completed and duly executed.
No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such
fee to a tendering holder (other than itself). The Dealer Managers may not,
until the Expiration Time, buy, sell, deal or trade in the shares of the
Preferred Stock for their own account. No broker, dealer, bank, trust company
or fiduciary shall be deemed to be the agent of the Company, the Exchange
Agent, the Dealer Managers or the Information Agent for purposes of the
Exchange Offer.
The Company will pay any transfer taxes with respect to transfer and
exchange of shares pursuant to the Exchange Offer. If, however, the QUICS 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 QUICS due in respect of the shares of
the Preferred Stock accepted for exchange if satisfactory evidence of the
payment of such taxes, or exemption therefrom, is not submitted.
Assuming all outstanding shares of the Preferred Stock are exchanged
pursuant to the Exchange Offer, it is estimated that the expenses incurred by
the Company in connection with the Offers (other than the solicitation fee of
$.50 per share of the Preferred Stock described above) will aggregate
approximately $_____. The Company will be responsible for paying all such
expenses and anticipates that they will be paid from available cash of the
Company.
Exchange Agent and Information Agent
First Chicago Trust Company of New York will act as exchange agent
for the Exchange Offer. All correspondence in connection with the Exchange
Offer, the Letter of Transmittal and the Notice of Guaranteed Delivery should
be addressed to the Exchange Agent as follows:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY HAND/OVERNIGHT COURIER BY MAIL
Tenders & Exchanges Tenders & Exchanges
Suite 4680-WC P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WCI
New York, NY 10005 Jersey City, NJ 07303
Facsimile Transmission
(For Eligible Institutions Only)
(201) 222-4720
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
Shareholder Inquiries Regarding Lost Certificates:
1-201-324-0137
The Exchange Agent is also the transfer agent for the Preferred Stock
and the common stock of the Company, a lender under the Credit Agreement dated
as of February 23, 1995 among the Company and certain of its subsidiaries and
the banks named therein, and provides cash management services to the Company
and its subsidiaries.
Morrow & Co., Inc. will act as Information Agent for the Exchange
Offer. In such capacity, the Information Agent will assist with the mailing
of the Prospectus and related materials to holders of shares of the Preferred
Stock, respond to inquiries of and provide information to holders of shares of
the Preferred Stock in connection with the Exchange Offer and provide other
similar advisory services as the Company may request from time to time. All
inquiries relating to the Exchange Offer should be directed to the Information
Agent as follows:
MORROW & CO., INC.
909 Third Avenue 14755 Preston Road, Suite 725
New York, New York 10022 Dallas, Texas 75240
Banks and Brokers call toll-free:
1-800-662-5200
All others call toll-free:
1-800-566-9058
The Company will pay the Information Agent and the Exchange Agent
their reasonable and customary compensation for their services in connection
with the Exchange Offer. In addition, the Company will reimburse the Exchange
Agent and the Information Agent for their reasonable out-of-pocket expenses,
and will indemnify the Exchange Agent and the Information Agent against
certain liabilities and expenses in connection with their services, including
certain liabilities under the federal securities laws. The Company will also
pay brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of
this Prospectus and related documents to beneficial holders of shares of the
Preferred Stock, and in handling or forwarding tenders or consents for their
customers.
Directors, officers and regular employees of the Company, none of
whom will be specifically compensated for such services, may contact holders
of shares of the Preferred Stock by mail, telephone, facsimile transmission,
telex, telegraph and personal interviews regarding the Exchange Offer, and may
request brokers, dealers, commercial banks, trust companies and other nominees
to forward this Prospectus (and all related materials) to beneficial owners of
shares of the Preferred Stock.
MARKET AND TRADING INFORMATION
The shares of the Preferred Stock are listed and traded on the NYSE.
The following table sets forth for the calendar periods indicated the high and
low closing sales prices for the shares of the Preferred Stock per share as
reported in published financial sources and the dividends paid on such shares:
Dividends
Paid
High Low Per share (1)
---- --- -------------
1993:
First Quarter................ 26 3/4 24 5/8 .5525
Second Quarter............... 27 7/8 25 7/8 .5525
Third Quarter................ 27 3/8 26 3/8 .5525
Fourth Quarter............... 27 1/2 25 7/8 .5525
1994:
First Quarter................ 26 7/8 24 7/8 .5525
Second Quarter............... 26 1/8 24 1/2 .5525
Third Quarter................ 26 1/4 25 .5525
Fourth Quarter............... 25 3/8 24 1/8 .5525
1995:
First Quarter................ 26 1/8 24 1/8 .5525
Second Quarter (through ).. (2)
____________
(1) An annual cash dividend of $2.21 per share is payable in quarterly
installments on March 1, June 1, September 1 and December 1 when and if
declared by the Board of Directors.
(2) The Company expects to pay its regular cash dividend of $.5525 on June 1,
1995 to holders of record on May 19, 1995.
On __________, 1995, the last full day the shares of the Preferred
Stock traded prior to the commencement of the Exchange Offer, the closing
sales price of the shares of the Preferred Stock on the NYSE as reported on
the Composite Tape was $______ per share. There can be no assurance
concerning the prices at which the shares of the Preferred Stock might be
traded following the Exchange Offer. The exchange of shares of the Preferred
Stock pursuant to the Exchange Offer will reduce the number of shares of the
Preferred Stock that might otherwise trade publicly and the number of holders
of such shares, and depending on the number of shares of the Preferred Stock
exchanged, could adversely affect the liquidity and market value of the
remaining shares of the Preferred Stock held by the public. Depending upon
the number of shares of the Preferred Stock exchanged pursuant to the Exchange
Offer, the Preferred Stock may no longer meet the requirements of the NYSE for
continued listing and may no longer continue to be registered under the
Exchange Act, either of which could adversely affect the market for the
Preferred Stock. See "Special Factors -- Purpose of the Exchange Offer;
Certain Effects of the Exchange Offer; Plans of the Company after the Exchange
Offer".
Holders of shares of the Preferred Stock are urged to obtain current
information with respect to the sales prices of shares of the Preferred Stock.
There has not been any public market for the QUICS. While the Company
intends to list the QUICS on the NYSE, there can be no assurance that an active
market for the QUICS will develop or be sustained in the future on such
exchange. Listing will depend upon the satisfaction of the NYSE's listing
requirements with respect to the QUICS, including requirements as to the
principal amount and distribution of the QUICS. Although the Dealer Managers
have indicated to the Company that they intend to make a market in the QUICS
as permitted by applicable laws and regulations, they are not obligated to do
so and may discontinue any such market-making at any time without notice.
Accordingly, no assurance can be given as to the liquidity of, or trading
market for, the QUICS.
TRANSACTIONS AND ARRANGEMENTS CONCERNING
THE SHARES OF THE PREFERRED STOCK
The shares of the Preferred Stock were issued by the Company in an
underwritten public offering for cash which was registered under the
Securities Act. The offering, which closed on September 3, 1992, was for
4,000,000 shares of the Preferred Stock at a price to the public of $25.00 per
share and the Company received aggregate proceeds of $96,500,000 after
deducting the aggregate underwriting discount of $3,500,000, but before
expenses.
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the
Company nor any of its subsidiaries nor, to the best of the Company's
knowledge, any of the directors or executive officers of the Company or any of
its subsidiaries, nor any associates of any of the foregoing, has effected any
transactions in the Preferred Stock since the issuance of the Preferred Stock
in 1992, except that the Company has effected open-market purchases of 369,900
shares of Preferred Stock for an aggregate price (not including commissions)
of $9,274,368 (average per share price of $25.15) and except that the spouse
of a former director purchased 2,000 shares of the Preferred Stock on the open
market in 1992 (at a price of $25 7/8 per share) and 500 shares of the
Preferred Stock on the open market in 1994 (at a price of $25 per share).
Except as set forth in this Exchange Offer, neither the Company nor,
to the best of the Company's knowledge, any of its affiliates, directors or
executive officers or any of the executive officers or directors of its
subsidiaries, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Exchange Offer with respect to any securities of the Company (including, but
not limited to, any contract, arrangement, understanding or relationship
concerning the transfer of the voting of any such securities, joint ventures,
loan or option arrangements, puts or calls, guarantees of loans, guarantees
against loss or the giving or withholding of proxies, consents or
authorizations). As of _______, 1995, neither the Company nor any subsidiary
or affiliate nor, to the Company's knowledge, any of their respective
directors or executive officers, owns any of the shares of the Preferred
Stock, except for 780 shares of the Preferred Stock owned by Keith E. Bailey,
Chairman of the Board, Chief Executive Officer, President and Director of the
Company, 4,000 shares of the Preferred Stock owned by the spouse of Robert J.
LaFortune, Director of the Company, and 2,000 shares of the Preferred Stock
owned by a trust of which Robert J. LaFortune is a beneficiary.
CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income
tax consequences of the ownership of QUICS as of the date hereof and
represents the opinion of Miller & Chevalier, Chartered, special tax counsel
to the Company, insofar as it relates to matters of law or legal conclusions.
It deals only with QUICS held as capital assets and acquired pursuant to the
Exchange Offer and does not deal with special situations, such as those of
dealers in securities or currencies, financial institutions, life insurance
companies, persons holding QUICS as a part of a hedging or conversion
transaction or a straddle, United States Holders (as defined below) whose
"functional currency" is not the U.S. dollar, or Non-United States Holders (as
defined below) who own (actually or constructively) ten percent or more of the
combined voting power of all classes of voting stock of the Company or whose
ownership of QUICS is effectively connected with the conduct of a trade or
business in the United States. Furthermore, the discussion below is based
upon the provisions of the Internal Revenue Code of 1986, as amended (the
"Code") and regulations, rulings and judicial decisions thereunder as of the
date hereof, and such authorities may be repealed, revoked or modified so as
to result in federal income tax consequences different from those discussed
below. Persons considering the purchase, ownership or disposition of QUICS
should consult their own tax advisors concerning the federal income tax
consequences in light of their particular situations as well as any
consequences arising under the laws of any other taxing jurisdiction.
United States Holders. As used herein, a "United States Holder" means a
beneficial owner of QUICS that is a citizen or resident of the United States,
a corporation, partnership or other entity created or organized in or under
the laws of the United States or any political subdivision thereof, or an
estate or trust the income of which is subject to United States federal income
taxation regardless of its source. A "Non-United States Holder" means a
beneficial owner of QUICS that is not a United States Holder.
Exchange of Preferred Stock for QUICS. The exchange of Preferred
Stock for QUICS pursuant to the Exchange Offer will be a taxable transaction.
In the case of a United States Holder who owns (actually or constructively)
solely shares of the Preferred Stock, or not more than one percent of the
Preferred Stock and not more than one percent of any other class of the
Company's stock, gain or loss will be recognized in an amount equal to the
difference between (i) the fair market value of the QUICS on the Issuance Date
(if the QUICS are traded on an established market) or the fair market value on
the Issuance Date of the Preferred Stock exchanged for the QUICS (if the QUICS
are not traded on an established market) and (ii) the exchanging holder's tax
basis in the Preferred Stock exchanged therefor and will be long-term capital
gain or loss if the Preferred Stock has been held for more than one year as of
such date. A United States Holder's aggregate tax basis in the QUICS will be
equal to the fair market value on the Issuance Date of either the QUICS or the
Preferred Stick, depending on whether the QUICS are traded on an established
market.
United States Holders of Preferred Stock owning (actually or
constructively) more than one percent of any other class of the Company's
stock may be treated either as recognizing gain or loss on the exchange of
Preferred Stock for QUICS or as receiving a dividend distribution from the
Company, depending on such Holders' particular circumstances. Such United
States holders are advised to consult their own tax advisers as to the income
tax consequences of exchanging Preferred Stock for QUICS.
In determining whether a United States Holder of Preferred Stock owns
solely shares of the Preferred Stock, or not more than one percent of the
Preferred Stock and not more than one percent of any other class of the
Company's stock, the United States Holder must take into account not only the
Preferred Stock and other stock of the Company that such Holder actually owns,
but also Preferred Stock and other stock of the Company that such Holder
constructively owns under Section 318 of the Code. Under Section 318, a
United States Holder may constructively own Preferred Stock and other stock of
the Company actually owned, and in some cases constructively owned, by certain
related individuals or entities, and Preferred Stock and other stock of the
Company that the Holder has the right to acquire by exercise of an option.
United States Holders should consult their own tax advisors about the
application of the constructive ownership rules of Section 318 to their
particular situations.
Original Issue Discount. Under the terms of the QUICS, the Company
has the option to defer payments of interest for up to 20 consecutive
quarterly interest payment periods and to pay as a lump sum at the end of such
period all of the interest that has accrued during such period. Because of
this option to extend the interest payment periods, the QUICS will be issued
with "original issue discount" ("OID"). A debt instrument bears OID if its
"stated redemption price at maturity" exceeds its "issue price" by more than a
de minimis amount. The issue price of the QUICS will be their fair market
value on the Issuance Date (if the QUICS are traded on an established market)
or the fair market value on the Issuance Date of the Preferred Stock exchanged
for the QUICS (if the QUICS are not traded on an established market). The
stated redemption price at maturity of a debt instrument generally includes
all amounts payable other than "qualified stated interest," which is defined
as payments that are unconditionally payable at least annually during the
entire term of the debt obligation at a single fixed rate of interest.
Because of the Company's option to defer payments of interest with respect to
the QUICS, none of the payments of stated interest on the QUICS will
constitute qualified stated interest. Thus, the QUICS will have OID in an
amount equal to the excess of all payments required to be made with respect to
the QUICS over their issue price.
A United States Holder will be required to include OID in income on a
current basis, in accordance with a constant yield method based on a
compounding of interest, even if such United States Holder is on the cash
method of accounting. Consequently, in the event that an interest payment
period is extended, a United States Holder will be required to include OID in
income notwithstanding that the Company will not make any interest payments on
the QUICS. A United States Holder will not recognize any income on the
receipt of stated interest with respect to a QUICS. A United States Holder's
tax basis in the QUICS will be increased by the amount of OID includible in
income and reduced by all payments received with respect to the QUICS.
As stated above, the issue price of the QUICS will be either their
fair market value on the Issuance Date or the fair market value on the
Issuance Date of the Preferred Stock exchanged for the QUICS, depending on
whether the QUICS are traded on an established market. Because the issue
price of the QUICS may not equal their principal amount, the yield on the
QUICS as computed for purposes of applying the OID rules may differ from the
stated interest rate on the QUICS. On the basis of current market prices and
the advice of the Dealer Managers, the Company expects that the issue price of
the QUICS will exceed their principal amount. If this expectation proves to
be correct, the amount of OID includible in income by a United States Holder
for any quarter will be less than the interest payment on the QUICS for that
quarter. If, on the other hand, the issue price of the QUICS is less than
their principal amount, the amount of OID includible in income by a United
States Holder for any quarter will exceed the interest payment on the QUICS
for that quarter.
Under applicable Treasury Regulations, for purposes of computing a
debt instrument's yield to maturity, the issuer is deemed to elect to exercise
any unconditional option available to it under the instrument if doing so
would minimize the yield on the instrument. If the issuer does not exercise
such an option, then, solely for purposes of determining the accrual of OID,
the yield and maturity of the instrument are redetermined by treating the
instrument as reissued for an amount equal to its adjusted issue price. The
Company's calculations of OID on the QUICS will reflect the Company's
assumption, as of the Issuance Date and solely for purposes of calculating OID
on the QUICS, as to whether the Company will exercise its right to redeem the
QUICS in 1997.
Sale, Exchange or Retirement of the QUICS. Upon the sale, exchange or
retirement of QUICS, a United States Holder will recognize gain or loss equal
to the difference between the amount realized upon the sale, exchange or
retirement and the adjusted tax basis of the QUICS. A United States Holder's
adjusted tax basis in QUICS will, in general, be the United States Holder's
initial basis therefor, increased by OID previously included in income by the
United States Holder and reduced by any cash payments on the QUICS. Such gain
or loss will be capital gain or loss and will be long-term capital gain or
loss if at the time of sale, exchange or retirement, the QUICS have been held
for more than one year. Under current law, net capital gains of individuals
are, under certain circumstances, taxed at lower rates than items of ordinary
income. The deductibility of capital losses is subject to limitations.
Non-United States Holders. The following summary of the United States federal
income tax consequences of ownership of QUICS by Non-United States Holders
does not address (i) a Non-United States Holder who owns (actually or
constructively) ten percent or more of the combined voting power of all
classes of voting stock of the Company or (ii) a Non-United States Holder
whose ownership of QUICS is effectively connected with such Holder's conduct
of a trade or business in the United States. Non-United States Holders who
own (actually or constructively) ten percent or more of the Company's voting
power or whose ownership of QUICS is effectively connected with a conduct of a
trade or business in the United States are urged to consult their own tax
advisors with respect to the United States federal tax consequences, as well
as other tax consequences, of ownership of QUICS.
Exchange of Preferred Stock for QUICS. Subject to the discussion below
concerning backup withholding, if a Non-United States Holder certifies to the
Company that such Holder owns (actually or constructively) solely shares of the
Preferred Stock, or not more than one percent of the shares of the Preferred
Stock and not more than one percent of any other class of the Company's stock,
the Company will not withhold United States federal income tax on the issuance
of QUICS to such Holder in exchange for Preferred Stock. In determining
whether it can make this certification, a Non-United States Holder must take
into account not only the Preferred Stock and other stock of the Company that
such Holder actually owns, but also Preferred Stock and other stock of the
Company that such Holder constructively owns under Section 318 of the Code.
See "United States Holders -- Exchange of Preferred Stock for QUICS" above.
Non-United States Holders should consult their own United States tax advisors
with respect to the application of the constructive ownership rules of Section
318 to their particular situations.
If a Non-United States Holder makes the certification described above,
any gain recognized by such Holder on the exchange of Preferred Stock for
QUICS will generally not be subject to United States federal income tax unless
(i) such Holder is an individual who is present in the United States for 183
days or more in the taxable year of the exchange and certain other conditions
are met or (ii) the Company is, or has been at any time during the five-year
period ending on the Issuance Date, a "United States real property holding
corporation and, at any time during such five-year period, such Holder owned
(actually or constructively) more than five percent of the Preferred Stock.
The Company has not determined whether it is, or has been, a United States
real property holding corporation. Non-United States Holders who have owned
(actually or constructively) more than five percent of the Preferred Stock at
any time during the past five years should consult their own United States tax
advisors.
If a Non-United States Holder does not provide the certification
described above, the Company will treat the fair market value of the QUICS
(or, if the QUICS are not traded on an established market, the fair market
value of the Preferred Stock exchanged for the QUICS) on the Issuance Date as
a dividend and will withhold federal income tax at a rate of 30% of this
amount unless such Non-United States Holder is entitled to a reduced rate of
withholding tax under the provisions of an income tax treaty, in which case
the tax will be withheld at the reduced rate. If the Company collects United
States withholding tax on the exchange of Preferred Stock for QUICS, a
Non-United States Holder may be eligible to obtain a refund of such tax from
the Internal Revenue Service if it establishes that the exchange does not give
rise to dividend income, as described above under "United States Holders --
Exchange of Preferred Stock for QUICS" or otherwise establishes a complete or
partial exemption from such withholding tax.
Payments on QUICS. Subject to the discussion of backup withholding below,
no withholding of United States federal income tax will be imposed with
respect to the payment by the Company or its paying agent of principal or
interest (which for purposes of this discussion includes OID) on QUICS to a
Non-United States Holder, provided that (i) such Non-United States Holder is
not a controlled foreign corporation that is related to the Company through
stock ownership, (ii) such Non-United States Holder is not a bank whose
receipt of interest on the QUICS is described in Section 881(c)(3)(A) of the
Code and (iii) either (y) such Non-United States Holder certifies to the
Company or its agent, under the penalties of perjury, that it is not a United
States person and provides its name and address on Form W-8 or its equivalent
or (z) a financial institution holding the QUICS on behalf of such Non-United
States Holder certifies to the Company or its agent, under penalties of
perjury, that such statement has been received by it and furnishes the Company
or its agent with a copy thereof.
Sale, Exchange or Retirement of the QUICS. Subject to the discussion of
backup withholding below, no United States federal income tax, including
withholding tax, will be imposed with respect to any gain realized by a
Non-United States Holder upon the sale, exchange or retirement of QUICS unless
such Holder is an individual who is present in the United States for 183 days
or more in the taxable year of such sale, exchange or retirement and certain
other conditions are met.
Federal Estate Taxes. QUICS beneficially owned by an individual who at
the time of death is a Non-United States Holder will not be subject to United
States federal estate tax as a result of such individual's death, provided
that the income on such QUICS would not have been, if received at the time of
such individual's death, effectively connected with the conduct of a trade or
business by such individual in the United States.
Backup Withholding and Information Reporting. In general, information
reporting may apply to (i) the QUICS issued in exchange for Preferred Stock
pursuant to the Exchange Offer, (ii) principal and interest (including OID) on
the QUICS, and (iii) the proceeds of sale of the QUICS if any such payments
are made to United States Holders other than certain exempt recipients (such
as corporations). A 31 percent backup withholding tax will apply to payments
described in the preceding sentence unless the United States Holder provides a
taxpayer identification number and otherwise complies with applicable backup
withholding rules.
No information reporting on IRS Form 1099 OID or backup withholding
will be required with respect to payments of principal and interest (including
OID) on the QUICS made by the Company or any paying agent to a Non-United
States Holder if the statement described in (iii) under "Non-United States
Holders -- Payments on QUICS" has been received and the payor does not have
actual knowledge that the beneficial owner is a United States person.
However, interest (including OID) on QUICS owned by Non-United States Holder
will be required to be reported annually on IRS Form 1042S.
Payments of the proceeds of the sale by a Non-United States Holder of
QUICS, and the exchange of Preferred Stock for QUICS pursuant to the Exchange
Offer, made to or through a foreign office of a broker will not be subject to
information reporting or backup withholding, except that if the broker is, for
federal income tax purposes, a United States person, a controlled foreign
corporation or a foreign person that derives 50% or more of its gross income
for a specified three-year period from the conduct of a trade or business in
the United States, such payments will not be subject to backup withholding but
may be subject to information reporting. Any such payments made to or through
the United States office of a broker will be subject to information reporting
and backup withholding unless the Non-United States Holder or the beneficial
owner certifies as to its non-United States status or otherwise establishes an
exemption.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against the Holder's U.S. federal income tax
liability provided the required information is furnished to the IRS.
DESCRIPTION OF QUICS
The QUICS will constitute a series of notes issued under the
Subordinated Debt Indenture, dated as of __________, 1995 (the "Indenture"),
between the Company and Chemical Bank, as trustee (the "Trustee"). The
following statements with respect to the QUICS 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 summaries of certain provisions of the Indenture do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the QUICS and the Indenture,
including the definitions therein of certain terms capitalized and not
otherwise defined in this Prospectus. Wherever references are made to
particular provisions of the Indenture or terms defined therein, such
provisions or definitions are incorporated by reference as part of the
statements made and such statements are qualified in their entirety by such
references.
The Indenture does not limit the amount of debt securities,
debentures, notes or other evidences of indebtedness that may be issued by the
Company or any of its Subsidiaries. The Indenture defines "Subsidiary" to
mean any corporation at least a majority of the outstanding securities of
which having ordinary voting power shall be owned by the Company and/or
another Subsidiary or Subsidiaries. All of the operating assets of the
Company and its Subsidiaries are owned by its Subsidiaries. Therefore, the
Company's rights and the rights of its creditors, including holders of QUICS,
to participate in the assets of any Subsidiary upon the latter's liquidation
or recapitalization will be subject to the prior claims of the Subsidiary's
creditors, except to the extent that the Company may itself be a creditor with
recognized claims against the Subsidiary. The ability of the Company to pay
principal of and interest on the QUICS 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.
General
The QUICS 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 QUICS issued in the Exchange Offer and will
mature on __________, 2025 (the "Stated Maturity"). The annual interest
requirement on the QUICS (assuming ______ shares of the Preferred Stock are
exchanged) will be $______.
Quarterly Payments
Interest on the QUICS will accrue from the Issuance Date at a rate of
____% per annum and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year commencing September 30, 1995, to
the persons in whose names the QUICS 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 QUICS 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 QUICS,
to extend any interest payment period on the QUICS to a period not to exceed
20 consecutive quarterly interest payment periods and, as a consequence, the
quarterly interest payments on the QUICS would be deferred (but would continue
to accrue with interest thereon at the rate of interest on the QUICS) during
any such Deferral Period. At the end of each Deferral Period, the Company
shall pay all interest then accrued and unpaid (compounded quarterly). In the
event the Company exercises this right, the Company shall not declare or pay
any dividend on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its Capital Stock or make any guarantee payments with
respect to the foregoing during such Deferral Period. Therefore, the Company
believes that the extension of a quarterly interest payment period on the
QUICS 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 QUICS or any date on which the
QUICS are fixed for redemption. The Company shall give the holders of QUICS
notice of its election to defer payments or to extend the Deferral Period ten
Business Days prior to the earlier of (i) the next scheduled quarterly payment
date and (ii) the date the Company is required to give notice of the record
date of such related interest payment to the NYSE or other applicable
self-regulatory organization or to the holders of the QUICS, but in any event
not less than two Business Days prior to such record date.
Optional Redemption
The QUICS will be redeemable at the option of the Company, in whole
or in part, at any time on or after September 1, 1997 and prior to maturity,
upon not less than 30 nor more than 60 days' notice, at a redemption price
equal to 100% of the principal amount redeemed plus accrued and unpaid
interest to the date fixed for redemption.
Discharge, Defeasance and Covenant Defeasance
The Company can discharge or defease its obligations under the
Indenture as set forth below.
Upon satisfaction of certain terms of the Indenture, the Company may
discharge certain obligations to holders of the QUICS 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 QUICS.
The Company may also, upon satisfaction of the conditions listed
below, discharge certain obligations to holders of QUICS at any time
("defeasance"). Upon satisfaction of certain terms of the Indenture, the
Company may instead be released with respect to the QUICS 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 QUICS; (ii) the Company delivers to the Trustee an
opinion of counsel to the effect that the holders of the QUICS 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 QUICS 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 QUICS would be entitled to certain
rights as secured creditors in such trust funds.
Events of Default
An Event of Default is defined under the Indenture with respect to
QUICS as being: (a) default in payment of any principal of the QUICS, either
at maturity, upon any redemption, by declaration or otherwise; (b) default for
30 days in payment of any interest on the QUICS; (c) default for 90 days after
written notice in the observance or performance of any covenant or warranty in
the QUICS 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 QUICS may then declare the entire
principal of all outstanding QUICS 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
QUICS 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 QUICS 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 QUICS 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 QUICS 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 QUICS 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 QUICS 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 QUICS 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 QUICS); (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; and (f) evidence the acceptance of appointment by a successor
trustee.
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than the majority in
principal amount of debt securities of each series issued under the Indenture
then outstanding and affected (voting as one class) to add any provisions to,
or change in any manner or eliminate any of the provisions of, the Indenture
or modify in any manner the rights of the holders of the debt securities of
each series so affected; provided that such changes conform to provisions of
the Trust Indenture Act and provided that the Company and the Trustee may not,
without the consent of each holder of outstanding debt securities affected
thereby, (a) extend the final maturity or the principal of any debt
securities, or reduce the principal amount thereof or reduce the rate or
extend the time of payment of interest thereon, or reduce any amount payable
on redemption thereof or change the currency in which the principal thereof
(including any amount in respect of original issue discount) or interest
thereon is payable, or reduce the amount of any original issue discount
security payable upon acceleration or provable in bankruptcy or alter certain
provisions of the Indenture relating to debt securities not denominated in
U.S. dollars or for which conversion to another currency is required to
satisfy the judgment of any court, or impair the right to institute suit for
the enforcement of any payment on any debt securities when due or (b) reduce
the aforesaid percentage in principal amount of debt securities of any series
issued under the Indenture, the consent of the holders of which is required
for any such modification.
The Indenture may not be amended to alter the subordination of any
outstanding subordinated debt securities issued thereunder (including the
QUICS) 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
QUICS) 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 QUICS 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 QUICS) or any other
obligations specifically designated as being subordinate in right of payment
to Senior Indebtedness) of, or guaranteed or assumed by, the Company for
borrowed money or evidenced by bonds, debentures, notes or other similar
instruments, and amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligation.
In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property or (b) that (i) a
default shall have occurred with respect to the payment of principal, premium,
if any, or interest on or other monetary amounts due and payable on any Senior
Indebtedness or (ii) there shall have occurred an Event of Default (other than
a default in the payment of principal, premium, if any, or interest, or other
monetary amounts due and payable) with respect to any Senior Indebtedness, as
defined therein or in the instrument under which the same is outstanding,
permitting the holder or holders thereof to accelerate the maturity thereof
(with notice or lapse of time, or both), and such Event of Default shall have
continued beyond the period of grace, if any, in respect thereof, and such
default or Event of Default shall not have been cured or waived or shall not
have ceased to exist, or (c) that the principal of and accrued interest on the
subordinated debt securities (including the QUICS) 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 QUICS) are entitled to receive
a payment on account of the principal, premium, if any, or interest on the
indebtedness evidenced by such subordinated debt securities.
On May 2, approximately $1.5 billion of Senior Indebtedness was
outstanding. The Indenture does not restrict the amount of Senior Indebtedness
that the Company may incur. In addition, the QUICS will also be effectively
subordinate to all existing and future obligations of the Company's
subsidiaries.
Form of QUICS
The QUICS will be issued in fully registered form, without coupons.
Investors may elect to hold QUICS 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 QUICS, payment of
interest and other payments on the QUICS to DTC Participants or Beneficial
Owners (as hereafter defined), confirmation and transfer of ownership
interests in the QUICS and other related transactions by and between DTC, the
DTC Participants and Beneficial Owners is based solely on information
contained in a published report of DTC.
DTC, an automated clearinghouse for securities transactions, will act
as securities depository for the QUICS. 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 the 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 the 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 QUICS
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 QUICS 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 QUICS 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 the 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 QUICS 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 QUICS 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
QUICS through DTC Participants will not possess QUICS in certificated form, the
DTC Participants will provide a mechanism by which holders of QUICS will
receive payments and will be able to transfer their interests.
None of the Company, the Trustee or any other agent of the Company
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interest in
such Global Certificate or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
If DTC or a successor depository is at any time unwilling or unable to
continue as depository of the Global Certificates and a successor depository
is not appointed by the Company within ninety days, the Company will issue
certificated QUICS in exchange for the Global Certificates. In addition, the
Company may at any time determine not to have QUICS represented by a Global
Certificate and, in such event, will issue certificated QUICS equal in
principal amount to such beneficial interest registered in its name and will
be entitled to physical delivery of such certificated QUICS.
Same-Day Settlement and Payment
Settlement for the QUICS will be made by a purchaser in immediately
available funds. While the QUICS 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.
QUICS 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 QUICS
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 QUICS.
Governing Law
The Indenture and the QUICS are governed by and construed in
accordance with the laws of the State of New York.
Concerning the Trustee
Chemical Bank is one of a number of banks with which the Company and
its subsidiaries maintain ordinary banking relationships and with which the
Company and its subsidiaries maintain credit facilities. Chemical Bank is
also Trustee under that certain Senior Debt Indenture dated as of July 19,
1990 relating to certain Senior Indebtedness of the Company.
DESCRIPTION OF THE PREFERRED STOCK
General
The following description relating to the Preferred Stock set forth
herein does not purport to be complete and is subject to, and qualified in its
entirety by, the provisions of the Company's Restated Certificate of
Incorporation ("Certificate"). Copies of the Certificate are available from
the Company upon request.
The Preferred Stock ranks equally with all other series of preferred
stock of the Company (the only other preferred stock of the Company currently
outstanding is 2.5 million shares of its series of $3.50 convertible preferred
stock) and senior to the Company's Junior Preferred Stock (none of which is
currently outstanding) and common stock upon liquidation and as to dividends
and redemption. If dividends or amounts payable on liquidation are not paid
in full on the preferred stock of all series, then all series share ratably in
the amount available therefor.
Dividends
Holders of the shares of the Preferred Stock are entitled to receive,
when and if declared by the Board of Directors, an annual cash dividend of
$2.21 per share, payable in quarterly installments on March 1, June 1,
September 1 and December 1. Dividends on the Preferred Stock are cumulative.
Dividends are payable to holders of record as they appear on the stock books
of the Company on such record dates not more than 60 nor less than 10 days
preceding the payment dates as shall be fixed by the Board of Directors.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of the
Company, the holders of shares of the Preferred Stock are entitled to receive
out of assets of the Company available for distribution to shareholders,
before any distribution of assets is made to holders of common stock,
liquidating distributions in the amount of $25 per share plus dividends
accrued and accumulated but unpaid to the redemption date. If upon any
liquidation, dissolution or winding up of the Company, the amounts payable
with respect to the Preferred Stock and any other Preferred Stock ranking as
to any such distribution on a parity with the Preferred Stock are not paid in
full, the holders of the Preferred Stock and of any other preferred stock of
the Company will share ratably in any such distribution of assets in
proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of shares of the Preferred Stock will not
be entitled to any further participation in any distribution of assets by the
Company. Neither a consolidation or merger of the Company with another
corporation nor a sale or transfer of all or part of the Company's assets for
cash or securities shall be considered a liquidation, dissolution or winding
up of the Company.
Optional Redemption
The Preferred Stock is not subject to any mandatory redemption or
sinking fund provision. The Preferred Stock is redeemable on at least 30 but
not more than 60 days' notice, at the option of the Company, as a whole or in
part, at any time on and after September 1, 1997 at a redemption price equal
to $25 per share plus dividends accrued and accumulated but unpaid to the
redemption date.
If full cumulative dividends on the Preferred Stock have not been
paid, the Preferred Stock may not be redeemed in part and the Company may not
purchase or acquire any shares of the Preferred Stock otherwise than pursuant
to a purchase or exchange offer made on the same terms to all holders of the
Preferred Stock. If less than all the outstanding shares of the Preferred
Stock are to be redeemed, the Company will select those to be redeemed by lot
or a substantially equivalent method.
Voting Rights
Except as indicated below, the holders of shares of the Preferred
Stock have no voting rights. If the equivalent of six quarterly dividends
payable on the Preferred Stock or on any other preferred stock is in arrears,
the number of directors of the Company will be increased by two and the
holders of all outstanding shares of the Preferred Stock, voting as a single
class without regard to series, will be entitled to elect the additional two
directors until all dividends in arrears have been paid or declared and set
apart for payment.
Miscellaneous
The Preferred Stock is not convertible into, or exchangeable for,
shares of common stock of the Company. The Preferred Stock has no preemptive
rights. All of the Preferred Stock are fully paid and nonassessable. The
Preferred Stock may not be called, retired or in any way redeemed, except
pursuant to the redemption provisions set out above.
LEGAL OPINIONS
The validity of the QUICS will be passed upon for the Company by J.
Furman Lewis, Esq., Senior Vice President and General Counsel of the Company,
and for the Dealer Managers by Davis Polk & Wardwell. Miller & Chevalier,
Chartered, special tax counsel to the Company, has passed upon certain United
States federal income tax considerations with respect to the QUICS.
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.
Facsimile copies of the Letter of Transmittal will be accepted.
Letters of Transmittal, certificates representing shares of the Preferred
Stock, Notices of Guaranteed Delivery and any other required documents should
be sent by each stockholder or his broker, dealer, commercial bank, trust
company or other nominee to the Exchange Agent at one of the addresses as set
forth below:
The Exchange Agent is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY HAND/OVERNIGHT COURIER BY MAIL
Tenders & Exchanges Tenders & Exchanges
Suite 4680-WCI P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WCI
New York, NY 10005 Jersey City, NJ 07303
Facsimile Transmission
(For Eligible Institutions Only)
(201) 222-4720
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
Shareholder Inquiries Regarding Lost Certificates:
1-201-324-0137
Any questions or requests for assistance or additional copies of this
Prospectus, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Information Agent or the Dealer Managers at their
respective telephone numbers and locations set forth below. You may also
contact your broker, dealer, commercial bank or trust company or other
nominee for assistance concerning the Exchange Offer.
The Information Agent is:
MORROW & CO., INC.
909 Third Avenue 14755 Preston Road, Suite 725
New York, New York 10022 Dallas, Texas 75240
Banks and Brokers call toll-free:
1-800-662-5200
All others call toll-free:
1-800-566-9058
The Dealer Managers for the Exchange Offer are:
Lehman Brothers
Liability Management Group
Three World Financial Center
200 Vesey Street
New York, NY 10285
Contact: David B. Parsons
1-800-438-3242 (toll free)
1-212-528-7581 (collect)
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York
1-800-422-6464 ext. 6905 (toll free)
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 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 the Company are insured, within the limits and
subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers.
Item 21. Exhibits and Financial Statement Schedules
Exhibit
No. Description
------- -----------
1.1 Form of Dealer Managers Agreement between the Company and
Lehman Brothers and Morgan Stanley & Co. Incorporated.
*2.1 Agreement and Plan of Merger, dated as of December 12, 1994,
among Williams, WC Acquisition Corp. and Transco (filed as
Exhibit (c)(1) to Schedule 14D-1, dated December 16, 1994).
*2.2 Amendment to Agreement and Plan of Merger, dated as of
February 17, 1995 (filed as Exhibit 6 to Amendment No. 8 to
Schedule 13D, dated February 23, 1995).
*4.1 Form of Senior Debt Indenture (filed as Exhibit 4.1 to the
Form S-3 Registration Statement No. 33-33294 filed February
2, 1990).
*4.2 Form of Subordinated Debt Indenture (filed as Exhibit 4.2 to
the Form S-3 Registration Statement No. 33-33294 filed
February 2, 1990).
*4.3 Form of Floating Rate Senior Note (filed as Exhibit 4.3 to
the Form S-3 Registration Statement No. 33-33294 filed
February 2, 1990).
*4.4 Form of Fixed Rate Senior Note (filed as Exhibit 4.4 to the
Form S-3 Registration Statement No. 33-33294 filed February
2, 1990).
*4.5 Form of Floating Rate Subordinated Note (filed as Exhibit 4.5
to the Form S-3 Registration Statement No. 33-33294 filed
February 2, 1990).
*4.6 Form of Fixed Rate Subordinated Note (filed as Exhibit 4.6 to
the Form S-3 Registration Statement No. 33-33294 filed
February 2, 1990).
*4.7 Form of Debt Warrant Agreement (filed as Exhibit 4.7 to the
Form S-3 Registration Statement No. 33-33294 filed February
2, 1990).
*4.8 Form of Stock Warrant Agreement (filed as Exhibit 4.8 to the
Form S-3 Registration Statement No. 33-49835 filed July 27,
1993).
*4.9 Restated Certificate of Incorporation of the Company (filed
as Exhibit 4(a) to Form 8-B Registration Statement filed
August 20, 1987).
*4.10 Certificate of Amendment of Restated Certificate of
Incorporation of the Company, dated May 20, 1994 (filed as
Exhibit 3(d) to Form 10-K for the year ended December 31,
1994).
*4.11 Certificate of designation with respect to the $2.21
Cumulative Preferred Stock (filed as Exhibit 4.3 to the
Registration Statement on Form S-3 filed August 19, 1992).
*4.12 Certificate of Increase of Authorized Number of Shares of
Series A Junior Participating Preferred Stock (filed as
Exhibit 3(c) to Form 10-K for the year ended December 31,
1988).
*4.13 Form of Certificate of Designation Preferences and Rights with
respect to the $3.50 Cumulative Convertible Preferred Stock
(filed as Exhibit 4.1 to Amendment No. 2 to Form S-4
Registration Statement No. 33-57639, filed March 30, 1995).
*4.14 Amended and Restated Rights Agreement, dated as of July 12,
1988, between the Company and First Chicago Trust Company of
New York (filed as Exhibit 4(c) to Form 8, dated July 28,
1988).
*4.15 By-laws of the Company (filed as Exhibit 3 to Form 10-Q for
the quarter ended September 30, 1993).
*4.16 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 (filed
as Exhibit 4(b) to Form 10-K for the year ended December 31,
1994).
*4.17 6% Convertible Subordinated Debenture Due 2005 and Warrant to
Purchase Common Stock issued to Williams Holdings of Delaware
on April 15, 1995 (filed as Exhibit 4.10 to Form S-8
Registration Statement No. 33-58969, filed May 1, 1995).
*4.18 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% Notes, 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 (filed as Exhibit 4.1 to Form S-3 Registration Statement
No. 33-33294, filed 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 of Miller & Chevalier, Chartered.
*12.1 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements (filed as Exhibit 12 to
Form 10-K for the year ended December 31, 1994).
23.1 Consent of Ernst & Young LLP.
23.2 Consent of J. Furman Lewis, Esq. (contained in Exhibit 5).
24.1 Directors' Powers of Attorney.
*25.1 Statement of Eligibility of Trustee.
99.1 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees.
99.2 Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and other nominees to their clients.
99.3 Form of Letter to holders of shares of Preferred Stock dated
, 1995.
99.4 Form of Letter of Transmittal.
99.5 Form of Notice of Guaranteed Delivery.
99.6 Form of Questions and Answers Sheet to be sent to holders of
shares of the Preferred Stock and to be used by Brokers,
Dealers, Commercial Banks, Trust Companies and other nominees
in responding to inquiries from their clients.
_____________________
* 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.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's Annual Report
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.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(6) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(7) To respond to requests for information that is incorporated
by reference into the Prospectus pursuant to Items 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.
(8) 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.
(b) 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 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.
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
post-effective amendment to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa,
State of Oklahoma, on May 16, 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 below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
_________________________
Keith E. Bailey* Chairman of the Board, Chief May 16, 1995
Executive Officer, President
and Director (principal
executive officer)
_________________________
Jack D. McCarthy* Senior Vice President Finance and May 16, 1995
Chief Financial Officer
(principal financial officer)
_________________________
Gary R. Belitz* Controller (principal accounting May 16, 1995
officer)
_________________________
Harold W. Anderson* Director May 16, 1995
_________________________
Ralph E. Bailey* Director May 16, 1995
_________________________
Glenn A. Cox* Director May 16, 1995
_________________________
Thomas H. Cruikshank* Director May 16, 1995
_________________________
Ervin S. Duggan Director May 16, 1995
_________________________
Robert J. LaFortune Director May 16, 1995
_________________________
James C. Lewis* Director May 16, 1995
_________________________
Jack A. MacAllister* Director May 16, 1995
_________________________
James A. McClure* Director May 16, 1995
_________________________
Peter C. Meinig Director May 16, 1995
_________________________
Kay A. Orr* Director May 16, 1995
_________________________
Gordon R. Parker* Director May 16, 1995
_________________________
Joseph H. Williams* Director May 16, 1995
*By: /s/ J. Furman Lewis
-----------------------
J. Furman Lewis
Attorney-in-fact
THE WILLIAMS COMPANIES, INC.
DEALER MANAGERS AGREEMENT
_________, 1995
Lehman Brothers
Three World Financial Center
200 Vesey Street
New York, NY 10285
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, NY 10020
Dear Sirs or Mesdames:
1. The Exchange Offer. The Williams Companies, Inc., a
Delaware corporation (the "Company") intends to make an offer (herein called,
together with any extensions thereof, the "Exchange Offer") for any and all
shares of the Company's $2.21 Cumulative Preferred Stock, par value $1.00,
(the "Preferred Stock") in exchange for a maximum of ______ in aggregate
principal amount of ____% Quarterly Income Capital Securities (Subordinated
Deferrable Interest Debentures Due 2025) (the "QUICS") to be issued under the
Indenture, dated as of , 1995, (the "Indenture"), between the
Company and Chemical Bank, as trustee (the "Trustee"), on the basis of $25
principal amount of QUICS for every share of Preferred Stock. The Exchange
Offer will be conducted upon the terms and subject to the conditions set forth
in the Exchange Offer Material (as defined below).
On the date of commencement of the Exchange Offer (the
"Commencement Date"), the Company will have filed with the Securities and
Exchange Commission (the "Commission") (a) a Post-Effective Amendment No. 1 on
Form S-4 to the Registration Statement on Form S-3 (file No. 33-49835),
including the Prospectus, dated May __, 1995 (as amended, supplemented or
modified from time to time and together with the exhibits thereto identified
therein, the "Exchange Offer Statement"), (b) a Transaction Statement on
Schedule 13E-3 (as amended, supplemented or modified at any time, and together
with the exhibits thereto, the "Schedule 13E-3"), and (c) an Issuer Tender
Offer Statement on Schedule 13E-4 (as amended, supplemented or modified at any
time, and together with the exhibits thereto, the "Schedule 13E-4"), each
pursuant to the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Commission thereunder (the "Exchange Act").
The Exchange Offer Statement, Schedule 13E-3, Schedule 13E-4, the form of
letter from the Dealer Managers to securities dealers, commercial banks, trust
companies and other nominees, the form of letter to beneficial owners of
shares of the Preferred Stock, the form of letter of transmittal (the "Letter
of Transmittal"), the form of notice of guaranteed delivery (the "Notice of
Guaranteed Delivery"), the form of Questions and Answers Sheet to be sent to
holders and to be used by brokers, dealers, commercial banks, trust companies
and other nominees in responding to inquiries from their clients, the form of
newspaper advertisements relating to the Exchange Offer, and the form of press
release relating to the Exchange Offer are collectively herein referred to as
the "Exchange Offer Material." All other statements and documents filed or to
be filed with any federal, state or local governmental or regulatory authority
and such other documents (including press releases, advertisements and other
offering material) as the Company may authorize for use in connection with the
Exchange Offer, as amended or supplemented from time to time, are collectively
herein referred to as the "Additional Material".
2. Appointment as Dealer-Manager. The Company hereby
appoints you as Dealer Managers and authorizes you to act as such in
connection with the Exchange Offer. As Dealer Managers, you agree in
accordance with your customary practice to use your best efforts to solicit
tenders of shares of Preferred Stock pursuant to the Exchange Offer and to
communicate with brokers, dealers, banks, trust companies and other persons
with respect to the Exchange Offer.
3. No Liability for Acts of Brokers, Dealers, Banks and
Trust Companies. You shall not be subject to any liability to the Company (or
any of the Company's other affiliates) for any act or omission on the part of
any broker or dealer in securities (other than yourself, your employees or
agents, which are covered in the next sentence) or any bank or trust company
or any other person. In addition, you shall not be liable for your own acts or
omissions or those of your employees or agents in performing your obligations
as Dealer Managers hereunder or otherwise in connection with the Company's
proposed exchange of QUICS for shares of the Preferred Stock, except for any
losses, claims, damages, liabilities and expenses determined in a final
judgment by a court of competent jurisdiction to have resulted directly from
any such acts or omissions undertaken or omitted to be taken by you through
your gross negligence or willful misconduct or the gross negligence or wilful
misconduct of your employees or agents. In soliciting or obtaining tenders,
you, as Dealer Managers, shall not be deemed to be acting as the agent to the
Company or as the agent of any broker, dealer, bank or trust company, and no
broker, dealer, bank or trust company shall be deemed to be acting as your
agent or as the agent of the Company.
4. The Exchange Offer Material. You are authorized to use
copies of the Exchange Offer Material and the Additional Material in
connection with your acting as Dealer Managers. You hereby agree that you
shall not disseminate any written material for or in connection with the
solicitation of tenders of shares of the Preferred Stock pursuant to the
Exchange Offer other than the Exchange Offer Material or any Additional
Material. The Company shall not amend or supplement the Exchange Offer
Material, or prepare or approve any Additional Material for use in connection
with the Exchange Offer, without your consent, which consent shall not be
unreasonably withheld.
The Company represents and agrees that no material other than
the Exchange Offer Statement, Schedule 13E-3, Schedule 13E-4 and the documents
to be filed therewith as exhibits thereto (each of which has heretofore been
approved by you) shall refer to you or shall be used in connection with the
Exchange Offer or filed with the Commission or any state or local governmental
or regulatory authority by or on behalf of the Company without your prior
approval, which approval shall not be unreasonably withheld. In the event
that the Company uses or permits the use of any such material in connection
with the Exchange Offer or files any such material with the Commission or any
such state or local governmental or regulatory authority without your prior
approval, then you shall be entitled to withdraw as Dealer Managers in
connection with the Exchange Offer without any liability or penalty to you or
any other person defined in paragraph 12 as an "Indemnified Person," and you
shall be entitled to receive the payment of all fees and expenses payable
under this Agreement which have accrued to the date of such withdrawal or
which otherwise thereafter become payable.
5. Compensation. (a) The Company agrees to pay you as
compensation for your services as Dealer Managers in connection with the
Exchange Offer, upon the acceptance for payment of shares pursuant to the
Exchange Offer, a fee equal to $.25 per share of the Preferred Stock accepted
for exchange.
(b) The Company agrees to pay to each Soliciting Dealer (as
defined herein) a solicitation fee of $.50 per share of the Preferred Stock
validly tendered and accepted for exchange pursuant to the Exchange Offer and
covered by a Letter of Transmittal which designates, as having solicited and
obtained the tender, the name of (i) any dealer or broker in securities,
including you in your capacity as a dealer or broker, who is a member of any
national securities exchange or of the National Association of Securities
Dealers, Inc. ("NASD"), (ii) any foreign dealer or broker not eligible for
membership in the NASD which agrees to confirm to the NASD's Rules of Fair
Practice in soliciting tenders outside the United States to the same extent as
though it were an NASD member, or (iii) any bank or trust company (each of
which is referred to herein as a "Soliciting Dealer"). No such fee shall be
paid to a Soliciting Dealer in respect of shares of the Preferred Stock unless
such shares are held by such Soliciting Dealer as nominee and such shares are
being tendered for the benefit or one or more beneficial owners (other than the
Soliciting Dealer) identified on the Letter of Transmittal. No such fee shall
be payable to a Soliciting Dealer with respect to the tender of shares of the
Preferred Stock by a holder unless the Letter of Transmittal accompanying such
tender designates such Soliciting Dealer. If the shares of the Preferred
Stock covered by the Letter of Transmittal are held by the Soliciting Dealer
as nominee for the tendering shareholder, the nominee may only be designated
as a Soliciting Dealer if the beneficial owner has so designated. No such fee
shall be payable to a Soliciting Dealer if such Soliciting Dealer is required
for any reason to transfer the amount of such fee to a depositing holder. No
Soliciting Dealer shall be deemed to be the agent of the Company.
6. Expenses of Dealer Managers and Others. The Company
agrees to directly pay for or to reimburse you, in connection with your
services as Dealer Managers, for (i) all reasonable expenses incurred by you
in connection with the preparation, printing, filing, mailing and publishing of
the Exchange Offer Material, (ii) all fees and expenses of the Depository
Trust Company (the "DTC"), the Trustee, the Exchange Agent and the Information
Agent, each referred to in the Exchange Offer Statement, (iii) all advertising
charges pertaining to the Exchange Offer, (iv) the reasonable cost of printing
or producing this letter agreement, any Blue Sky Memoranda, closing documents
(including any compilations thereof) and any other documents in connection
with the Exchange Offer, (v) all reasonable expenses in connection with the
qualification of the QUICS for offering under state securities laws and
securities laws of such other jurisdictions as may be necessary to effect the
Exchange Offer, including the reasonable fees and disbursements of counsel for
the Dealer Managers in connection with such qualification and any Blue Sky
survey, (vi) the cost of preparing the QUICS, (vii) all reasonable expenses in
connection with the tendering and cancellation of the Preferred Stock; (viii)
all fees payable to securities dealers (including you), commercial banks, trust
companies and nominees as reimbursement of their customary mailing and
handling expenses incurred in forwarding the Exchange Offer Material and
Additional Material to their customers, and (ix) all other reasonable
out-of-pocket expenses incurred by you in connection with the Exchange Offer
or your services as Dealer Managers hereunder (including, without limitation,
the reasonable fees and disbursements of your outside legal counsel). All
payments to be made by the Company to you pursuant to this paragraph 6 shall
be made promptly after the termination or expiration of the Exchange Offer or,
if later, promptly after the related fees, expenses or charges accrue and an
invoice therefor is sent by you. The Company shall perform its obligations
set forth in this paragraph whether or not the Exchange Offer commences or the
Company exchanges any shares pursuant to the Exchange Offer; provided that the
Company shall not be obligated to reimburse any expenses incurred after a
termination, for any reason, of this Agreement.
7. Shareholder Lists; DTC. The Company shall cause you to
be provided with cards or lists showing the names and addresses of, and the
number of shares of the Preferred Stock held by, the holders of shares as of a
recent date and shall use its best efforts to cause you to be advised from day
to day during the period of the Exchange Offer as to any transfers of record
of shares.
The Company has arranged for the DTC to serve as depository in
connection with the Exchange Offer and shall arrange for the DTC and the
Exchange Agent to advise you daily as to such matters as you may reasonably
request, including the number of shares which have been tendered pursuant to
the Exchange Offer.
8. Representations and Warranties of the Company. In
addition, the Company represents and warrants to you, and agrees with you,
that:
a. (i) The Company has filed with the Commission, on the
Commencement Date, the Exchange Offer Statement, Schedule 13E-3 and
Schedule 13E-4 pursuant to the Exchange Act. A copy of each of the
Exchange Offer Statement, Schedule 13E-3 and Schedule 13E-4
(including in each case the documents to be filed therewith as
exhibits thereto), in the form filed with the Commission, has been
approved by you. The Registration Statement (as defined in clause
(iii) below) has been filed with the Commission in the form
heretofore delivered to you, and has been declared effective by the
Commission in such form; no other document with respect to the
Registration Statement, Schedule 13E-3 or Schedule 13E-4 has
heretofore been filed with the Commission (other than prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder (the "Act"), each
in the form heretofore delivered to you).
(ii) The Exchange Offer Statement, Schedule 13E-3,
Schedule 13E-4, the Registration Statement, the Prospectus (as
defined in clause (iii) below), the other Exchange Offer Material and
the Additional Material complied, when so filed, and shall comply, as
of the Commencement Date and the Issuance Date (as defined in the
Prospectus), as to form in all material respects with the applicable
provisions of the Act, the Exchange Act, and the Trust Indenture Act
of 1939, as amended, and the rules and regulations thereunder (the
"Trust Indenture Act") and none of the Exchange Offer Statement,
Schedule 13E-3, Schedule 13E-4, the Registration Statement, the
Prospectus, any other Exchange Offer Material nor any Additional
Material, as any of the foregoing may be amended or supplemented from
time to time, contained, as of the time such document became
effective, if applicable, and none shall contain, as of the
Commencement Date and the Issuance Date, any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not misleading;
provided, however, that no representation is made with respect to any
statements contained in, or any matter omitted from, the Exchange
Offer Statement, Schedule 13E-3, Schedule 13E-4, the Registration
Statement, the Prospectus, any other Exchange Offer Material, any
Additional Material, or any amendments or supplements to any of the
foregoing, in reliance upon and in conformity with information
furnished in writing by you, your employees or your agent to the
Company expressly for use therein.
(iii) the various parts of the Registration
Statement on Form S-3 (file No. 33-49835), including all exhibits
thereto, all amendments (including any post-effective amendments) and
supplements thereto and the documents incorporated by reference
therein (but excluding the Statement of Eligibility and Qualification
of the Trustee (the "Form T-1")), as amended at the time such part of
the Registration Statement became effective or as thereafter amended
or supplemented from time to time, are herein collectively referred
to as the "Registration Statement"; the prospectus relating to the
QUICS and the Exchange Offer, in the form in which it has most
recently been filed with the Commission on or prior to the date of
this letter agreement, is herein referred to as the "Prospectus"; any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Exchange Act, and
incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to the Prospectus
as amended or supplemented in relation to the Exchange Offer in the
form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 10(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing).
b. The Exchange Offer shall comply in all material respects
with all applicable requirements of law, including any applicable
regulations of any court or governmental agency or authority, and no
consent, authorization, order, qualification or approval of or filing
or registration with any court or governmental agency or authority,
federal, state, local or foreign, is required in connection with the
making or consummation by the Company of the Exchange Offer other
than (A) the filing of the Exchange Offer Statement, Schedule 13E-3,
Schedule 13E-4, the Registration Statement, the Prospectus and in
each case any necessary amendments or supplements thereto, (B) the
filing of such documents and material, and the obtaining of such
consents, authorizations or approvals, as may be required by the laws
of various states relating to exchange offers.
c. The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, shall conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder and shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by you, your
employees or agents expressly for use in the Prospectus, as amended
or supplemented, relating to the Exchange Offer;
d. No stop order suspending the effectiveness of the
Registration Statement, Schedule 13E-3 or Schedule 13E-4 or affecting
the making or consummation of the Offer has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission or any court;
e. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware. The Company has all necessary corporate power and
authority to make and consummate the Exchange Offer. All necessary
corporate action has been duly taken by the Company to authorize the
making and consummation of the Exchange Offer, the issuance and
delivery of the QUICS in connection with the Exchange Offer and the
execution, delivery and performance of this Agreement, and this
Agreement has been duly executed and delivered on behalf of the
Company and is a valid and binding agreement of the Company;
f. Each of Northwest Pipeline Corporation, Williams Natural
Gas Company, Williams Energy Services Company, Williams Pipe Line
Company, Williams Telecommunications Services, Inc., Vyvex, Inc.,
Williams Field Services, Inc., Texas Gas Transmission Corporation,
and Transcontinental Gas Pipe Line Corporation is a corporation duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification and has all consents, authorizations,
approvals, orders, certificates and permits of and from all federal,
state, local and other governmental authorities, necessary to conduct
its business in the manner described in the Prospectus, except to the
extent that the lack of such qualifications, consents,
authorizations, approvals, orders, certificates or permits would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
g. Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, material to
the Company and its subsidiaries, taken as a whole, otherwise than as
set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material change
in the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken
as a whole, otherwise than as set forth or contemplated in the
Prospectus;
h. The Exchange Offer, the issuance and delivery of the
QUICS and the compliance by the Company with all of the provisions of
the QUICS and the Indenture and the execution, delivery and
performance of this Agreement shall not conflict with, violate or
result in a breach of any of the terms or provisions of, or
constitute a default (with or without due notice or lapse of time, or
both) under, the Restated Certificate of Incorporation or by-laws of
the Company, or any loan or credit agreement, indenture, mortgage,
note or other agreement or instrument or any statute or any judgment,
order or decree to which the Company or any of its affiliates is a
party or by which the Company or any of its affiliates or assets is
bound;
i. There are no legal, governmental or administrative
proceedings pending, or to the best knowledge of the Company,
threatened, to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its
Subsidiaries is the subject which would, if adversely determined,
reasonably be expected to affect or impair the making or consummation
of the Exchange Offer or which would, individually or in the
aggregate, have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole;
j. Neither the Company nor the Board of Directors received
any report, opinion (other than certain opinions of counsel) or
appraisal which is materially related to the Exchange Offer,
including, but not limited to, any report, opinion or appraisal
relating to the consideration or the fairness of the consideration to
be offered to the holders of the shares of the Preferred Stock or the
fairness of such transaction to the Company, and to the knowledge of
the Company, a majority of the directors who are not employees of the
Company have not retained any unaffiliated representative to act
solely on behalf of unaffiliated shareholders for the purposes of
negotiating the terms of the Exchange Offer;
k. except as disclosed in the Prospectus, the Company has no
present plans or proposals that would result in (i) the acquisition
by any person of additional securities of the Company, or the
disposition 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 merger of Transco Energy Company with a subsidiary of the
Company), involving the Company or any of its subsidiaries, (iii) any
change in the present Board of Directors or management of the
Company, including, but not limited to, a plan or proposal to change
the number or term of the directors, to fill any existing vacancy on
the Board of Directors or to change any material term of the
employment contract of any executive officer, except in each case in
connection with the Company's 1995 Annual Meeting of shareholders to
be held on May 18, 1995, (iv) any material change in the present
dividend rate or policy or indebtedness or capitalization of the
Company (except that it is anticipated that subsidiaries of the
Company will incur additional indebtedness, to which the QUICS will
be effectively subordinated), (v) any other material change in the
Company's corporate structure or business or (vi) any changes in the
Company's charter, bylaws or instruments corresponding thereto or any
other actions which would reasonably be expected to impede the
acquisition or control of the Company by any person;
l. The Company has an authorized capitalization as set forth
in the Prospectus;
m. The QUICS have been duly authorized, and, when executed,
authenticated, issued and delivered pursuant to the Exchange Offer
and the Indenture, shall have been duly executed, authenticated,
issued and delivered and shall constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture, substantially in the form filed as an exhibit to the
Registration Statement; and the Indenture has been duly authorized
[and duly qualified under the Trust Indenture Act] and, assuming due
authorization, execution and delivery thereof by the Trustee and
execution and delivery by the Company, constitutes a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
n. The Preferred Stock, the QUICS and the Indenture conform
in all material respects to the description thereof contained in the
Prospectus and Registration Statement;
o. On the Commencement Date, the Company shall have filed an
application for the listing of the QUICS on the New York Stock
Exchange (the "NYSE");
p. The Company is not, directly or indirectly, controlled
by, or acting on behalf of any person which is, an investment company
within the meaning of the Investment Company Act of 1940, as amended;
q. The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198, Laws of Florida);
r. The Company has made or shall make appropriate
arrangements with the Exchange Agent to allow for delivery of
tendered shares of the Preferred Stock in exchange for QUICS by
book-entry movement in the security clearance and cash accounts
operated by the Exchange Agent;
s. The Exchange Agent Agreement has been duly authorized by
the Company and, when executed and delivered, shall constitute a
valid and legally binding agreement of the Company;
t. The Company has made or shall make appropriate
arrangements with the Information Agent to allow for the Information
Agent to act as information agent for the Exchange Offer; and
u. The Information Agent Agreement has been duly authorized
by the Company and, when executed and delivered, shall constitute a
valid and legally binding agreement of the Company enforceable in
accordance with its terms.
9. Conditions to Your Obligations. Your obligation to act as
Dealer Managers with respect to the Exchange Offer shall at all times be
subject, in your discretion, to the conditions that:
a. All the Company's statements contained herein are now,
and at all times during the period of the Exchange Offer shall be,
true and correct in all material respects, it being understood that
your agreeing to act, or continuing to act, as Dealer Managers at a
time when you know or should know that any such statement is or may
be untrue or incorrect in a material respect shall be without
prejudice to your right subsequently to cease so to act by reason of
such untruth or incorrectness.
b. At all times during the period of the Exchange Offer, the
Company shall have performed in all material respects all of its
obligations hereunder and under the Exchange Offer Material or
Additional Material theretofore required to have been performed.
c. It shall not have become unlawful under any law or
regulation, Federal, state or local, for you to render services
pursuant to this Agreement, or to continue so to act, as the case may
be.
d. The Prospectus as amended or supplemented in relation to
the Exchange Offer shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with Section 10(a) hereof; no stop order or restraining order shall
have been issued and no lawsuit, claim, proceeding or action shall
have been commenced or, to the best of the Company's knowledge,
threatened with respect to the Exchange Offer or with respect to the
issuance and delivery of the QUICS before any court, agency or other
governmental body of any jurisdiction that you, in good faith after
consultation with counsel, believe renders it inadvisable for you to
continue to act hereunder and all requests for additional information
on the part of the Commission shall have been complied with to your
reasonable satisfaction.
e. On each of the Commencement Date and the Issuance Date,
the Company shall furnish to you an opinion of its General Counsel,
addressed to you, in the form attached hereto as Exhibit A and an
opinion of Messrs. Miller & Chevalier, Chartered, special counsel to
the Company, addressed to you, in the form attached hereto as Exhibit
B.
f. On each of the Commencement Date and the Issuance Date,
Davis Polk & Wardwell, your counsel, shall have furnished to you, as
Dealer Managers, an opinion or opinions, dated the respective date of
delivery thereof, with respect to the validity of the Indenture and
the QUICS, the Registration Statement, the Prospectus, and other
related matters as you may reasonably request and such counsel shall
have received such papers and information as they may reasonably
request to enable them to pass upon such matters.
g. On each of the Commencement Date and the Issuance Date,
the independent accountants of the Company who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement, the
Prospectus and the Schedules 13E-3 and 13E-4 shall have furnished to
you a letter, dated the respective date of delivery thereof, each in
a form reasonably satisfactory to you.
h. The Company shall have furnished to you on each of the
Commencement Date and the Issuance Date, a certificate or
certificates of officers of the Company reasonably satisfactory to
you as to, to the best of such officers' knowledge, the accuracy of
the representations and warranties of the Company in this letter
agreement in all material respects, as to the performance in all
material respects by the Company of all of its obligations hereunder
to be performed at or prior to such date, as to the matters set forth
in subsections (d) and (m) of this Section and as to such other
matters as you may reasonably request.
i. No change (or any condition, event or development
involving a prospective change) shall have occurred or been
threatened in the business, properties, assets, liabilities,
capitalization, stockholders' equity, financial condition, operations,
results of operations or prospects of the Company or any of its
subsidiaries, or in the general economic or financial market
conditions in the United States or abroad, which, in the reasonable
judgment of the Dealer Managers, is or may be materially adverse to
the Company and its subsidiaries or its stockholders or to the value
of the shares of the Preferred Stock and there shall have been no
significant decrease in the market prices of or trading in the shares
of the Preferred Stock, and the Dealer Mangers shall not have become
aware of any fact or occurrence which, in the reasonable judgment of
the Dealer Mangers, is or may be materially adverse with respect to
the value of the shares of the Preferred Stock or the Exchange Offer's
contemplated benefits to the Company.
j. On or after the date hereof, there shall not have
occurred (1) any general suspension of trading in, or limitation on
prices for, securities on any national securities exchange or the
over-the-counter market, (2) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States,
(3) declaration of a national emergency or a commencement of a war,
armed hostilities or other national or international calamity
directly or indirectly involving the United States, (4) any
limitation (whether or not mandatory) by any governmental or
regulatory authority on, or any other event which in the reasonable
judgment of the Dealer Managers might affect, the nature or extension
of credit by banks or other financial institutions, (5) any
significant adverse change in the United States securities or
financial markets, or (6) in the case of any of the foregoing
existing at the time of the commencement of the Exchange Offer, in
the reasonable judgment of the Dealer Managers, a material
acceleration, escalation or worsening thereof and which, with respect
to any of the above, makes it inadvisable to proceed with the
Exchange offer.
k. There shall not have been any action taken or threatened,
or any statute, rule, regulation, pronouncement, judgment, order or
injunction proposed, sought, promulgated, enacted, entered, enforced
or deemed applicable to the Exchange Offer by any local, state,
federal or foreign government or governmental authority or by any
court, domestic or foreign, that, in the reasonable judgment of the
Dealer Mangers, might, directly or indirectly, (1) make the acceptance
for exchange or issuance of QUICS for some or all of the shares of
the Preferred Stock illegal or otherwise restrict or prohibit
consummation of the Exchange Offer, (2) result in a delay in, or
restrict the ability of the Company, or render the Company unable,
to accept for exchange some or all of the shares of the Preferred
Stock or to issue some or all of the QUICS in exchange therefor, (3)
adversely affect the transactions contemplated by the Exchange Offer,
(4) otherwise adversely affect the Company or (5) result in a
material limitation in the benefits expected to be derived by the
Company as a result of the transactions contemplated by the Exchange
Offer.
l. There shall not be threatened, instituted or pending any
action, proceeding or claim by or before any court or governmental,
administrative or regulatory agency or authority or any other person
or tribunal, domestic or foreign, challenging the making of the
Exchange Offer, the acquisition by the Company of any shares of the
Preferred Stock, or seeking to obtain any material damages as a
result thereof, or, in the reasonable judgment of the Dealer
Managers, otherwise adversely affecting the Company or the value of
the shares of the Preferred Stock.
m. The Company shall have furnished to you on each of the
Commencement Date and the Issuance Date, such further information,
certificates and documents as you may reasonably request.
n. On each of the Commencement Date and the Issuance Date,
the Exchange Agent shall have furnished to you, as Dealer Managers, a
certificate, dated the respective date of delivery thereof, of an
appropriate officer of the Exchange Agent, in form and substance
reasonably satisfactory to you, to the effect that:
(1) the Exchange Agent has been duly incorporated and
is validly existing as a trust company in good standing under the
laws of the State of New York, with full power, authority and legal
right under such law to execute, delivery and carry out the terms
of the Exchange Agent Agreement;
(2) the Exchange Agent Agreement has been duly
authorized, executed and delivered by the Exchange Agent; and
(3) the Exchange Agent Agreement constitutes a valid
and binding obligation of the Exchange Agent.
o. On or prior to the Issuance Date, the QUICS shall have
been duly listed, subject to notice of issuance, on the NYSE.
p. On or prior to the Issuance Date, each of the Exchange
Agent Agreement and the Information Agent Agreement shall be in full
force and effect; and
q. On or prior to the Issuance Date, Moody's Investors
Service, Inc. and Standard & Poor's Ratings Group shall have publicly
assigned to the QUICS ratings acceptable to the Dealer Managers.
10. Covenants. The Company agrees with you:
a. To prepare the Prospectus in a form approved by you and
to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this letter agreement or,
if applicable, such earlier time as may be required by Rule 424(b);
to make no further amendment or any supplement to the Registration
Statement, Exchange Offer Statement, Schedule 13E-3, Schedule 13E-4 or
Prospectus as amended or supplemented after the date of this letter
agreement and prior to the Expiration Date, which shall be reasonably
disapproved by you promptly after reasonable notice thereof; so long
as the delivery of a prospectus is required in connection with the
offering or sale of the QUICS to advise you promptly of any such
amendment or supplement after such Expiration Date and furnish you
with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the QUICS; and so
long as the delivery of a prospectus is required in connection with
the offering or sale of the QUICS to advise you, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
with the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
prospectus relating to the Exchange Offer, of the suspension of the
qualification of the QUICS for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of
any prospectus relating to the QUICS or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
b. Promptly from time to time during the Exchange Offer and
following the Expiration Date to take such action as you may
reasonably request to qualify the Exchange Offer under the securities
laws of such jurisdictions as you may reasonably request and to
comply with such laws so as to permit the continuance of the Exchange
Offer therein in such jurisdictions, provided that in connection
therewith the Company shall not be required to file a general consent
to service of process in any jurisdiction;
c. Not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company which (i) have terms similar to
those of the QUICS or (ii) accrue interest at a rate similar to that
of the QUICS, from the date hereof and continuing until 7 days
following the Issuance Date without your prior written consent;
d. Not to purchase or offer to purchase any shares of the
Preferred Stock or of QUICS until the expiration of 10 business days
after termination of the Exchange Offer;
e. To furnish you with copies of the Prospectus, the
Schedule 13E-3 and the Schedule 13E-4, other Exchange Offer Materials
and any Additional Materials, each as amended or supplemented, in
such quantities as you may from time to time reasonably request, and,
if the delivery of a prospectus is required at any time in connection
with the Exchange Offer and if at such time any event shall have
occurred as a result of which the Prospectus, the Schedule 13E-3, the
Schedule 13E-4, any other Exchange Offer Material or any Additional
Material, as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus, the Schedule 13E-3, the Schedule 13E-4, any other
Exchange Offer Material or any Additional Material or to file under
the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify you promptly and to file such document
and to prepare and furnish without charge to you and to the dealer
through which QUICS may have been exchanged as many copies as you may
from time to time reasonably request of an amended Schedule 13E-3,
Schedule 13E-4, any other Exchange Offer Material or any Additional
Material, the Prospectus or a supplement to the Prospectus which
shall correct such statement or omission or effect such compliance;
f. To make generally available to its securityholders as
soon as practicable, an earnings statement covering a twelve-month
period beginning on the first day of the first full fiscal quarter
after the date of this Agreement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act;
g. To comply in all material respects with the Act, the
Exchange Act and the Trust Indenture Act in connection with the
Exchange Offer;
h. To use its best efforts to cause such QUICS to be duly
authorized for listing on the NYSE, subject to official notice of
issuance, and to be registered under the Exchange Act; and
i. Promptly to give you notice of any change of the record
date with respect to the Preferred Stock and notice of any change in
the Expiration Date.
11. Future Events. The Company shall advise you promptly of
(i) the occurrence of any event which may cause the Company to withdraw,
rescind or terminate the Exchange Offer, (ii) the withdrawal, rescission, or
termination of the Exchange Offer, (iii) any proposal or requirement to amend
or supplement the Exchange Offer Statement or the other documents to be filed
with the Commission relating to the Exchange Offer or to make any other filing
pursuant to any applicable law, (iv) the issuance by the Commission or any
other governmental or regulatory agency or authority of any comment or order
concerning the Exchange Offer, (v) any material development in connection with
the Exchange Offer and (vi) any other information relating to the Exchange
Offer which you may from time to time reasonably request.
12. Indemnification. The Company agrees to hold harmless and
indemnify you and your affiliates and any officer, director, employee or agent
of you or any such affiliates and any person controlling (within the meaning of
Section 20(a) of the Exchange Act) you or any of such affiliates
(collectively, the "Indemnified Persons") from and against any and all losses,
claims, damages, liabilities and expenses whatsoever (as incurred or suffered,
and including, but not limited to, any and all legal or other expenses
incurred in connection with investigating, preparing to defend or defending
any lawsuit, claim or other proceeding, commenced or threatened, whether or not
resulting in any liability, which legal or other expenses shall be reimbursed
by the Company promptly after receipt of any invoices therefor from you), (A)
arising out of or based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Exchange Offer Statement, the
Registration Statement, the Prospectus, Schedule 13E-3, Schedule 13E-4 or any
other Exchange Offer Material, any Additional Material or any amendment or
supplement to any of the foregoing or in any other material used by the Company
or authorized by the Company for use in connection with the Exchange Offer, or
arising out of or based upon the omission or alleged omission to state in any
such document a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading (other than statements or omissions made
in reliance upon and in conformity with information furnished by you in
writing to the Company expressly for use therein), (ii) any withdrawal or
termination by the Company of, or failure by the Company to make or
consummate, the Exchange Offer, (iii) any actions taken or omitted to be taken
by an Indemnified Person with the consent of the Company or in conformity with
actions taken or omitted to be taken by the Company or (iv) any breach by the
Company of any representation or warranty, or any failure by the Company to
comply with any agreement or covenant, contained in this Agreement or (B)
arising out of, relating to or in connection with or alleged to arise out of,
relate to or be in connection with the Exchange Offer or the performance of
your services as Dealer Managers with respect to the Exchange Offer. However,
the Company shall not be obligated to indemnify an Indemnified Person for any
loss, claim, damage, liability or expense pursuant to clause (B) of the
preceding sentence which has been determined in a final judgment by a court of
competent jurisdiction to have resulted directly from willful misconduct or
gross negligence on the part of such Indemnified Person.
If any lawsuit, claim or proceeding is brought against any
Indemnified Person in respect of which indemnification may be sought against
the Company pursuant to this paragraph 12, such Indemnified Person shall
promptly notify the Company of the commencement of such lawsuit, claim or
proceeding; provided, however, that the failure so to notify the Company shall
not relieve the Company from any obligation or liability which either of them
may have under this paragraph 12 except to the extent that they have been
prejudiced in any material respect by such failure and in any event shall not
relieve the Company from any other obligation or liability which either of
them may have to such Indemnified Person otherwise than under this paragraph
12. In case any such lawsuit, claim or proceeding shall be brought against
any Indemnified Person and such Indemnified Person shall notify the Company of
the commencement of such lawsuit, claim or proceeding, the Company shall be
entitled to participate in such lawsuit, claim or proceeding, and, after
written notice from the Company to such Indemnified Person, to assume the
defense of such lawsuit, claim or proceeding with counsel of its choice at its
expense; provided, however, that such counsel shall be satisfactory to the
Indemnified Person in the exercise of its reasonable judgment.
Notwithstanding the election of the Company to assume the defense of such
lawsuit, claim or proceeding, such Indemnified Person shall have the right to
employ separate counsel and to participate in the defense of such lawsuit,
claim or proceeding, and the Company shall bear the reasonable fees, costs and
expenses of such separate counsel (and shall pay such fees, costs and expenses
promptly after receipt of any invoice therefor from you) if (i) the use of
counsel chosen by the Company to represent such Indemnified Person would
present such counsel with a conflict of interest; (ii) the defendants in, or
targets of, any such lawsuit, claim or proceeding include both an Indemnified
Person and the Company and such Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it which are different
from or in addition to those available to the Company (in which case the
Company shall not have the right to direct the defense of such action on
behalf of the Indemnified Person); (iii) the Company shall not have employed
counsel satisfactory to such Indemnified Person, in the exercise of such
Indemnified Person's reasonable judgment, to represent such Indemnified Person
within a reasonable time after notice of the institution of such lawsuit,
claim or proceeding; or (iv) the Company shall authorize such Indemnified
Person in writing to employ separate counsel at the expense of the Company.
The foregoing indemnification commitments shall apply whether or not the
Indemnified Person is a formal party to any such lawsuit, claim or proceeding.
The Company shall not be liable for any settlement of any lawsuit, claim or
proceeding effected without their consent (which consent shall not be
unreasonably withheld), but if settled with such consent, the Company agrees,
subject to the provisions of this paragraph 12, to indemnify the Indemnified
Person from and against any loss, damage or liability by reason of such
settlement. The Company agrees to notify you promptly, or cause you to be
notified promptly, of the assertion of any lawsuit, claim or proceeding
against the Company, any of its officers or directors or any person who
controls any of the foregoing within the meaning of Section 20(a) of the
Exchange Act, arising out of or relating to the Exchange Offer. The Company
further agrees that any settlement of a lawsuit, claim or proceeding against
the Company arising out of or relating to the Exchange Offer shall include an
explicit and unconditional release from the parties bringing such lawsuit,
claim or proceeding of all Indemnified Persons, which release shall be
reasonably satisfactory to you.
The Company and you agree that if any indemni-fication sought by
any Indemnified Person pursuant to this paragraph 12 is held by a court to be
unavailable for any reason, other than that specified in the second sentence of
this paragraph 12, then (whether or not you are the Indemnified Person) the
Company on the one hand, and you, on the other hand, shall contribute to the
losses, claims, damages, liabilities and expenses for which such
indemnification is held unavailable in such proportion as is appropriate to
reflect the relative benefits to the Company on one hand, and you, on the
other hand, in connection with the matter giving rise to such losses, claims,
damages, liabilities and expenses, and other equitable considerations, subject
to the limitation that in any event your aggregate contribution to all losses,
claims, damages, liabilities and expenses with respect to which contribution
is available hereunder shall not exceed the amount of fees actually received
by you pursuant to this Agreement. It is hereby agreed that the relative
benefits to the Company on the one hand, and you, on the other hand, with
respect to the Exchange Offer shall be deemed to be in the same proportion as
(i) the aggregate value of the consideration paid or proposed to be paid to
the stockholders of the Company pursuant to the Exchange Offer (whether or not
the Exchange Offer is consummated) bears to (ii) the fees payable to you with
respect to the Exchange Offer.
The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages, liabilities or expenses referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such Indemnified Person in connection with investigating, preparing to
defend or defending any such action or claim.
The Company also agrees that no Indemnified Person shall have any
liability to the Company or any person asserting claims on behalf of or in
right of the Company in connection with this Agreement or your acting as Dealer
Managers hereunder, except for liabilities determined in a final judgment by a
court of competent jurisdiction to have resulted directly from any acts or
omissions undertaken or omitted to be taken by them through their gross
negligence or willful misconduct.
The foregoing rights to indemnification and contribution shall be
in addition to any other rights which you and the other Indemnified Persons
may have against the Company under common law or otherwise.
13. Indemnification, Representations and Warranties to Remain
Operative. The rights to indemnification and contribution contained in
paragraph 12 and the representations, warranties, covenants and agreements of
the Company set forth in this Agreement shall survive and remain operative and
in full force and effect regardless of (i) the failure to commence the Exchange
Offer, the consummation of the Exchange Offer, any withdrawal, rescission or
termination of the Exchange Offer for any reason whatsoever or any withdrawal
by you pursuant to paragraph 4 or otherwise and (ii) any investigation made
by or on behalf of any party hereto or any person controlling any party hereto
within the meaning of Section 20(a) of the Exchange Act.
14. Notices. All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by registered
or certified mail, return receipt requested, postage prepaid, to the parties
hereto as follows:
a. if to you:
Lehman Brothers Inc.
Three World Financial Center
200 Vesey Street
New York, NY 10285
Attention: Liability Management Group, 9th
Floor
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, NY 10020
Attention: Legal Department
b. if to the Company:
The Williams Companies, Inc.
One Williams Center
Tulsa, OK 74172
Attention: J. Furman Lewis, General Counsel
15. Miscellaneous. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement, which shall remain in full force
and effect.
This Agreement may not be amended or modified except in writing
signed by each of the parties and shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of laws principles thereof. The Company and you hereby irrevocably
and unconditionally consent to submit to the non-exclusive jurisdiction of the
courts of the State of New York and of the United States District Courts
located in the City of New York for any lawsuits, actions or other proceedings
arising out of or relating to this Agreement and agree not to commence any
such lawsuit, action or other proceeding except in such courts. The Company
further agrees that service of any process, summons, notice or document by
mail to the address set forth above shall be effective service of process for
any lawsuit, action or other proceeding brought against the Company in any
such court. The Company and you hereby irrevocably and unconditionally waive
any objection to the laying of venue of any lawsuit, action or other
proceeding arising out of or relating to this Agreement in the Courts of the
State of New York or the United States District Courts located in the City of
New York, and hereby further irrevocably and unconditionally waive and agree
not to plead or claim in any such court that any such lawsuit, action or other
proceeding brought in any such court has been brought in an inconvenient
forum. Any right to trial by jury with respect to any lawsuit, claim, action
or other proceeding arising out of or relating to this Agreement or the
services to be rendered by you hereunder is expressly and irrevocably waived.
This Agreement, including any right to indemnification and
contribution hereunder, shall inure to the benefit of and be binding upon the
Company, you and the other Indemnified Persons, and their respective successors
and assigns. Nothing in this Agreement, expressed or implied, is intended to
confer or does confer on any other person or entity any rights or remedies
hereunder or by virtue hereof.
All references to paragraphs or to exhibits or schedules in this
Agreement, unless otherwise indicated, are to paragraphs of or exhibits or
schedules to this Agreement. This Agreement may be executed in two or more
separate counterparts, each of which shall be deemed original, but all of
which together shall constitute one and the same instrument.
Please indicate your willingness to act as Dealer Managers and your
acceptance of the foregoing provisions by signing in the space provided below
for that purpose and returning to us a copy of this letter so signed, whereupon
this letter and your acceptance shall constitute a binding agreement between
us.
Very truly yours,
THE WILLIAMS COMPANIES, INC.
By: __________________________
Name:
Title:
Accepted and agreed as of the
date first above written:
LEHMAN BROTHERS
By: _______________________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By: _______________________
EXHIBIT A
, 1995
Lehman Brothers
Morgan Stanley & Co. Incorporated
c/o Lehman Brothers Inc.
3 World Financial Center
200 Vesey Street
New York, New York 10285
Ladies and Gentlemen:
I am General Counsel of The Williams Companies, Inc. (the
"Company"), which intends to make an offer for any and all shares of its $2.21
Cumulative Preferred Stock, par value $1.00 per share (the "Preferred Stock",
in exchange for a maximum of $_______ in aggregate principal amount of %
Quarterly Income Capital Securities (Subordinated Deferrable Interest
Debentures Due 2025)(the "QUICS"). Such exchange offer, on the terms and
subject to the conditions set forth in the Exchange Offer Material and
Additional Material described in the Dealer Managers Agreement referred to
below, is hereinafter referred to as the "Exchange Offer". Terms used in the
Dealer Managers Agreement are used herein as therein defined.
In that connection, I, in conjunction with the members of the
Legal Department of the Company, have examined the Exchange Offer Material and
Additional Material filed on or before the date hereof, a signed copy of the
agreement, dated , 1995, between the Company and you providing for
your services as Dealer Managers for the Exchange Offer (the "Dealer Managers
Agreement") and such other documents as I have deemed necessary or appropriate
for the purpose of this opinion and advise you as follows:
(1) The Registration Statement is effective under the Act and, to
the best of my knowledge, no stop order suspending the
effectiveness of the Registration Statement or affecting the
making or consummation of the Exchange Offer has been initiated
or threatened by the Commission or any court;
(2) The Exchange Offer Statement, the Registration Statement, the
Prospectus, the Schedule 13E-3, the Schedule 13E-4, the other
Exchange Offer Material, the Additional Material, if any, filed
on or before the date hereof and any further amendments and
supplements thereto made by the Company on or prior to the date
hereof (other than the financial statements and related
schedules, other financial data therein and the Form T-1, as to
which I express no opinion) comply as to form in all material
respects with the requirements of the Act, the Exchange Act and
the Trust Indenture Act;
(3) I have no reason to believe, after due inquiry, (a) that, as of
its effective date, the Registration Statement or any further
amendment thereto made by the Company on or prior to the date
hereof (other than the financial statements and related
schedules therein and except for that part of the Registration
Statement that constitutes the Form T-1, as to which I express
no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
(b) that, as of its date, any of the Exchange Offer Statement,
Schedule 13E-3, Schedule 13E-4 or the Prospectus, each as
amended or supplemented on or prior to the date hereof (other
than the financial statements and related schedules therein and
except for that part of the Registration Statement that
constitutes the Form T-1, as to which I need express no
opinion), contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in light of the circumstances in which they
are made, not misleading or (c) that, as of the date hereof,
any of the Exchange Offer Statement, the Registration
Statement, Schedule 13E-3, Schedule 13E-4 or the Prospectus,
each as amended or supplemented, or any further amendment or
supplement thereto made by the Company on or prior to the date
hereof (other than the financial statements and related
schedules therein and except for that part of the Registration
Statement that constitutes the Form T-1, as to which I express
no opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made,
not misleading;
(4) I do not know of any amendment to the Registration Statement
required to be filed or of any statutes, regulations, contracts
or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to be
described in the Registration Statement or the Prospectus which
are not filed or incorporated by reference or described as
required;
(5) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements
and related schedules therein and except for those parts of the
Registration Statement which constitute the Form T-1, as to
which I express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the Act
or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and I have no reason
to believe that any of such documents, when they became
effective or were so filed, as the case may be, contained, an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statement therein, in light of the circumstances under
which they were made when such documents were so filed, not
misleading;
(6) Nothing has come to my attention, after due inquiry, to
indicate that either the Company or any of its subsidiaries has
sustained, since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, material to the Company
and its subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the
Registration Statement and the Prospectus, to the best of my
knowledge, after due inquiry, there has not been any material
change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in
or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Prospectus;
(7) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Delaware, with all necessary corporate power and authority
to make and consummate the Exchange Offer;
(8) Each of Northwest Pipeline Corporation, Williams Natural Gas
Company, Williams Energy Services Company, Williams Pipe Line
Company, Williams Telecommunications Services, Inc., Vyvex,
Inc., Williams Field Services, Inc., Texas Gas Transmission
Corporation, and Transcontinental Gas Pipe Line Corporation is
a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation, is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification and has all consents, authorizations, approvals,
orders, certificates and permits of and from all federal,
state, local and other governmental authorities, necessary to
conduct its business in the manner described in the Prospectus,
except to the extent that the lack of such qualifications,
consents, authorizations, approvals, orders, certificates or
permits would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(9) The execution and delivery of the Dealer Managers Agreement,
the Exchange Agent Agreement, the Information Agent Agreement
and all other documents to be executed and delivered by the
Company pursuant to the Dealer Managers Agreement and the
making and consummation of the Exchange Offer have been duly
authorized by the Company and each of the Dealer Managers
Agreement, the Exchange Agent Agreement and the Information
Agent Agreement constitute a valid and legally binding
agreement of the Company, enforceable against the Company in
accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles and except as rights to indemnity and
contribution thereunder may be limited under applicable laws;
(10) The QUICS have been duly authorized by the Company, and, when
executed, authenticated, issued and delivered pursuant to the
Exchange Offer and the Indenture, will have been duly executed,
authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the
benefits provided by the Indenture, substantially in the form
filed as an exhibit to the Registration Statement; and the
Indenture has been duly authorized by the Company [and duly
qualified under the Trust Indenture Act] and, on the date
hereof, assuming due authorization, execution and delivery
thereof by the Trustee and execution and delivery by the
Company, will constitute valid and legally binding obligations,
enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(11) The statements in the Prospectus under the captions
"Description of QUICS" and "Description of the Preferred
Stock," to the extent such statements constitute summaries of
legal matters or documents, have been reviewed by me and are
correct in all material respects;
(12) The Preferred Stock, the QUICS and the Indenture conform in all
material respects to the description thereof contained in the
Prospectus and the Registration Statement;
(13) The authorized capital stock of the Company conforms as to
legal matters to the description thereof set forth in the
Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued
and are fully paid and non-assessable;
(14) To the best of my knowledge, after due inquiry, and other than
as set forth in the Prospectus, there are no legal,
governmental or administrative actions, suits or proceedings
pending to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would reasonably be
expected to affect or impair the making or consummation of the
Exchange Offer or which would individually or in the aggregate
have a material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole; and, to the best
of my knowledge, no such actions, suits or proceedings are
threatened or contemplated by governmental authorities or
threatened by others; and
(15) The making and consummation of the Exchange Offer, the
execution, delivery and performance by the Company of the
Dealer Managers Agreement, the issuance and delivery of the
QUICS and the compliance by the Company with all of the
provisions of the QUICS, the Indenture and the Dealer Managers
Agreement and the consummation of the transactions contemplated
therein (a) do not and will not conflict with, violate or
result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, any loan or
credit agreement, indenture, mortgage, note or other agreement
or instrument known to me, after due inquiry, to which the
Company or any of its subsidiaries is a party or by which it is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (b) will not result in
any violation of the provisions of the Restated Articles of
Incorporation or By-laws of the Company or any statute or any
judgment, order, or decree known to me of any court or
governmental agency or authority, except that I express no
opinion as to rights of indemnity which may be limited by
applicable law; and (c) do not require any consent, approval,
authorization, order, or qualification of or filing or
registration with any such court or governmental agency or
authority having jurisdiction over the Company or any of its
subsidiaries other than (A) the filing of the Exchange Offer
Statement, the Schedule 13E-3, the Schedule 13E-4, the
Registration Statement, the Prospectus and in each case any
necessary amendments or supplements thereto, (B) the filing of
such documents and material, and the obtaining of such
consents, authorizations or approvals, as may be required by
the laws of various states relating to the Exchange Offer (as
to which I express no opinion).
I am licensed to practice in the State of Oklahoma and express
no opinions as to laws of any other jurisdiction except under the Federal law
of the United States. With respect to matters relating to New York law, I
have relied with their consent on the opinion of Davis Polk & Wardwell. This
opinion is for your benefit and is not to be relied upon by any other parties
without my express written consent.
Very truly yours,
J. FURMAN LEWIS
EXHIBIT B
[Opinion of Tax Counsel]
To come
[LETTERHEAD OF THE WILLIAMS COMPANIES, INC.]
May 16, 1995
The Williams Companies, Inc.
One Williams Center
Tulsa, OK 74172
Dear Sirs:
The Williams Companies, Inc., a Delaware corporation (the "Company"), has
filed on the date hereof a Post Effective Amendment No. 1 on Form S-4 (the
"Post-Effective Amendment") to its Registration Statement on Form S-3
(Registration No. 33-49835, the "Registration Statement", which term shall
encompass all amendments thereto), under the Securities Act of 1933 (the
"Act") in connection with the proposed exchange by the Company of up to
3,630,100 shares of its $2.21 Cumulative Preferred Stock (the "Preferred
Stock") for Quarterly Income Capital Securities (Subordinated Deferrable
Interest Debentures due 2025) (the "QUICS") of the Company (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 QUICS. Based on such examination, it is
my opinion that the QUICS have been duly authorized and, when (i) 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 of the Indenture by
each of the parties thereto, and (ii) exchanged for the Preferred Stock in
accordance with the terms of the Exchange Offer, 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 QUICS.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Post-Effective Amendment 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
[LETTERHEAD OF MILLER & CHEVALIER]
The Williams Companies, Inc.
One Williams Center
Tulsa, Oklahoma 74172
Re: The Williams Companies, Inc.
Exchange Offer
Dear Sir or Madam:
We have reviewed the Registration Statement dated May 16, 1995,
describing the Quarterly Income Capital Securities ("QUICS") to be issued by
The Williams Companies, Inc. and due 2025.
This will confirm that, in our opinion, the consequences described
under the heading "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS" in
the Prospectus dated May 16, 1995 are the material United States federal
income tax consequences of acquiring and owning QUICS under present law and
that the descriptions contained under that heading are fair, complete, and
accurate in all material respects. Our opinion is subject to the
qualifications stated in the first paragraph under that heading.
Very truly yours,
MILLER & CHEVALIER, CHARTERED
By: /s/ F. Brook Voght
------------------
F. Brook Voght
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Post-Effective Amendment No. 1 on Form S-4 to the Registration Statement
(Form S-3 No. 33-49835) and related Prospectus of The Williams Companies,
Inc. 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
May 16, 1995
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-3 for the
registration on a continuing basis under Rule 415 under the Securities Act of
1933, as amended, of up to three hundred million dollars ($300,000,000)
initial aggregate offering price of Common Stock, Preferred Stock and Debt
Securities of Williams, and any and all 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 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 5th day of May, 1993.
/s/ Joseph H. Williams /s/ Jack D. McCarthy
- --------------------------------- ----------------------------
Joseph J. Williams Jack D. McCarthy
Chairman of the Board Senior Vice President
and Chief Executive Officer (Principal Financial
(Principal Executive Officer) and Accounting Officer)
/s/ Harold W. Andersen /s/ Keith E. Bailey
- --------------------------------- ----------------------------
Harold W. Andersen Keith E. Bailey
Director Director
/s/ Ralph E. Bailey /s/ Glenn A. Cox
- --------------------------------- ----------------------------
Ralph E. Bailey Glenn A. Cox
Director Director
/s/ Thomas H. Cruikshank
- --------------------------------- ----------------------------
Thomas H. Cruikshank Robert J. LaFortune
Director Director
/s/ James C. Lewis /s/ James A. McClure
- --------------------------------- ----------------------------
James C. Lewis James A. McClure
Director Director
/s/ Joseph W. Morris /s/ Gordon R. Parker
- --------------------------------- ----------------------------
Joseph W. Morris Gordon R. Parker
Director Director
/s/ Kay A. Orr /s/ John H. Williams
- --------------------------------- ----------------------------
Kay A. Orr John H. Williams
Director Director
/s/ David R. Williams, Jr.
- ---------------------------------
David R. Williams, Jr.
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
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-3 for the
registration on a continuing basis under Rule 415 under the Securities Act of
1933, as amended, of up to three hundred million dollars ($300,000,000)
initial aggregate offering price of Common Stock, Preferred Stock and Debt
Securities of Williams, and any and all 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 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 12th day of May, 1995.
/s/ Keith E. Bailey /s/ Gary R. Belitz
- --------------------------------- ----------------------------
Keith E. Bailey Gary R. Belitz
Chairman of the Board, President Controller
and Chief Executive Officer (Chief Accounting Officer)
(Principal Executive Officer)
EXHIBIT 99-1
THE WILLIAMS COMPANIES, INC.
Offer to Exchange
% Quarterly Income Capital Securities (QUICS(SM))
(Subordinated Deferrable Interest Debentures Due 2025)
for
$2.21 CUMULATIVE PREFERRED STOCK
- ------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL
RIGHTS WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME
ON , 1995, UNLESS EXTENDED.
- ------------------------------------------------------------------------------
_______, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We are enclosing the materials listed below relating to the offer of
The Williams Companies, Inc. (the "Company") to exchange up to $____ in
aggregate principal amount of ____% Quarterly Income Capital Securities (the
"QUICS") (Subordinated Deferrable Interest Debentures Due 2025) for any and
all shares of the $2.21 Cumulative Preferred Stock, $1.00 par value, (the
"Preferred Stock") of the Company, upon the terms and subject to the
conditions set forth in the Prospectus dated ________, 1995 (the "Prospectus")
and in the related Letter of Transmittal (which, together with the Prospectus,
constitute the "Exchange Offer").
Enclosed herewith are copies of the following documents:
1. The Prospectus;
2. The Letter of Transmittal to be used by registered holders
of shares of the Preferred Stock in accepting the Exchange Offer;
3. A printed form of letter which may be sent to your clients
for whose account you hold shares of the Preferred Stock in your name or in
the name of your nominee, with space provided for obtaining such clients'
instructions with regard to the Exchange Offer;
4. The Notice of Guaranteed Delivery to be used to accept the
Exchange Offer if shares of the Preferred Stock are not immediately
available or if the procedure for book-entry transfer cannot be completed
on a timely basis;
5. A Questions and Answers sheet which has been sent to
holders and which may be used by you in responding to inquiries from your
clients; and
6. A return envelope addressed to First Chicago Trust Company
of New York, the Exchange Agent.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY.
PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON ________, 1995, UNLESS EXTENDED.
The Company will reimburse brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by
them in forwarding the Prospectus and the related documents to the beneficial
owners of shares of the Preferred Stock held by them as nominees or in a
fiduciary capacity and in handling or forwarding tenders for their customers.
The Company will pay to a Soliciting Dealer (as herein defined) a
solicitation fee of $.50 per share of the Preferred Stock for any share
tendered and accepted for exchange pursuant to the Exchange Offer if such
Soliciting Dealer has solicited and obtained such tender. "Soliciting
Dealer" includes (i) any broker or dealer in securities, including the
Dealer Managers in their capacity as a broker or dealer, which is a member
of any national securities exchange or of the National Association of
Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer
not eligible for membership in the NASD which agrees to conform to the
NASD's Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member or (iii) any
bank or trust company. In order for a Soliciting Dealer to receive a
solicitation fee with respect to the tender of shares of the Preferred
Stock, the Exchange Agent must have received a properly completed and
executed form (from the Letter of Transmittal or otherwise) entitled
"Notice of Solicited Tenders".
No fee shall be paid to a Soliciting Dealer except for shares held by
such Soliciting Dealer as Nominee. No such fee shall be payable to a
Soliciting Dealer if such Soliciting Dealer is required for any reason to
transfer the amount of such fee to a tendering holder (other than itself).
The Dealer Managers may not, until the Expiration Time, buy, sell, deal or
trade in the shares of the Preferred Stock for their account. No broker,
dealer, bank, trust company or fiduciary shall be deemed to be the agent of
the Company, the Exchange Agent, the Dealer Managers or the Information Agent
for purposes of the Exchange Offer.
The Company 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
shares of the Preferred Stock, at any time for any reason. See "The Exchange
Offer -- Expiration; Extension; Termination; Amendment" in the Prospectus.
Additional copies of the enclosed materials may be obtained by
contacting Morrow & Co., the Information Agent, at 909 Third Avenue, New York,
NY 10022.
Very truly yours,
LEHMAN BROTHERS MORGAN STANLEY & CO.
INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU THE AGENT OF THE WILLIAMS COMPANIES, INC., THE DEALER MANAGERS,
THE EXCHANGE AGENT OR THE INFORMATION AGENT, OR AUTHORIZE YOU TO MAKE ANY
STATEMENT OR USE ANY DOCUMENT IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN
THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
Enclosures
The Dealer Managers for the Exchange Offer are:
Lehman Brothers
Liability Management Group
Three World Financial Center
200 Vesey Street
New York, NY 10285
Contact: David B. Parsons
1-800-438-3242 (toll free)
(212) 528-7581 (collect)
Morgan Stanley & Co. Incorporated
Preferred Stock Group
1221 Avenue of the Americas
New York, New York
Contact: Steven C. Sahara
1-800-422-6464 ext. 6905 (toll free)
EXHIBIT 99-2
THE WILLIAMS COMPANIES, INC.
Offer to Exchange
% Quarterly Income Capital Securities (QUICS(SM))
(Subordinated Deferrable Interest Debentures Due 2025)
for
$2.21 CUMULATIVE PREFERRED STOCK
- ------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL
RIGHTS WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME.
ON ________, 1995, UNLESS EXTENDED.
- ------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration are the Prospectus dated ________ __,
1995 (the "Prospectus") and the related Letter of Transmittal (which, together
with the Prospectus, constitute the "Exchange Offer") whereby The Williams
Companies, Inc. , a Delaware corporation (the "Company"), is offering to
exchange $______ aggregate principal amount of its % Quarterly Income
Capital Securities ("QUICS") (Subordinated Deferrable Interest Debentures Due
2025) for up to 3,630,100 shares of its $2.21 Cumulative Preferred Stock,
$1.00 par value, (the "Preferred Stock"), which constitute all outstanding
shares of the Preferred Stock, upon the terms and subject to the conditions
set forth in the Exchange Offer.
The QUICS are offered in minimum denominations of $25 and integral
multiples thereof, and the shares of the Preferred Stock have a liquidation
preference of $25 per share. Consequently, the Exchange Offer will be
effected on a basis of $25 principal amount of QUICS for each share of the
Preferred Stock validly tendered and accepted for exchange. See "The Exchange
Offer -- General" in the Prospectus.
WE ARE THE REGISTERED HOLDER OF SHARES OF THE PREFERRED STOCK HELD
BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES OF THE PREFERRED STOCK CAN BE
MADE ONLY BY US AS THE REGISTERED HOLDER AND PURSUANT TO YOUR INSTRUCTIONS.
THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND
CANNOT BE USED BY YOU TO TENDER SHARES OF THE PREFERRED STOCK HELD BY US FOR
YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or
all shares of the Preferred Stock held by us for your account, upon the terms
and subject to the conditions set forth in the Exchange Offer. If you wish us
to tender such shares, also complete the attached Notice of Solicited Tenders.
Your instructions to us should be forwarded as promptly as possible
in order to permit us to tender shares of the Preferred Stock in accordance
with the provisions of the Exchange Offer. THE EXCHANGE OFFER WILL EXPIRE AT
5:00 P.M., NEW YORK TIME, ON , 1995, UNLESS EXTENDED.
WE URGE YOU TO READ THE ENCLOSED PROSPECTUS CAREFULLY BEFORE
CONVEYING YOUR INSTRUCTIONS TO US.
If you wish to have us tender any or all of your shares of the
Preferred Stock, please so instruct us by completing, executing, detaching and
returning to us the instruction form set forth in the next page of this
letter. An envelope to return your instructions to us is enclosed. If you
authorize us to tender your shares of the Preferred Stock, all such shares of
the Preferred Stock will be tendered, unless otherwise specified on the next
page of this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN
SUFFICIENT TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE
EXPIRATION OF THE EXCHANGE OFFER.
Instructions with Respect to
THE WILLIAMS COMPANIES, INC.
OFFER TO EXCHANGE
% Quarterly Income Capital Securities (QUICS (SM))
(Subordinated Deferrable Interest Debentures Due 2025)
for
$2.21 CUMULATIVE PREFERRED STOCK
The undersigned acknowledge(s) receipt of your letter enclosing the
Prospectus dated , 1995 (the "Prospectus") and the related
Letter of Transmittal (which, together with the Prospectus, constitute the
"Exchange Offer") relating to the offer by The Williams Companies, Inc., a
Delaware corporation (the "Company"), to exchange up to $___ aggregate
principal amount of % Quarterly Income Capital Securities ("QUICS")
(Subordinated Deferrable Interest Debentures Due 2025) for any and all of its
$2.21 Cumulative Preferred Stock, $1.00 par value (the "Preferred Stock"), of
the Company, upon the terms and subject to the conditions set forth in the
Exchange Offer.
This will instruct you to tender the shares of the Preferred Stock
indicated below held by you for the account of the undersigned, pursuant to
the terms and subject to the conditions set forth in the Exchange Offer.
SIGN HERE
Shares of the Preferred Stock Signature(s):
which are to be Tendered:
______________________________________
(1)_____________ Number of Shares
(2)_____________ Number of Shares ______________________________________
Tendered (only if different Dated:________________, 1995
amount from item (1))*
Address:
______________________________________
Zip Code:
______________________________________
Area Code and Telephone No.
______________________________________
______________________________
* Unless otherwise indicated, it will be assumed that all shares of the
Preferred Stock listed in item (1) are to be tendered.
(SM) Lehman Brothers has applied for a service mark for QUICS.
- ------------------------------------------------------------------------------
NOTICE OF SOLICITED TENDERS
The Company will pay to any Soliciting Dealer, as defined in
the Prospectus, a solicitation fee of $.50 per Share for each share of the
Preferred Stock tendered and exchanged pursuant to the Offer. No fee shall be
paid to a Soliciting Dealer except for shares held by such Soliciting Dealer
as Nominee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such
fee to a tendering holder (other than itself). The Dealer Managers may not,
until the Expiration Time, buy, sell, deal or trade in the shares of the
Preferred Stock for their own account. No broker, dealer, bank, trust company
or fiduciary shall be deemed to be the agent of the Company, the Exchange
Agent, the Information Agent or the Dealer Managers for purposes of the
Exchange Offer.
The undersigned represents that the Soliciting Dealer which
solicited and obtained this tender is:
Name of Firm:________________________________________________________________
(Please Print)
Name of Individual Broker or Financial Consultant:___________________________
Identification Number (if known):____________________________________________
Address:_____________________________________________________________________
(Include Zip Code)
The following is to be completed ONLY if customer's Preferred
Stock held in nominee name are tendered.
BENEFICIAL OWNERS NUMBER OF SHARES OF
PREFERRED STOCK TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
Beneficial Owner No. 1...........................____________________________
Beneficial Owner No. 2...........................____________________________
Beneficial Owner No. 3...........................____________________________
The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that: (i) it has complied with the
applicable requirements of the Securities Exchange Act of 1934, as amended,
and the applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such solicitation
under the terms and conditions of the Prospectus; (iii) in soliciting tenders
of shares of Preferred Stock, it has used no soliciting materials other than
those furnished by the Company; and (iv) if it is a foreign broker or dealer
not eligible for membership in the National Association of Securities Dealers,
Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair
Practice in making solicitations.
SOLICITING DEALERS ARE NOT ENTITLED TO A FEE FOR SHARES OF PREFERRED STOCK
BENEFICIALLY OWNED BY SUCH SOLICITING DEALER.
- ------------------------------------------------------------------------------
Exhibit 99-3
[THE WILLIAMS COMPANIES, INC. LETTERHEAD]
_____ __, 1995
To Holders of the $2.21
Cumulative Preferred Stock:
The Williams Companies, Inc., a Delaware corporation, (the
"Company"), is proposing an exchange offer for up to ____ aggregate principal
amount of its ____% Quarterly Income Capital Securities (the "QUICS(SM)")
(Subordinated Deferrable Interest Debentures Due 2025) for any and all shares
of its $2.21 Cumulative Preferred Stock, $1.00 par value (the "Preferred
Stock"), validly tendered and not withdrawn pursuant to the Exchange Offer.
The Offer is explained in detail in the enclosed Prospectus and
Letter of Transmittal. If you want to tender your shares and to participate
in the Offer, the instructions for tendering are also set forth in detail in
the enclosed materials. I encourage you to read these materials carefully
before making any decision with respect to the Offer. Neither the Company nor
its Board of Directors makes any recommendation to any stockholder whether to
tender or to refrain from tendering in the Offer.
Very truly yours,
_________________________
Keith E. Bailey
Chairman, President and
Chief Executive Officer
___________________
(SM) Lehman Brothers has applied for a service mark for QUICS.
EXHIBIT 99-4
LETTER OF TRANSMITTAL
TO TENDER SHARES
OF THE $2.21 CUMULATIVE PREFERRED STOCK OF
THE WILLIAMS COMPANIES, INC.
PURSUANT TO THE PROSPECTUS DATED , 1995
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1995, UNLESS EXTENDED.
The Exchange Agent:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
__________
BY HAND/OVERNIGHT COURIER: BY MAIL:
Tenders and Exchanges Tenders and Exchanges
Suite 4680-WCI P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WCI
New York, NY 10005 Jersey City, NJ 07303
BY FACSIMILE:
(For Eligible Institutions Only)
(201) 222-4720
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
Shareholder Inquiries
Regarding Lost Securities:
(201) 324-0137
List below the shares of the Preferred Stock to which this Letter of
Transmittal relates. If the space below is inadequate, the certificate
numbers and/or the number of shares of the Preferred Stock tendered should be
listed on a separate signed schedule attached hereto.
DESCRIPTION OF SHARES OF PREFERRED STOCK TENDERED
<TABLE>
<CAPTION>
Name(s) and Address(es) of Registered Holder(s) Shares of Preferred Stock Tendered
(Please fill in, if blank) (Attach additional list if necessary)
Certificate Total Number Number of
Number(s)<F1> of Shares Shares
Represented Tendered<F2>
by
Certificate(s)*
<S> <C> <C> <C>
Total Shares
<FN>
<F1> Need not be completed by stockholders tendering by book-entry transfer.
<F2> Unless otherwise indicated, the holder will be deemed to have tendered the full number of shares
of Preferred Stock represented by the tendered certificates. See Instruction 4. Shares of the
Preferred Stock may be tendered and will be accepted for exchange only in denominations of $25
principal amount and integral multiples thereof. See Instruction 1.
</FN>
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING SHARES OF THE
PREFERRED STOCK SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE
INFORMATION AGENT. SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.
This Letter of Transmittal is to be used if certificates representing
shares of the Company's $2.21 Cumulative Preferred Stock, $1.00 par value,
(the "Preferred Stock"), are to be forwarded herewith or if delivery of shares
of the Preferred Stock is to be made by book-entry transfer to an account
maintained by the Exchange Agent at The Depository Trust Company ("DTC"),
pursuant to the procedures set forth in "The Exchange Offer -- Procedure for
Tendering Preferred Stock" in the Prospectus (as defined below). Although
delivery of shares of the Preferred Stock may be effected through book-entry
transfer into the Exchange Agent's account 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 (as defined below) 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 above 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.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
Ladies and Gentlemen:
The undersigned hereby tenders to The Williams Companies, Inc., a
Delaware corporation (the "Company"), the above-described number of shares of
the Preferred Stock, in accordance with the Company's offer to exchange up to
$___ aggregate principal amount of its __% Quarterly Income Capital Securities
(the "QUICS(SM)") (Subordinated Deferrable Interest Debentures Due 2025) for
any and all of its $2.21 Cumulative Preferred Stock, $1.00 par value, ("The
Preferred Stock") upon the terms and subject to the conditions set forth in
the Prospectus dated , 1995 (the "Prospectus") and in this
Letter of Transmittal (which, together with the Prospectus, constitute the
"Exchange Offer"), receipt of which is hereby acknowledged.
On the terms and subject to the conditions of the Exchange Offer,
subject to, and effective upon, acceptance for exchange of the shares of the
Preferred Stock tendered herewith in accordance with the terms of the Exchange
Offer, the undersigned hereby exchanges, assigns and transfers to, or upon the
order of, the Company all right, title and interest in and to all such shares
of the Preferred Stock as are being tendered hereby and that are accepted for
exchange pursuant to the Exchange Offer, and irrevocably constitutes and
appoints the Exchange Agent as its agent and attorney-in-fact to cause the
shares of the Preferred Stock to be assigned, transferred and exchanged to the
Company. The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent as the true and lawful agent and attorney-in-fact of the
undersigned (with full knowledge that the Exchange Agent also acts as the
agent of the Company) with respect to the shares of the Preferred Stock
tendered hereby and accepted for exchange pursuant to the Exchange Offer, with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) deliver the shares of the
Preferred Stock tendered hereby or transfer ownership of such shares on the
account books maintained by DTC together, in either case, with all
accompanying evidences of transfer and authenticity to the Exchange Agent
for the account of the Company, (b) tender Preferred Stock in the Exchange
Offer and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such shares of Preferred Stock, all in accordance with
the terms and subject to the conditions of the Exchange Offer.
The name(s) and address(es) of the registered holder(s) should be
printed above under "Description of Shares of the Preferred Stock Tendered",
if not already printed thereunder, exactly as they appear on the shares of the
Preferred Stock tendered hereby. The certificate number(s) and the number of
shares of the Preferred Stock to which this Letter of Transmittal relates,
together with the number of shares of the Preferred Stock that the undersigned
wishes to tender, should be indicated in the appropriate boxes above under
"Description of Shares of the Preferred Stock Tendered".
The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, exchange, assign and transfer the
shares of the Preferred Stock tendered hereby and to acquire the QUICS
issuable upon 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 by the Company, the Company will acquire good and
marketable title thereto, free and clear of all liens, restrictions, charges
and encumbrances and that such shares of the Preferred Stock are not subject
to any adverse claim. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Exchange Agent or the Company to be
necessary or desirable to complete the exchange, assignment and transfer of
the shares of the Preferred Stock.
____________
(SM) Lehman Brothers has applied for a service mark for QUICS.
All authority conferred, or agreed to be conferred, in this Letter of
Transmittal shall survive the death, bankruptcy or incapacity of the
undersigned, and any obligation of the undersigned hereunder shall be binding
upon the heirs, executors, administrators, legal representatives, successors
and assigns of the undersigned. Except as stated in the Exchange Offer, this
tender is irrevocable.
The undersigned understands that the tender of the shares of the
Preferred Stock and acceptance for exchange of such shares of the Preferred
Stock pursuant to one of the procedures described in the Prospectus under "The
Exchange Offer -- Procedure for Tendering the Preferred Stock" and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company, upon the terms and subject to the conditions of the Exchange
Offer, including the tendering holder's representation and warranty that (a)
such holder owns the shares of the Preferred Stock being tendered within the
meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934,
as amended, and (b) the tender of such shares of the Preferred Stock complies
with Rule 14e-4, only when either (i) a duly executed and properly completed
copy of this Letter of Transmittal accompanied by certificates or, in the case
of a book-entry transfer, an Agent's Message is received by the Exchange
Agent, or (ii)(A) a tender is made by or through an Eligible Institution (as
defined in the Prospectus); (B) a properly completed and duly executed Notice
of Guaranteed Delivery, substantially in the form provided by the Company
herewith, is received prior to the Expiration Date by the Exchange Agent; and
(C) the certificates for all tendered shares of the Preferred Stock, in proper
form for transfer, together with a properly completed and duly executed Letter
of Transmittal, are received by the Exchange Agent within five New York Stock
Exchange trading days of the date of such Notice of Guaranteed Delivery, all as
provided under "the Exchange Offer -- Procedure for Tendering the Preferred
Stock" in the Prospectus.
Unless otherwise indicated herein under "Special Issuance
Instructions" below, please cause QUICS (and, if applicable, the certificate
for any shares of the Preferred Stock not exchanged) to be issued in the name
of the undersigned (and, in the case of shares of the Preferred Stock tendered
by book-entry transfer, by credit to the account at DTC). Similarly, unless
otherwise indicated under "Special Delivery Instructions" below, please send
QUICS (and, if applicable, shares of the Preferred Stock not exchanged) to the
undersigned at the address shown below the signature of the undersigned. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" to transfer any certificates for the Preferred
Shares from the name of the registered holder thereof if the Company exchanges
none of the shares of the Preferred Stock represented by such certificates.
For tenders of shares of the Preferred Stock to be deemed to have
been made as of the time of delivery of the Notice of Guaranteed Delivery, the
number of shares of Preferred Stock specified as tendered in this Letter of
Transmittal must be identical to that number specified in the Notice of
Guaranteed Delivery. If no number is specified in this Letter of Transmittal
or facsimile thereof, specifications herein shall be deemed to be identical to
specifications in the Notice of Guaranteed Delivery. If specifications in the
Notice of Guaranteed Delivery and Letter of Transmittal are not identical,
tenders shall be deemed to have been made as of the date of delivery of the
Letter of Transmittal (and any other required documents) and specifications in
the Letter of Transmittal shall control.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED SHARES OF THE PREFERRED STOCK ARE BEING DELIVERED
BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution_______________________________________
Account Number______________________________________________________
Transaction Code Number_____________________________________________
[ ] CHECK HERE IF TENDERED SHARES OF THE PREFERRED STOCK ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT PRIOR TO THE DATE HEREOF AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)_____________________________________
Window Ticket Number (if any)_______________________________________
Date of Execution of Notice of Guaranteed Delivery__________________
Name of Eligible Institution that Guaranteed Delivery_______________
Complete the Following If Delivered by Book-Entry Transfer:
Account Number________________________________________________
Transaction Code Number_______________________________________
SPECIAL ISSUANCE
INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 and 9)
To be completed ONLY if the QUICS to be issued in exchange for shares
of the Preferred Stock accepted for exchange, or certificates representing
shares of the Preferred Stock not tendered or not accepted for exchange, are
to be issued or reissued, in the name of someone other than the undersigned.
Issue to:
Name_________________________________________________________________________
(PLEASE TYPE OR PRINT)
_____________________________________________________________________________
Address or Account Number____________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(ZIP CODE)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 9)
To be completed ONLY if the QUICS to be issued in exchange for shares
of the Preferred Stock accepted for exchange, or certificates representing
shares of the Preferred Stock not tendered or not accepted for exchange, are
to be sent to someone other than the undersigned at an address other than that
appearing above under "Description of Shares of the Preferred Stock Tendered."
Issue to:
Name_________________________________________________________________________
(PLEASE TYPE OR PRINT)
_____________________________________________________________________________
Address or Account Number____________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(ZIP CODE)
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.
Unless the context requires otherwise, the term "Holder" for purposes
of this Letter of Transmittal means any person in whose name shares of the
Preferred Stock are registered on the books of the First Chicago Trust Company
of New York, or any other person who has obtained a properly completed stock
power from the registered holder or any person whose shares of the Preferred
Stock are held of record by DTC who desires to deliver such shares of the
Preferred Stock by book-entry transfer at DTC. Holders who tender shares of
the Preferred Stock by book-entry transfer are referred to herein as "Book
Entry Holders" and other holders are referred to herein as "Certificate
Holders." Holders of shares of the Preferred Stock whose certificates are not
immediately available or who cannot deliver their certificates and all other
documents required hereby to the Exchange Agent prior to the Expiration Time
(as defined in the Prospectus) or comply with book-entry transfer procedures
on a timely basis must tender their shares of the Preferred Stock according to
the guaranteed delivery procedures set forth in "The Exchange Offer --
Guaranteed Delivery Procedures" in the Prospectus. See Instruction 1.
SIGN HERE
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
certificate(s) of share(s) of the Preferred Stock or on a security position
listing or by person(s) authorized to become registered holder(s) by
certificates and documents transmitted herewith. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity,
please set forth the following information and see Instruction 6.)
Please also complete Substitute Form W-9 below.
Failure to do so will result in backup withholding.
See "Important Tax Information - Substitute Form W-9" below.
(SIGNATURE(S) OF HOLDER(S))
Dated: _______________________________________, 1995
Name(s)______________________________________________________________________
_____________________________________________________________________________
(PLEASE PRINT)
Capacity_____________________________________________________________________
Address______________________________________________________________________
_____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.__________________________________________________
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED. SEE INSTRUCTIONS 2 AND 6)
Authorized Signature_________________________________________________________
Name_________________________________________________________________________
(PLEASE PRINT)
Name of Firm_________________________________________________________________
Address______________________________________________________________________
_____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.__________________________________________________
Dated: _______________________________________, 1995
NOTICE OF SOLICITED TENDERS
The Company will pay to any Soliciting Dealer, as defined in the
Prospectus, a solicitation fee of $.50 per Share for each share of the
Preferred Stock tendered and exchanged pursuant to the Offer. No fee shall be
paid to a Soliciting Dealer except for shares held by such Soliciting Dealer
as Nominee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such
fee to a tendering holder (other than itself). The Dealer Managers may not,
until the Expiration Time, buy, sell, deal or trade in the shares of the
Preferred Stock for their own account. No broker, dealer, bank, trust company
or fiduciary shall be deemed to be the agent of the Company, the Exchange
Agent, the Information Agent or the Dealer Managers for purposes of the
Exchange Offer.
The undersigned represents that the Soliciting Dealer which solicited
and obtained this tender is:
Name of Firm:________________________________________________________________
(Please Print)
Name of Individual Broker or Financial Consultant:___________________________
Identification Number (if known):____________________________________________
Address:_____________________________________________________________________
(Include Zip Code)
The following is to be completed ONLY if customer's Preferred Stock
held in nominee name are tendered.
BENEFICIAL OWNERS NUMBER OF SHARES OF PREFERRED STOCK
TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
Beneficial Owner No. 1...................____________________________________
Beneficial Owner No. 2...................____________________________________
Beneficial Owner No. 3...................____________________________________
The acceptance of compensation by such Soliciting Dealer will
constitute a representation by it that: (i) it has complied with the
applicable requirements of the Securities Exchange Act of 1934, as amended,
and the applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such solicitation
under the terms and conditions of the Prospectus; (iii) in soliciting tenders
of shares of Preferred Stock, it has used no soliciting materials other than
those furnished by the Company; and (iv) if it is a foreign broker or dealer
not eligible for membership in the National Association of Securities Dealers,
Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair
Practice in making solicitations.
SOLICITING DEALERS ARE NOT ENTITLED TO A FEE FOR SHARES OF PREFERRED STOCK
BENEFICIALLY OWNED BY SUCH SOLICITING DEALER.
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Delivery of This Letter of Transmittal and Certificate. This
Letter of Transmittal is to be used if certificates representing shares of
the Preferred Stock are to be forwarded herewith or if tenders are to be
made pursuant to the procedures for delivery by book-entry transfer, other
than by Agent's Message, set forth in the Prospectus under "The Exchange
Offer -- Procedure for Tendering Preferred Stock". Shares of the Preferred
Stock may be tendered and will be accepted for exchange only in
denominations of $25 principal amount and integral multiples thereof.
Certificates for all physically delivered shares of the Preferred Stock or
confirmation of any book-entry transfer to the Exchange Agent's account at
DTC of shares of the Preferred Stock tendered by book-entry transfer, as
well as this Letter of Transmittal or facsimile thereof, properly completed
and duly executed, and any required signature guarantee, or an Agent's
Message in connection with a book-entry transfer, and any other documents
required by this Letter of Transmittal, must be received by the Exchange
Agent at one of its addresses set forth herein prior to the Expiration
Time. Holders of shares of the Preferred Stock whose certificates are not
immediately available or who cannot deliver their certificates and all
other required documents to the Exchange Agent before the Expiration Time
or comply with book-entry transfer procedures on a timely basis may tender
their shares of the Preferred Stock by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedures set forth in the Prospectus under "The Exchange Offer
- -- Guaranteed Delivery Procedures". Pursuant to such procedures: (i) such
tender must be made by or through an Eligible Institution (as defined in
the Prospectus); (ii) prior to the Expiration Time, the Exchange Agent
must receive 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 (5) New York Stock Exchange
trading days after the Expiration Time, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, and 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 (iii) all tendered shares of the Preferred Stock (or a
confirmation of any book-entry transfer of such shares of the Preferred
Stock 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 this Letter of Transmittal, must be received by the
Exchange Agent within five (5) New York Stock Exchange trading days after
the Expiration Time, all as provided in the Prospectus under "The Exchange
Offer -- Guaranteed Delivery Procedures".
THE METHOD OF DELIVERY OF SHARES OF THE PREFERRED STOCK AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER TENDERING SHARES OF THE PREFERRED STOCK AND, EXCEPT AS OTHERWISE
PROVIDED BELOW, 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 DATE TO PERMIT
DELIVERY TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION TIME.
No alternative, conditional or contingent tenders will be accepted.
All tendering holders, by execution of this Letter of Transmittal, or
facsimile thereof, waive any right to receive any notice of the acceptance of
their shares of the Preferred Stock for exchange.
2. Guarantee of Signatures. Except as otherwise provided below,
signatures on this Letter of Transmittal must be guaranteed by a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office in the United States that is a participant in the
Security Transfer Medallion Program or the Stock Exchange Medallion Program
(each of the foregoing being referred to as an "Eligible Institution"), unless
the shares of the Preferred Stock tendered hereby are tendered (i) by a
registered holder (which term, for purposes of this Letter of Transmittal,
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" herein or (ii) for the account of an Eligible
Institution. See Instruction 6. If the shares of the Preferred Stock are
registered in the name of a person other than the signer of this Letter of
Transmittal, or if certificates for QUICS and/or for 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 written instrument or instruments
of transfer or exchange in a form satisfactory to the Company duly executed by
the registered holder with such signatures guaranteed by an Eligible
Institution. See Instruction 6.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers of the shares of the Preferred Stock should be listed on a
separate signed schedule attached hereto.
4. Partial Tenders. Issuance of QUICS in exchange for shares of the
Preferred Stock will be made only against deposit of tendered shares of the
Preferred Stock. If less than the entire number of shares of the Preferred
Stock evidenced by a submitted certificate is tendered, the tendering holder
of shares of the Preferred Stock should fill in the number of shares tendered
in the appropriate boxes above entitled "Number of Shares Tendered." The
Exchange Agent will then issue and send to the tendering holder (unless
otherwise requested by the holder under "Special Issuance Instructions" and
"Special Delivery Instructions" in this Letter of Transmittal), a newly issued
certificate for shares of the Preferred Stock submitted but not tendered,
together with any tendered shares of the Preferred Stock that were not
accepted for exchange. The entire number of all shares of the Preferred Stock
deposited with the Exchange Agent will be deemed to have been tendered unless
otherwise indicated.
Tendered shares of the Preferred Stock not accepted for exchange by
the Company will be returned without expense to the tendering holder of such
shares of the Preferred Stock (or, in the case of the shares of the Preferred
Stock tendered by book-entry transfer into the Exchange Agent's account at
DTC, such shares of the Preferred Stock will be credited to an account
maintained at DTC) as promptly as practicable following the Expiration Time.
5. 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 the 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 one of its addresses set forth in the Letter of
Transmittal. The method of notification is at the risk and election of the
holder. Any such notice of withdrawal must specify (i) the holder named in
the Letter of Transmittal as having tendered shares of the Preferred Stock
to be withdrawn, (ii) if the shares of the Preferred Stock are held in
certificated form, the certificate numbers of such shares 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
accompanied by evidence satisfactory to the Company that the person
withdrawing the tender has succeeded to the beneficial ownership of the
shares of the Preferred Stock being withdrawn. The Exchange Agent will
return the properly withdrawn shares of the Preferred Stock promptly
following receipt of notice of withdrawal. If shares of the Preferred
Stock have been tendered pursuant to the procedure for book-entry transfer,
any notice of withdrawal must specify the name and number of the account at
DTC to be credited with the withdrawn shares of the Preferred Stock and
otherwise comply with DTC's procedures. All questions as to the validity
of a notice of withdrawal, including the time of receipt, will be
determined by the Company, and such determination will be final and binding
on all parties. Withdrawal of tenders of shares of the Preferred Stock may
not be rescinded and any shares of the Preferred Stock withdrawn will not
thereafter be deemed to be validly tendered for the purposes of the
Exchange Offer. Properly withdrawn shares of the Preferred Stock, however,
may be retendered by following the procedures therefor described elsewhere
herein at any time prior to the Expiration Time. See "The Exchange Offer
- -- Procedure for Tendering Preferred Stock" in the Prospectus.
6. Signatures on Letters of Transmittal, Written Instruments and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the shares of the Preferred Stock tendered hereby, the signatures
must correspond with the name(s) as written on the face of the certificates
without alteration, enlargement or any change whatsoever.
If any of the shares of the Preferred Stock tendered hereby are owned
of record by two or more joint owners, all such owners must sign this Letter
of Transmittal.
If any of the tendered shares of the Preferred Stock are registered
in different names on several certificates, it will be necessary to complete,
sign, and submit as many separate Letters of Transmittal as there are
different registrations of certificates.
If this Letter of Transmittal or any certificates or written
instrument or instruments of transfer or exchange are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to
the Company of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s)
of the shares of the Preferred Stock listed and transmitted hereby, no
endorsements of certificates or separate written instruments of transfer or
exchange are required unless the QUICS due in respect of the shares of the
Preferred Stock accepted for exchange are to be issued to, or certificates
representing shares of the Preferred Stock not tendered or not exchanged and
paid for are to be issued in the name of, a person other than the registered
holder(s). Signatures on such certificates or written instruments of transfer
or exchange must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder of the certificate(s) listed, the certificate(s) must be
endorsed by the registered holder, or be accompanied by a written instrument
or instruments of transfer or exchange in form satisfactory to the Company
duly executed by the registered holder. Signatures on such certificates or
written instrument or instruments of transfer or exchange must be guaranteed
by an Eligible Institution.
7. Transfer Taxes. The Company will pay any transfer taxes with
respect to the transfer and exchange of shares of the Preferred Stock to it or
its order pursuant to the Exchange Offer. If, however, the QUICS 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 are to be
registered in the name of, any person other than the person(s) signing this
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 QUICS 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.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE NECESSARY
FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES REPRESENTING SHARES
OF THE PREFERRED STOCK LISTED IN THIS LETTER OF TRANSMITTAL.
8. Withholding on Gross Proceeds Paid Pursuant to the Exchange
Offer. No withholding of United States federal income tax will be required
with respect to a foreign holder upon the exchange of the shares of the
Preferred Stock for QUICS pursuant to the Exchange Offer provided such holder
certifies to the Company on the attached Certificate for No United States
Federal Income Tax Withholding on Exchange that such holder owns (actually or
constructively) solely shares of the Preferred Stock or not more than one
percent of the shares of the Preferred Stock and not more than one percent of
any other class of the Company's stock. If a foreign holder does not provide
this Certification to the Exchange Agent, the Company will withhold federal
income tax at a rate of 30% of the fair market value of the QUICS issued to
such holder pursuant to the Exchange Offer (or if the QUICS are not traded on
an established market, 30% of the fair market value of the shares of the
Preferred Stock exchanged for QUICS pursuant to the Exchange Offer) unless
such holder is entitled to a reduced withholding tax rate under the provisions
of an income tax treaty, in which case the tax will be withheld at the reduced
rate.
No backup withholding at 31% will be required upon the exchange of
the shares of the Preferred Stock for QUICS pursuant to the Exchange Offer
provided that the holder submits a completed Substitute Form W-9 or, in the
case of certain foreign holders, a completed Form W-8, to the Exchange Agent.
For further information with respect to United States federal
withholding taxes, see "Important Tax Information."
9. Special Issuance Instructions and Special Delivery Instructions.
If certificates for QUICS and/or unexchanged shares of the Preferred Stock are
to be issued, reissued or returned to a person other than the signer of this
Letter of Transmittal or if such certificates are to be sent or returned to
someone other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed.
10. Solicited Tenders. The Company will pay a solicitation fee of
$.50 per share for any shares of the Preferred Stock tendered and accepted for
exchange pursuant to the Exchange Offer, covered by the Letter of Transmittal
which designates, in the box captioned "Notice of Solicited Tenders", as
having solicited and obtained the tender, the name of (i) any broker or dealer
in securities, including the Dealer Managers in their capacity as a dealer or
broker, which is a member of any national securities exchange or of the
National Association of Securities Dealers, Inc. (the "NASD"), (ii) any
foreign broker or dealer not eligible for membership in the NASD which agrees
to conform to the NASD's Rules of Fair Practice in soliciting tenders outside
the United States to the same extent as though it were an NASD member, or
(iii) any bank or trust company (each of which is referred to herein as a
"Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer
with respect to the tender of shares of the Preferred Stock by a holder unless
the Letter of Transmittal accompanying such tender designates such Soliciting
Dealer. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such
fee to a tendering holder (other than itself). The Dealer Managers may not,
until the Expiration Time, buy, sell, deal or trade in the shares of the
Preferred Stock for their own account. No broker, dealer, bank, trust company
or fiduciary shall be deemed to be the agent of the Company, the Exchange
Agent, the Information Agent or the Dealer Managers for purposes of the
Exchange Offer.
11. Waiver of Conditions. Subject to the terms of the Exchange
Offer, the conditions of the Exchange Offer may be waived by the Company, in
whole or in part, at any time and from time to time, in the Company's sole
discretion, in the case of any shares of the Preferred Stock tendered.
12. Requests for Assistance or Additional Copies. Requests for
assistance may be directed to, or additional copies of the Prospectus, this
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained
from, the Information Agent at its address set forth below.
13. Lost, Destroyed or Stolen Certificates. If any certificates
have been lost, mutilated, destroyed or stolen, the holder should promptly
notify First Chicago Trust Company of New York at (201) 324-0137. The
holder will then be instructed as to the steps that must be taken in order
to replace the certificate(s). This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing
certificate(s) have been followed.
14. Definitions. Capitalized terms used in this Letter of
Transmittal and not otherwise defined have the meanings given in the
Prospectus.
15. Irregularities. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of Letters of
Transmittal or shares of the Preferred Stock will be resolved by the Company,
and such determination will be final and binding on all parties. The Company
reserves the absolute right to reject any or all Letters of Transmittal or
tenders that are not in proper form or the acceptance of which would, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
right to waive any irregularities or conditions of tender as to the particular
shares of the Preferred Stock covered by any Letter of Transmittal or tendered
pursuant to such letter. None of the Company, the Exchange Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. The Company's interpretation of the terms and conditions of the
Exchange Offer shall be final and binding on all parties.
IMPORTANT: IN ORDER VALIDLY TO TENDER SHARES OF THE PREFERRED STOCK,
THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH CERTIFICATES
REPRESENTING SHARES OF THE PREFERRED STOCK OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ANY REQUIRED SIGNATURE GUARANTEES AND ANY OTHER REQUIRED
DOCUMENTS) OR AN AGENT'S MESSAGE MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR
TO THE EXPIRATION TIME OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED
BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION TIME.
IMPORTANT TAX INFORMATION
SUBSTITUTE FORM W-9
Under the federal income tax law, each tendering holder of shares of
the Preferred Stock is required to provide the Exchange Agent (as payer) with
such holder's correct taxpayer identification number on Substitute Form W-9
below. If such holder is an individual, the taxpayer identification number is
his/her social security number. If the Exchange Agent is not provided with
the correct taxpayer identification number, the holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that
are made to such holder with respect to QUICS acquired pursuant to the
Exchange Offer may be subject to federal income tax backup withholding.
Certain holders (including, among others, corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. A corporation must, however, complete the Substitute Form W-9,
providing its taxpayer identification number and indicating that it is exempt
from backup withholding to establish its exemption from backup withholding.
In order for a foreign individual to qualify as an exempt recipient, that
holder must submit a Form W-8 (available from the Information Agent), signed
under penalties of perjury, attesting to that individual's exempt status. See
the enclosed Guidelines for Certification of Taxpayer Identification Number
for additional instructions.
If backup withholding applies, the Exchange Agent is required to
withhold 31% of any consideration payable to the holder. Backup withholding
is not an additional tax. Rather, the amount of tax withheld will be a credit
against the tax liability of persons subject to backup withholding. If
withholding results in an overpayment of taxes, a refund may be obtained.
What Number to give the Exchange Agent. The holder of shares of the
Preferred Stock is required to give the Exchange Agent the social security
number or employer identification number of the record owner of the shares of
the Preferred Stock. If the shares of the Preferred Stock are in more than
one name or are not in the name of the actual owner, consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional guidance on which number to report.
CERTIFICATION FOR NO UNITED STATES FEDERAL INCOME TAX WITHHOLDING ON EXCHANGE
No withholding of United States federal income tax will be required
with respect to a foreign holder upon the exchange of Preferred Stock for
QUICS pursuant to the Exchange Offer provided such holder certifies to the
Company on the attached Certificate for No United States Federal Income Tax
Withholding on Exchange that such holder owns (actually or constructively)
solely shares of the Preferred Stock, or not more than one percent of the
shares of the Preferred Stock and not more than one percent of any other
class of the Company's stock. In determining whether it can make this
certification, a foreign holder must take into account not only the
Preferred Stock and other stock of the Company that such holder actually
owns, but also Preferred Stock and other stock of the Company that such
holder constructively owns under applicable U.S. federal income tax rules.
Under these rules, a foreign holder may constructively own Preferred Stock
and other stock of the Company actually owned, and in some cases
constructively owned, by certain related individuals or entities, and
Preferred Stock and other stock of the Company that the holder has the
right to acquire by exercise of an option. Foreign holders should consult
their own U.S. tax advisors about the application of the constructive
ownership rules to their particular situations.
If a foreign holder does not provide this Certificate to the Exchange
Agent, the Company will withhold federal income tax at a rate of 30% of the
fair market value of the QUICS issued to such holder pursuant to the Exchange
Offer (or if the QUICS are not traded on an established market, 30% of the
fair market value of the shares of the Preferred Stock exchanged for QUICS
pursuant to the Exchange Offer) unless such holder is entitled to a reduced
withholding tax rate with respect to dividend income under the provisions of
an income tax treaty, in which case the tax will be withheld at the reduced
rate.
FORM W-8
No withholding of United States federal income tax will be required
with respect to the payment by the Company or any paying agent of principal or
interest (including original issue discount) on QUICS beneficially owned by a
foreign holder, provided that (i) the beneficial owner does not own (actually
or constructively) 10% or more of the total combined voting power of all
classes of the Company's stock entitled to vote, (ii) the beneficial owner is
not a controlled foreign corporation that is related to the Company through
stock ownership, (iii) the beneficial owner is not a bank whose receipt of
interest on the QUICS is described in section 881(c)(3)(A) of the Code and
(iv) either (y) the beneficial owner certifies to the Company or its agent on
Form W-8, under the penalties of perjury, that it is not a U.S. person,
citizen or resident and provides its name and address or (z) a financial
institution holding the QUICS on behalf of the beneficial owner certifies,
under penalties of perjury, that Form W-8 has been received by it and
furnishes the Company or its agent with a copy thereof. Contact the
Information Agent at (800) 566-9058 (toll free) if you need a copy of Form W-8.
PAYER'S NAME: _____________
Name(s) as shown above on certificate(s) for shares of Preferred Stock (if
joint ownership, list first and circle the name of the person or entity
whose number you enter in Part I below). Address (if holder does not
complete, signature in Part III below will constitute a certification that
the address on the reverse hereof is correct). City, State, and Zip Code
SUBSTITUTE Social Security
Form W-9 Number
Department of the OR
Treasury Internal Part I -- PLEASE
Revenue Service PROVIDE YOUR TIN IN Employer
Payer's Request For THE BOX AT RIGHT AND Identification
Taxpayer CERTIFY BY SIGNING Number
Identification AND DATING BELOW TIN Applied For [ ]
Number (TIN)
And Certification
Part II --
For Payees exempt from backup withholding,
write "Exempt" here.
_________________
Part III -- Certification. Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding, (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as
a result of a failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions. You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of under reporting interest or dividends on your tax
return. However, if you have been notified by the IRS that you are no
longer subject to backup withholding, do not cross out item (2).
SIGNATURE______________________________________ DATE ______________________
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART I OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (a) I have mailed or
delivered an application to receive a Taxpayer Identification Number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a Taxpayer
Identification Number within 60 days, thirty-one (31) percent of all
reportable payments made to me will be withheld until I provide a properly-
certified Taxpayer Identification Number to the Exchange Agent.
________________________________________________ __________________________
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
CERTIFICATE FOR NO UNITED STATES FEDERAL INCOME TAX WITHHOLDING ON EXCHANGE
HOLDERS OF SHARES OF THE PREFERRED STOCK WITH A MAILING ADDRESS OUTSIDE OF THE
UNITED STATES MUST CERTIFY TO ONE OF THE FOLLOWING STATEMENTS TO AVOID THE
WITHHOLDING OF UNITED STATES FEDERAL INCOME TAX AT A RATE OF 30% (OR LOWER
TREATY RATE IF APPLICABLE) OF THE GROSS PROCEEDS PAYABLE TO SUCH HOLDERS
PURSUANT TO THE EXCHANGE OFFER:
A. I certify under penalties of perjury that I own (actually or constructively
under the rules of Section 318 of the Internal Revenue Code of 1986, as
amended*) either (a) solely shares of the Preferred Stock or (b) not more
than one percent of the shares of the Preferred Stock and not more than one
percent of any other class of the Company's stock. I understand that if I
certify to either (a) or (b) of the preceding sentence, the Company will
not withhold United States federal income tax with respect to the gross
proceeds payable to me pursuant to the Exchange Offer.
* For purposes of making this certification, a holder must take into account
not only the Preferred Stock and other stock of the Company that such
holder actually owns, but also Preferred Stock and other stock of the
Company that such holder constructively owns under Section 318 of the
Internal Revenue Code of 1986, as amended. Non-United States Holders
should consult their own United States tax advisors about the application
of the constructive ownership rules of Section 318 to their particular
situations.
SIGNATURE:________________________________________ DATE:_____________________
B. Under penalties of perjury, I certify that I am a United States Holder.**
** A "United States Holder" means a beneficial owner of Preferred Stock that
is (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of
the United States or any political subdivision thereof, or (iii) an estate
or trust the income of which is subject to United States federal income
taxation regardless of its source.
SIGNATURE:________________________________________ DATE:_____________________
The Exchange Agent is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY HAND/OVERNIGHT COURIER BY MAIL
Tenders & Exchanges Tenders & Exchanges
Suite 4680-WCI P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WCI
New York, NY 10005 Jersey City, NJ 07303
The Information Agent is:
MORROW & CO., INC.
909 Third Avenue 14755 Preston Road, Suite 725
New York, New York 10022 Dallas, Texas 75240
Banks and Brokers call toll-free:
1-800-662-5200
All others call toll-free:
1-800-566-9058
The Dealer Managers for the Exchange Offer are:
Lehman Brothers
Liability Management Group
Three World Financial Center
200 Vesey Street
New York, NY 10285
Contact: David B. Parsons
1-800-438-3242 (toll free)
(212) 528-7581 (collect)
Morgan Stanley & Co. Incorporated
Preferred Stock Group
1221 Avenue of the Americas
New York, New York
Contact: Steven C. Sahara
1-800-422-6464 ext. 6905 (toll free)
EXHIBIT 99-5
NOTICE OF GUARANTEED DELIVERY
in Respect of the
$2.21 Cumulative Preferred Stock
of
THE WILLIAMS COMPANIES, INC.
As set forth in the Exchange Offer (as defined below), this form or one
substantially equivalent hereto must be used to accept the Exchange Offer if
certificates representing shares of the $2.21 Cumulative Preferred Stock, par
value $1.00, (the "Preferred Stock") of The Williams Companies, Inc., a
Delaware corporation (the "Company"), are not immediately available or time
will not permit a holder's shares of the Preferred Stock, the Letter of
Transmittal or other required documents to reach First Chicago Trust Company
of New York as Exchange Agent (the "Exchange Agent"), prior to the Expiration
Time (as defined in the Prospectus (as defined below)), or the procedure for
book-entry transfer cannot be completed on a timely basis. Such form may be
delivered by facsimile transmission, mail or hand delivery to the Exchange
Agent. See "The Exchange Offer -- Guaranteed Delivery Procedures" in the
Prospectus.
The Exchange Agent for the Exchange Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Facsimile: By Hand/Overnight Delivery:
(For Eligible Institutions Only)
Tenders & Exchanges (201) 222-4720 Tenders & Exchanges
P.O. Box 2559 (201) 222-4721 Suite 4680-WCI
Mail Suite 4660-WCI 14 Wall Street, 8th Floor
Jersey City, NJ 07303 New York, NY 10005
Confirm by Telephone:
(201) 222-4707
Shareholder Inquiries
Regarding Lost Securities:
(201) 324-0137
________________
DELIVERY OF THIS NOTICE TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF THIS NOTICE VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY OR CONSENT.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, in accordance with the
Company's offer to exchange up to $___________ aggregate principal amount of
its % Quarterly Income Capital Securities ("QUICS"(SM)) (Subordinated
Deferrable Interest Debentures Due 2025) for any and all shares of its
Preferred Stock, upon the terms and subject to the conditions set forth in the
Prospectus dated , 1995 (the "Prospectus"), and in the related
Letter of Transmittal (which, together with the Prospectus, constitute the
"Exchange Offer"), receipt of which is hereby acknowledged, the shares of the
Preferred Stock set forth below pursuant to the guaranteed delivery procedures
set forth in "The Exchange Offer -- Guaranteed Delivery Procedures" in the
Prospectus.
Number of Shares Tendered __________
SIGN AND DATE HERE
Pursuant to the Prospectus and the Exchange Offer, the undersigned
hereby tenders to the Company the shares of Preferred Stock set forth above.
Dated:__________________, 1995 Name(s)
___________________________________ ______________________________________
___________________________________ ______________________________________
(SIGNATURE(S) OF HOLDER(S)) (PLEASE TYPE OR PRINT)
Address_______________________________
______________________________________
(ZIP CODE)
Area Code and Tel. No.________________
Complete the following if Delivered
by Book-Entry Transfer:
The Depository Trust Company
Account Number_____________________
THE GUARANTEE ON THE FOLLOWING PAGE MUST BE COMPLETED WITH
RESPECT TO THE TENDER OF SHARES
________________
(SM) Lehman Brothers has applied for a service mark for QUICS.
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc., or
a commercial bank or trust company having an office in the United States,
guarantees (a) that the above named person(s) "own(s)" the shares of the
Preferred Stock tendered hereby within the meaning of Rule 14e-4 under the
Securities Exchange Act of 1934, as amended, (b) that such tender of such
shares of the Preferred Stock complies with Rule 14e-4, and (c) to deliver to
the Exchange Agent the shares of the Preferred Stock tendered hereby or
confirmation of book-entry transfer of such shares into the Exchange Agent's
account at The Depository Trust Company, in proper form for transfer, together
with the Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message
(as defined in the Prospectus) in connection with a book-entry transfer of the
Shares of the Preferred Stock, and any other required documents, within five
(5) New York Stock Exchange trading days after the Expiration Time.
Name of Firm_______________________ ______________________________________
(AUTHORIZED SIGNATURE)
Address____________________________ Title_________________________________
___________________________________ Name__________________________________
(ZIP CODE) PLEASE TYPE OR PRINT
Area Code and Tel. No._____________ Dated____________________________, 1995
NOTE: DO NOT SEND CERTIFICATES REPRESENTING SHARES OF PREFERRED STOCK WITH
THIS FORM. SUCH CERTIFICATES SHOULD BE SENT ONLY WITH A LETTER OF
TRANSMITTAL.
EXHIBIT 99-6
THE WILLIAMS COMPANIES, INC.
EXCHANGE OFFER
QUESTIONS AND ANSWERS
Q. WHY IS WILLIAMS OFFERING TO EXCHANGE ITS % QUARTERLY INCOME CAPITAL
SECURITIES (QUICS) FOR ITS $2.21 CUMULATIVE PREFERRED STOCK, $1.00
PAR VALUE (THE "PREFERRED STOCK") (WHICH CONSTITUTE ALL OUTSTANDING
SHARES OF THE PREFERRED STOCK)?
A. The principal purpose of the Exchange Offer is to improve the
Company's after-tax cash flow by replacing shares of the Preferred
Stock with the QUICS. The potential cash flow benefit to the Company
arises because interest payable on the QUICS will be deductible by
the Company for federal income tax purposes, while the dividends
payable on the shares of the Preferred Stock are not deductible.
The Company believes the Exchange Offer is fair to holders of shares
of the Preferred Stock, although the Company has not received any
report, opinion or appraisal relating to the fairness of Exchange.
The Exchange Offer will result in the holders obtaining a security
that is senior to the Preferred Stock, that provides for a higher
interest rate than the equivalent dividend on the Preferred Stock and
that provides for a definite maturity date. THE COMPANY, ITS BOARD
OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO RECOMMENDATION AS TO
WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE
OFFER. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE
THEIR SHARES OF THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO
EXCHANGE.
Q. WHAT DO THE TERMS "BENEFICIAL OWNER," "REGISTERED HOLDER," "NOMINEE"
AND "CUSTODIAN" MEAN?
A. Beneficial Owner. The beneficial owner is one whose shares of the
Preferred Stock are held by a broker, dealer, bank, trust company or
other institution and registered in the name of such institution. A
beneficial owner who wishes to tender such shares should contact such
registered holder promptly and instruct it whether or not to tender
such shares on behalf of such beneficial owner.
Registered Holder. The registered holder of shares of the Preferred
Stock is the person or institution in whose name such shares are
actually registered on the register kept by the Company at its office
or agency for such purpose. If shares of the Preferred Stock are
registered directly in the name of the holder who is the beneficial
owner of such shares, such beneficial holder is also the registered
holder. If shares of the Preferred Stock are registered in the name
of a broker, dealer, bank, trust company or other institution, such
institution is the registered holder of such shares. Generally, the
registered holder of shares of the Preferred Stock completes the
Letter of Transmittal in order to tender such shares. However, if
the registered holder or physical holder does not want to complete
the Letter of Transmittal itself, such holder may ask any broker,
dealer, bank or trust company to complete the Letter of Transmittal
on its behalf and effect the tender of such shares.
Nominees and Custodian. These terms refer to the broker, dealer,
bank, trust company or other institution that holds shares of the
Preferred Stock on behalf of a beneficial owner of such shares.
Although such shares belong to such beneficial owner, such
institution is the registered holder of such shares and, accordingly,
such shares are registered in the name of such institution and such
beneficial holder will need to contact such institution and provide
it with completed Instructions with Respect to the Tender of shares
of the Preferred Stock form in order to tender such shares.
Q. WHAT ARE QUICS?
The QUICS are unsecured debt securities to be issued by The Williams
Companies which are subordinate in right to payment to its senior
indebtedness and to all obligations of its subsidiaries. However,
the QUICS are senior to the claims of the holders of The Williams
Companies' capital stock, including the shares of the Preferred
Stock. In addition, the QUICS will have the following terms:
bullet The QUICS will have a 30 year stated maturity, whereas the shares of
the Preferred Stock have no stated final maturity.
bullet The QUICS will bear interest at % per annum and are payable
quarterly on the day before the date you would have received dividend
payments on the shares of the Preferred Stock, if they were not
tendered.
bullet The QUICS regular quarterly interest payments may be deferred for a
period (defined in the Prospectus as a "Deferral Period") of up to 20
consecutive quarters at the option of The Williams Companies. The
Company believes that such deferral is unlikely because if 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. Although the quarterly dividend payments for the shares of
the Preferred Stock may also be suspended, such a suspension period
may be indefinite. Another distinction between the provision to
defer interest payments on the QUICS and suspension of dividend
payments on the shares of the Preferred Stock is that the deferred
QUICS interest payments will accumulate interest at a compounding
rate equal to the stated interest rate on the QUICS whereas the
shares of the Preferred Stock suspended dividend payments do not have
such a compounding feature. In addition, the interest received on
the QUICS will not be eligible for the dividends received deduction
for corporate holders, whereas dividends on the shares of the
Preferred Stock are eligible for the dividends received deduction for
corporate holders. Lastly, the covenants under which the QUICS are
issued do not provide any voting rights to holders during the
Deferral Period, while, under certain circumstances, the holders of
the shares of the Preferred Stock may have certain limited voting
rights.
Q. HOW DOES THE INTEREST RATE ON THE QUICS COMPARE TO THE DIVIDEND RATE
ON THE SHARES OF THE PREFERRED STOCK?
A. The effective yield for the shares of the Preferred Stock, at its
stated liquidation preference of $25 per share, is ____% per annum.
The interest rate on the QUICS is %, or % higher than the
shares of the Preferred Stock.
Q. THE NEXT DIVIDEND PAYMENT DATE (SUBJECT TO BOARD DECLARATION) FOR THE
SHARES OF THE PREFERRED STOCK WILL BE SEPTEMBER 1, 1995. WILL THE
HOLDERS THAT PARTICIPATE IN THE EXCHANGE OFFER BE ELIGIBLE FOR THAT
DIVIDEND?
A. No. However, as part of the Exchange Offer, holders of shares of the
Preferred Stock accepted for exchange in the Exchange Offer will be
entitled to receive cash equal to the accrued and unpaid dividend on
such shares accumulating after June 1, 1995, to the Issuance Date in
lieu of such dividends, to be payable on the Issuance Date to such
holders.
Q. WILL THE QUICS BE LISTED?
A. Like the Preferred Stock, the QUICS are expected to be listed on the
New York Stock Exchange.
Q. WILL THE EXCHANGE CONSTITUTE A TAXABLE EVENT?
A. The Exchange Offer will be a taxable event to those holders that
tender their shares of the Preferred Stock in exchange for the QUICS.
Williams recommends that each holder read the description on "Special
Factors -- Certain United States Federal Income Tax Consequences"
within the Prospectus and/or consult their tax advisor to determine
their specific circumstances.
Furthermore, the QUICS will be treated as having been issued with
original issue discount, whereas the shares of the Preferred Stock
were not issued with original issue discount.
Q. WILL BACKUP WITHHOLDING APPLY TO PAYMENTS MADE PURSUANT TO THE
EXCHANGE OFFER OR WITH RESPECT TO THE QUICS?
A. Under federal income tax law, a 31% backup withholding tax will be
imposed on the amount of payments made pursuant to the Exchange
Offer, payments made with respect to the QUICS and payments of the
proceeds of sale of that are made to certain shareholders. In order
to avoid such backup withholding, each tendering shareholder must
provide the Exchange Agent with such shareholder's correct taxpayer
identification number and certify that such shareholder is not
subject to backup withholding by completing Substitute Form W-9. If
the Exchange Agent is not provided with the correct taxpayer
identification number, the shareholder may be subject to a $50
penalty imposed by the Internal Revenue Service.
Certain shareholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup
withholding requirements. In order to satisfy the Exchange Agent
that a foreign individual qualifies as an exempt recipient, such
shareholder must submit a statement of Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status.
Form W-8 can be obtained from the Information Agent. For further
information concerning backup withholding and instructions for
completing the Substitute Form W-9, consult the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form
W-9.
Q. WHAT IS THE PROCESS FOR A HOLDER TO PARTICIPATE IN THE EXCHANGE OFFER?
A. Each holder of the shares of the Preferred Stock should receive a
copy of the Prospectus, a Letter of Transmittal, a Notice of
Guaranteed Delivery, a letter addressed to clients and Guidelines for
Certification of Taxpayer Identification Number on Substitute Forms
W-9 and W-8 along with this Question and Answer letter. Williams
encourages each holder to review each document and to contact their
broker and tax advisor for assistance. In the event holders require
other sources of information, they should contact the Information
Agent or the Dealer Managers at the toll-free numbers listed in the
Prospectus or the Letter of Transmittal.
Registered (physical) holders must send the certificates representing
shares of the Preferred Stock to be tendered and a completed Letter
of Transmittal to the Exchange Agent or may ask any broker, dealer,
bank or trust company to do so on its behalf.
If the shares of the Preferred Stock are registered in the name of a
broker, dealer, bank, trust company or other nominee, the holder must
instruct such nominee to tender on its behalf such shares by
completing the Letter of Transmittal or by Agent's Message for
book-entry transfer. Williams recommends that holders contact the
Information Agent before beginning the process.
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.
The Letter of Transmittal must be mailed in time to reach the
Exchange Agent by the Expiration Time of the Exchange Offer. In
the event the holder is unable to fulfill the requirements of the
Letter of Transmittal, the holder must submit the Notice of
Guaranteed Delivery, received by the Exchange Agent prior to the
Expiration Time, and then, within five New York Stock Exchange
trading days, the Exchange Agent must receive the certificates, in
proper form for transfer, and the completed Letter of Transmittal.
Q. ARE THERE ANY COSTS THAT A PARTICIPATING HOLDER WILL BEAR IN CONTEXT
OF THE EXCHANGE OFFER?
A. A fee of $.50 per share will be paid to brokers that successfully
solicit tenders on behalf of The Williams Companies. In addition,
the Dealer Managers, the Information Agent and the Exchange Agent
will be paid fees for assisting with this transaction. All such
fees will be paid by The Williams Companies. However, if such
holder's shares are held by a broker, dealer, bank or trust
company, the holder may be charged a fee for their services.
Q. WHEN WILL THE EXCHANGE OFFER EXPIRE?
A. The Exchange Offer is scheduled to expire at 5:00 p.m., New York City
time, on , 1995 or, if extended by the Company, in its sole
discretion, the latest date and time to which extended (the
"Expiration Time"). The Company may decide to amend or terminate
the Exchange Offer prior to the Expiration Time, and it may at any
time and for any reason decide to extend or terminate the Exchange
Offer as described further in the accompanying Prospectus.
Q. CAN A HOLDER OF SHARES OF THE PREFERRED STOCK REVOKE ITS EXCHANGE OF
SHARES?
A. Tenders of shares of the Preferred Stock 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 the 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 address set forth in the Letter of
Transmittal. Any such notice of withdrawal must specify (i) the
holder named in the Letter of Transmittal as having tendered
certificates with respect to the 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 such shares to be
withdrawn, (iii) a statement that such holder is withdrawing its
election to have such shares of the Preferred Stock exchanged, and
the name of the registered holder of such shares of the Preferred
Stock, and such notice of withdrawal must be signed by the holder in
the same manner as the original signature on the Letter of
Transmittal (including any required signature guarantees) or be
accompanied by evidence satisfactory to the Company that the person
withdrawing the tender has succeeded to the beneficial ownership of
the shares of the Preferred Stock being withdrawn. The Exchange
Agent will return the properly withdrawn shares of the Preferred
Stock promptly following receipt of notice of withdrawal. If shares
of the Preferred Stock have been tendered pursuant to the procedure
for book-entry transfer, any notice of withdrawal must specify the
name and number of the account at DTC to be credited with the
withdrawn shares of the Preferred Stock and otherwise comply with
DTC's procedures.
Q. TO WHOM SHOULD ADDITIONAL QUESTIONS BE ADDRESSED?
A. Additional questions or requests for information should be addressed
to the Information Agent, Morrow & Co., Inc. Banks and Brokers call
toll free 1-800-662-5200; all others call toll free 1-800-566-9058.
THE ABOVE SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT IN ALL
RESPECTS TO THE PROVISIONS OF AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO THE PROSPECTUS AND THE LETTER OF TRANSMITTAL.
