<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 26, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
THE WILLIAMS COMPANIES, INC.
(Exact name of issuer as specified in its charter)
----------------
DELAWARE 73-0569878
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(918) 588-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
WILTEL SAVINGS AND RETIREMENT PLAN
(Full title of plan)
----------------
SHAWNA L. BARNARD, ESQ.
THE WILLIAMS COMPANIES, INC.
ONE WILLIAMS CENTER
TULSA, OK 74172
(918) 588-2000
(Name, address, and telephone number of agent for service)
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO TO BE PRICE OFFERING REGISTRATION
BE REGISTERED (1) REGISTERED PER UNIT PRICE FEE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
($1 par value) 200,000 (2) $41.38(3) $8,275,000.00(3) $2,507.58
================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee
benefit plan described herein.
(2) Together with accompanying preferred stock purchase rights as to which
no separate fee is payable.
(3) Estimated based on the reported New York Stock Exchange composite
transactions closing price on June 23, 1997, solely for the purpose of
calculating the registration fee in accordance with Rule 457.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference and made a
part of this prospectus:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
All documents subsequently filed by the Company and the Plan pursuant to
Section 13(a), 13(c), 14, or 15(d) of the 1934 Act prior to the termination of
the offering of the Shares shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of the filing of such documents.
Any statement contained in a previously filed document incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein modifies or supersedes
such statement, and any statement contained in any previously filed document or
contained herein shall be deemed modified or superseded to the extent that a
statement contained in a subsequently filed document which is incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof except
as so modified or superseded.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The consolidated financial statements and schedule of the Company
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. The financial statements and schedule
referred to above are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in auditing and
accounting.
The reports of independent auditors relating to the audited consolidated
financial statements and schedules of the Company in any documents filed
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the offering to the
extent covered by consents thereto filed with the Securities and Exchange
Commission will be incorporated by reference in reliance upon the authority of
such independent auditors as experts in auditing and accounting.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company 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 such person in connection with any threatened, pending, or
completed action, suit, or proceeding in which such person is made a party by
reason of such person 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 bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise. The Bylaws 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.
-2-
<PAGE> 3
The Company maintains policies of insurance 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 that 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 8. EXHIBITS.
*(4.1) -- Restated Certificate of Incorporation of Williams (filed as
Exhibit 4(a) to Form 8-B Registration Statement, filed
August 20, 1987).
*(4.2) -- 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).
*(4.3) -- 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).
*(4.4) -- Certificate of Amendment of Restated Certificate of
Incorporation, dated May 20, 1994 (filed as Exhibit 3(d) to
Form 10-K for the fiscal year ended December 31, 1994).
*(4.5) -- Certificate of Designation with respect to the $3.50
Cumulative Convertible Preferred Stock (filed as Exhibit
3.1(c) to the Prospectus and Information Statement to
Amendment No. 2 to the Registration Statement on Form S-4,
filed Match 30, 1995).
*(4.6) -- Certificate of Increase of Authorized Number of Shares of
Series A Junior Participating Preferred Stock (filed as
Exhibit 3(f) to Form 10-K for the fiscal year ended
December 31, 1995).
*(4.7) -- Rights Agreement, dated as of February 6, 1996, between
Williams and First Chicago Trust Company of New York (filed
as Exhibit 4 to Williams Form 8-K, filed January 24, 1996).
*(4.8) -- Bylaws of Williams, as amended (filed, as amended, as
Exhibit 3 to Form 10-Q for the quarter ended September 30,
1996).
(4.9) -- Certificate of Amendment of Restated Certificate of
Incorporation, dated May 15, 1997.
*(4.10) -- U.S. $1,000,000,000 Credit Agreement, dated as of December
20, 1996, among the Company and the lenders named therein
and Citibank, N.A., as agent (filed as Exhibit 4.3 to Form
10-K for the year ended December 31, 1996).
*(4.11) -- 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 Shawna L. Barnard, Esq., Assistant
Secretary and Counsel for the Company, relating to the
validity of the securities.**
- ------------------------------
*The exhibits have heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and are incorporated herein by
reference.
**The registrant hereby undertakes that it will submit the plan and any
amendment thereto to the Internal Revenue Service ( IRS ) in a timely manner
and will make all changes required by the IRS in order to qualify the plan.
-3-
<PAGE> 4
(23.1) -- Consent of Shawna L. Barnard (contained in Exhibit 5.1).
(23.2) -- Consent of Ernst & Young LLP.
(24.1) -- Power of Attorney.
(24.2) -- Certified copy of resolution authorizing signatures
pursuant to Power of Attorney.
(99) -- The WilTel Savings and Retirement Plan.
ITEM 9. UNDERTAKINGS.
1. The Company 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; and
(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;
provided, however, that paragraphs 1(i) and 1(ii) above do not apply if
the information required to be included in a post-effective amendment by
these paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference 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 therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
2. The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange 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 therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise
(other than the insurance policies referred to above), the Company 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 a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer, or controlling person of the Company in a
successful defense of any action, suit, or proceeding) is asserted against the
Company by such director, officer, or controlling person in connection
-4-
<PAGE> 5
with the securities being registered, the Company will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
---------------
SIGNATURES
The Registrant. 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-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Tulsa and State of Oklahoma on the
26th day of June, 1997.
THE WILLIAMS COMPANIES, INC.
(Registrant)
By /s/Shawna L. Barnard
---------------------------------
(Shawna L. Barnard,
Attorney-in-fact)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on June 26, 1997:
SIGNATURE TITLE
--------- -----
* Chairman of the Board, President
- ------------------------------------ and Chief Executive Officer)
Keith E. Bailey (Principal Executive Officer)
* Senior Vice President
- ------------------------------------ (Principal Financial Officer)
Jack D. McCarthy
* Controller
- ------------------------------------ (Principal Accounting Officer)
Gary R. Belitz
* Director
- ------------------------------------
Glenn A. Cox
* Director
- ------------------------------------
Thomas H. Cruikshank
* Director
- ------------------------------------
Patricia L. Higgins
-5-
<PAGE> 6
* Director
- ------------------------------------
W. R. Howell
* Director
- ------------------------------------
Robert J. LaFortune
* Director
- ------------------------------------
James C. Lewis
* Director
- ------------------------------------
Jack A. MacAllister
* Director
- ------------------------------------
James A. McClure
* Director
- ------------------------------------
Peter C. Meinig
* Director
- ------------------------------------
Kay A. Orr
* Director
- ------------------------------------
Gordon R. Parker
* Director
- ------------------------------------
Joseph H. Williams
*By /s/Shawna L. Barnard
--------------------------------------
(Shawna L. Barnard, Attorney-in-fact)
The Plan. Pursuant to the requirements of the Securities Act of 1933,
the trustees (or other persons who administer the Plan) have duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Tulsa, State of Oklahoma, on this 26th day of
June, 1997.
WILTEL SAVINGS AND RETIREMENT PLAN
(Plan)
By: /s/ JACK D. MCCARTHY
--------------------------------------
Jack D. McCarthy
Member, Benefits Committee
-6-
<PAGE> 7
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
*(4.1) -- Restated Certificate of Incorporation of Williams (filed as
Exhibit 4(a) to Form 8-B Registration Statement, filed
August 20, 1987).
*(4.2) -- 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).
*(4.3) -- 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).
*(4.4) -- Certificate of Amendment of Restated Certificate of
Incorporation, dated May 20, 1994 (filed as Exhibit 3(d) to
Form 10-K for the fiscal year ended December 31, 1994).
*(4.5) -- Certificate of Designation with respect to the $3.50
Cumulative Convertible Preferred Stock (filed as Exhibit
3.1(c) to the Prospectus and Information Statement to
Amendment No. 2 to the Registration Statement on Form S-4,
filed Match 30, 1995).
*(4.6) -- Certificate of Increase of Authorized Number of Shares of
Series A Junior Participating Preferred Stock (filed as
Exhibit 3(f) to Form 10-K for the fiscal year ended December
31, 1995).
*(4.7) -- Rights Agreement, dated as of February 6, 1996, between
Williams and First Chicago Trust Company of New York (filed
as Exhibit 4 to Williams Form 8-K, filed January 24, 1996).
*(4.8) -- Bylaws of Williams, as amended (filed, as amended, as
Exhibit 3 to Form 10-Q for the quarter ended September 30,
1996).
(4.9) -- Certificate of Amendment of Restated Certificate of
Incorporation, dated May 15, 1997.
*(4.10) -- U.S. $1,000,000,000 Credit Agreement, dated as of December
20, 1996, among the Company and the lenders named therein
and Citibank, N.A., as agent (filed as Exhibit 4.3 to Form
10-K for the year ended December 31, 1996).
*(4.11) -- 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 Shawna L. Barnard, Esq., Assistant
Secretary and Counsel for the Company, relating to the
validity of the securities.
(23.1) -- Consent of Shawna L. Barnard (contained in Exhibit 5.1).
- --------------------
*The exhibits have heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and are incorporated herein by
reference.
-7-
<PAGE> 8
(23.2) -- Consent of Ernst & Young LLP.
(24.1) -- Power of Attorney.
(24.2) -- Certified copy of resolution authorizing signatures pursuant
to Power of Attorney.
(99) -- The WilTel Savings and Retirement Plan.
-8-
<PAGE> 1
EXHIBIT 4.9
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
* * * * * * * *
THE WILLIAMS COMPANIES, INC., a corporation organized and existing
under and by virtue of the General Corporation Law of Delaware, DOES HEREBY
CERTIFY:
FIRST: That the Board of Directors of The Williams Companies, Inc., at
a meeting of the Board of Directors duly called and held on January 26, 1997,
adopted a resolution proposing and declaring advisable the following amendment
to the Restated Certificate of Incorporation, as amended, of said Company:
RESOLVED that the Board of Directors of the Company hereby
declares it advisable to amend Article FOURTH of the Company's Restated
Certificate of Incorporation, as amended, to increase the authorized
Common Stock, $1.00 par value, so that, as amended, the first paragraph
of Article FOURTH shall be, and read, as follows:
"FOURTH: The total number of shares of capital stock which
the Company shall have authority to issue is 510,000,000 shares,
consisting of 480,000,000 shares of
<PAGE> 2
Common Stock, par value $1.00 per share (the "Common Stock") and
30,000,000 shares of Preferred Stock, par value $1.00 per share (the
"Preferred Stock")."
SECOND: That the aforesaid amendment was duly adopted in accordance
with the applicable provisions of Section 242 of the General Corporation Law of
Delaware.
IN WITNESS WHEREOF, said The Williams Companies, Inc. has caused this
Certificate to be signed by William G. von Glahn, its Senior Vice President and
General Counsel, and attested by David M. Higbee, its Secretary, this 15th day
of May, 1997.
THE WILLIAMS COMPANIES, INC.
By: /s/ William G. von Glahn
-------------------------------------
William G. von Glahn
Senior Vice President and
General Counsel
ATTEST:
By: /s/ David M. Higbee
----------------------------
David M. Higbee
Secretary
<PAGE> 1
[THE WILLIAMS COMPANIES, INC. LETTERHEAD]
EXHIBIT 5.1
June 26, 1997
The Williams Companies, Inc.
One Williams Center
Tulsa, OK 74172
Dear Sirs:
The Williams Companies, Inc., a Delaware corporation (the "Company")
contemplates filing a Registration Statement on Form S-8 under the Securities
Act of 1933, as amended (the "Act"), relating to the registration of Common
Stock of the Company, $1.00 par value (the "Common Stock") and associated
preferred stock purchase rights (the "Rights"), to be issued pursuant to the
terms of the WilTel Savings and Retirement Plan (the "Plan").
As Counsel for the Company, I have examined the corporate proceedings
and such other legal matters as I deem relevant to the authorization and
issuance of the Common Stock and the Rights. Based on such examination, it is
my opinion that when the Common Stock has been issued by the Company pursuant
to the terms of the Plan, the Common Stock and the Rights will be legally
issued, fully paid, and nonassessable.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ Shawna L. Barnard
------------------------
Shawna L. Barnard
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm in Item 5., "Interests of Named Experts
and Counsel," in the Registration Statement (Form S-8) pertaining to the
registration of 200,000 shares of The Williams Companies, Inc. common stock to
be used in connection with the WilTel Savings and Retirement Plan and to the
incorporation by reference therein of our report dated February 10, 1997, with
respect to the consolidated financial statements and schedule of The Williams
Companies, Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Tulsa, Oklahoma
June 24, 1997
<PAGE> 1
EXHIBIT 24.1
THE WILLIAMS COMPANIES, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each of the undersigned
individuals, in their capacity as a director or officer, or both, as
hereinafter set forth below their signature, of THE WILLIAMS COMPANIES, INC., a
Delaware corporation ("Williams"), does hereby constitute and appoint WILLIAM
G. VON GLAHN, DAVID M. HIGBEE and SHAWNA L. BARNARD 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-8 for the registration
under the Securities Act of 1933, as amended, of two hundred thousand (200,000)
shares of Common Stock of Williams issuable pursuant to THE WILTEL SAVINGS AND
RETIREMENT PLAN FOR SELECT BARGAINING UNITS, together with associated Preferred
Stock purchase rights and Plan interests, and any and all amendments and
post-effective amendments to said registration statement and any and all
instruments necessary or incidental in connection therewith; and
THAT the undersigned Williams does hereby constitute and appoint
WILLIAM G. VON GLAHN, DAVID M. HIGBEE and SHAWNA L. BARNARD its true and lawful
attorneys and each of them (with full power to act without the others) its true
and lawful attorney for it and in its name and on its behalf to sign said
registration statement and any and all amendments and post-effective amendments
thereto and any and all instruments necessary or incidental in connection
therewith.
Each of said attorneys shall have full power of substitution and
resubstitution, and said attorneys or any of them or any substitute appointed
by any of them hereunder shall have full power and authority to do and perform
in the name and on behalf of each of the undersigned, in any and all
capacities, every act whatsoever requisite or necessary to be done in the
premises, as fully to all intents and purposes as each of the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys or any of them or of any such substitute pursuant hereto.
IN WITNESS WHEREOF, the undersigned have executed this instrument, all
as of the 20th day of March, 1997.
/s/ Keith E. Bailey /s/ Jack D. McCarthy
- ----------------------------------- ------------------------------------
Keith E. Bailey Jack D. McCarthy
Chairman of the Board, Senior Vice President
President and (Principal Financial Officer)
Chief Executive Officer
(Principal Executive Officer)
/s/ Gary R. Belitz
--------------------------------
Gary R. Belitz
Controller
(Principal Accounting Officer)
<PAGE> 2
Page 2
/s/ Glenn A. Cox /s/ Thomas H. Cruikshank
- ----------------------------------- ------------------------------------
Glenn A. Cox Thomas H. Cruikshank
Director Director
/s/ Patricia L. Higgins /s/ W.R. Howell
- ----------------------------------- ------------------------------------
Patricia L. Higgins W. R. Howell
Director Director
/s/ Robert J. LaFortune /s/ James C. Lewis
- ----------------------------------- ------------------------------------
Robert J. LaFortune James C. Lewis
Director Director
/s/ Jack A. MacAllister /s/ James A. McClure
- ----------------------------------- ------------------------------------
Jack A. MacAllister James A. McClure
Director Director
/s/ Peter C. Meinig /s/ Kay A. Orr
- ----------------------------------- ------------------------------------
Peter C. Meinig Kay A. Orr
Director Director
/s/ Gordon R. Parker /s/ Joseph H. Williams
- ----------------------------------- ------------------------------------
Gordon R. Parker Joseph H. Williams
Director Director
THE WILLIAMS COMPANIES, INC.
By /s/ William G. von Glahn
----------------------------------
William G. von Glahn
ATTEST: Senior Vice President
/s/ David M. Higbee
- -----------------------------------
David M. Higbee
Secretary
<PAGE> 1
EXHIBIT 24.2
I, the undersigned, SHAWNA L. BARNARD, Assistant Secretary of THE
WILLIAMS COMPANIES, INC., a Delaware company (hereinafter called the
"Company"), do hereby certify that at a meeting of the Board of Directors of
the Company, duly convened and held on March 20, 1997, at which a quorum of
said Board was present and acting throughout, the following resolutions were
duly adopted:
RESOLVED that authorization be, and hereby is,
given for the issuance and sale, from time to time, of up to two
hundred thousand (200,000) shares of the Company's authorized but
unissued Common Stock, one dollar ($1.00) par value, and
associated preferred stock purchase rights, under the terms and
provisions of The WilTel Savings and Retirement Plan for Select
Bargaining Units (the "Plan").
RESOLVED that the officers of the Company be, and they
hereby are, authorized to execute and file with the Securities
and Exchange Commission under the Securities Act of 1933, as
amended, a Registration Statement on Form S-8 or other Securities
Act registration form as may be considered appropriate, and all
amendments and supplements thereto, all required exhibits and
documents in connection therewith, the prospectus contained
therein and all amendments or supplements thereto with respect to
not more than two hundred thousand (200,000) shares of Common
Stock, one dollar ($1.00) par value, and associated preferred
stock purchase rights, of the Company to be purchased by
employees in accordance with the terms and provisions of the
Plan, and such indeterminate amount of plan interests
constituting separate securities required to be registered, and
to make all such payments and to do or cause to be done all other
acts and things as, in their opinion or in the opinion of any of
them, may be necessary or desirable and proper in order to effect
such filing or in order that such Registration Statement and any
such amendment or amendments may become effective and may remain
in effect as long as shall be required.
RESOLVED that the form of power of attorney submitted to
this meeting for use in connection with the execution and filing
for and on behalf of the Company of the Registration Statement
referred to in the immediately preceding resolution and any
amendments or supplements thereto is hereby approved and the
Chairman of the Board, the
<PAGE> 2
Page 2
President or any Vice President of the Company be, and hereby is,
authorized to execute said power of attorney in the form so
presented by, for and on behalf of the Company.
RESOLVED that the officers of the Company be, and they
hereby are, authorized and directed in the name and on behalf of
the Company to take any and all action which they may deem
necessary or advisable in order to effect the registration or
qualification (or exemption therefore) of such securities for
issue, offer, sale or trade under the Blue Sky or securities laws
of any state of the United States of America or elsewhere, and in
connection therewith to execute, acknowledge, verify, deliver,
file or cause to be published any applications, reports, consents
to service of process, appointments of attorney to receive
service of process and other papers and instruments which may be
required under such applications, reports, consents to service of
process, appointments of attorney to receive service of process
and other papers and instruments which may be required under such
laws and to take any and all further action which they may deem
necessary or advisable in order to maintain any such registration
or qualification for as long as they deem necessary or as
required by law.
RESOLVED that the Chairman of the Board, the President,
any Vice President, the Secretary or any Assistant Secretary of
this Company be, and they hereby are, authorized to execute and
deliver on behalf of this Company applications for the listing of
not more than an additional two hundred thousand (200,000) shares
of Common Stock of the Company together with associated preferred
stock purchase rights reserved for issuance under the terms of
the Plan, on the New York Stock Exchange and the Pacific Stock
Exchange and said officers are further authorized to take all
such action and to file with such exchanges all such documents as
may be necessary in order to accomplish the same.
RESOLVED that the Chairman of the Board, the President,
any Vice President, the Secretary or any Assistant Secretary or
any one or more of them be, and they hereby are, authorized and
empowered to appear before the New York Stock Exchange and the
Pacific Stock Exchange or any committees or any representatives
of such exchanges with authority to present such applications for
listing and to make such changes in such applications or in any
amendments relative thereto and to furnish such information in
connection therewith as may be
<PAGE> 3
Page 3
necessary or advisable to conform with the requirements for the
listing of such Common Stock on said New York Stock Exchange and
Pacific Stock Exchange.
RESOLVED that First Chicago Trust Company of New York,
transfer agent for the Company, as agent for the transfer of
certificates of the Company's Common Stock, one dollar ($1.00)
par value, and First Interstate Bank of California as co-transfer
agent, be, and they hereby are, authorized (1) to record,
countersign and deliver to First Chicago Trust Company of New
York as registrar, or First Interstate Bank of California as co-
registrar, certificates for shares of Common Stock, one dollar
($1.00) par value, of the Company to be issued as authorized
under the terms of the Plan; (2) to deliver such certificates
when countersigned by such registrar or co-registrar; and (3)
from time to time to make transfers of certificates for such
shares of Common Stock with the same authority and upon the terms
and conditions as to such additional shares of Common Stock as
are fully set forth in the resolutions previously adopted by the
Board of Directors of the Company with respect to presently
outstanding Common Stock of the Company.
RESOLVED that First Chicago Trust Company of New York, as
registrar for registration of the Company's Common Stock, one
dollar ($1.00) par value, and First Interstate Bank of California
as co-registrar, be, and they hereby are, authorized and directed
to record, when presented by First Chicago Trust Company of New
York, transfer agent, or First Interstate Bank of California, co-
transfer agent, of the Company's Common Stock, and register
transfers of certificates for shares of the Company's Common
Stock to be issued as authorized under the terms of the Plan with
the same authority and upon the same terms and conditions as to
such shares of Common Stock as are fully set forth in resolutions
previously adopted by the Board of Directors of the Company with
respect to the presently outstanding Common Stock of the Company.
RESOLVED that the officers of this Company be, and they
hereby are, authorized to take all such further action and to
execute and deliver all such further instruments and documents in
the name and on behalf of the Company and under its corporate
seal or otherwise and to pay such fees and expenses as shall be
necessary, proper or advisable in order to fully carry out the
intent and to accomplish the purposes of the foregoing
resolutions.
<PAGE> 4
Page 4
I further certify that the foregoing resolutions have not been
modified, revoked or rescinded and are in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
seal of THE WILLIAMS COMPANIES, INC., this 26th day of June, 1997.
/s/ Shawna L. Barnard
------------------------------
Shawna L. Barnard
Assistant Secretary
(CORPORATE SEAL)
<PAGE> 1
EXHIBIT 99
SUMMARY PLAN DESCRIPTION
FOR
WILTEL SAVINGS AND RETIREMENT PLAN
THIS DOCUMENT CONSTITUTES A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
THE DATE OF THIS DOCUMENT IS JUNE 26, 1997
<PAGE> 2
SUMMARY PLAN DESCRIPTION
FOR
WILTEL SAVINGS AND RETIREMENT PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
1. Registration Statement...................................... 1
2. Introduction................................................ 1
3. Highlights.................................................. 1
4. Type of Plan................................................ 2
5. Plan Administrator.......................................... 2
6. Trustee/Trust Fund.......................................... 3
7. Hours of Service Definition................................. 3
8. Eligibility and Participation............................... 3
9. Contributions............................................... 4
10. Limitations on All Contributions Under The Law.............. 5
11. Vesting..................................................... 5
12. Participant Direction of Investment......................... 7
13. Making Your Investment Allocations.......................... 11
14. Timing of Transactions...................................... 11
15. Who Holds Your Investments.................................. 11
16. Withdrawals During Employment............................... 11
17. Distributions After Termination of Employment............... 12
18. Distribution Upon Disability................................ 13
19. Distribution Upon Death..................................... 13
20. Federal Income Tax Withholding from Withdrawals and
Distributions; Rollovers.................................. 13
21. General Summary of the Federal Income Tax Effect of the
Plan...................................................... 14
22. Loss of Benefits............................................ 16
23. Spendthrift Provision....................................... 16
24. Claims Procedure............................................ 17
25. Participant Loans........................................... 17
26. Technical Information....................................... 18
27. Plan Amendment or Termination............................... 18
28. Right to Employment......................................... 18
29. Participant's Rights Under ERISA............................ 18
Appendix A -- Performance History of Investment Options
</TABLE>
i
<PAGE> 3
SUMMARY PLAN DESCRIPTION
FOR
WILTEL SAVINGS AND RETIREMENT PLAN
1. REGISTRATION STATEMENT
A registration statement on Form S-8 (herein, together with all amendments
thereto, referred to as the "Registration Statement") with respect to the Wiltel
Savings and Retirement Plan, as amended (the "Plan"), has been filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "1933 Act"). The securities offered under the terms of the Plan consist of
interests in the Plan and shares of The Williams Companies, Inc. (the "Parent")
common stock, $1.00 par value. Currently, the Plan is sponsored by WCS
Communications Systems, Inc. until on or about August 1, 1997, when WilTel
Communications, LLC will become the sponsor (the "Employer"). For further
information with respect to the Plan and the securities which are issuable under
the terms of the Plan, reference is made to the Registration Statement,
including the exhibits thereto, and the remainder of this document.
The Parent undertakes to provide without charge to each person who
participates in the Plan, upon written or oral request of such person, a copy of
the documents incorporated by reference in Item 3 of Part II of the Registration
Statement (other than the exhibits to such documents unless such exhibits are
specifically incorporated by reference in such documents), which documents are
hereby incorporated by reference into this document. In addition, the Parent
will also make available without charge copies of its annual report to
stockholders for the latest fiscal year, the latest annual report of the Plan,
and all reports, proxy statements and other communications distributed to
stockholders generally. Requests should be directed to the Benefits Service
Center, telephone 1-800-320-8040.
2. INTRODUCTION
The Employer has established the WilTel Savings and Retirement Plan
("Plan") for the benefit of eligible employees. If you decide to contribute, the
Plan can provide benefits to you upon retirement or termination of employment or
for other reasons including death or disability. This summary plan description
is designed to describe, in a summary fashion, the Plan's most important
provisions; however, this summary does not contain every detail of the Plan or
its specific terms. You will not gain any new rights because of a misstatement
in, or omission from, this summary or by the operation of the Plan. Contact the
Benefits Service Center at 1-800-320-8040 if you want to review or purchase a
copy of the Plan's legal document.
IF THERE IS ANY QUESTION OR CONFLICT BETWEEN WHAT IS SAID IN THIS SUMMARY
AND THE LANGUAGE IN THE PLAN'S LEGAL DOCUMENT, THE LEGAL DOCUMENT WILL PREVAIL.
This summary is for your information. Neither this summary nor the benefits
provided by the Plan is a promise of continued employment with the Employer or
the Benefits Committee. The Employer or the Benefits Committee may amend or
terminate the Plan at any time. If the Plan is amended or terminated, your
benefits, if any, may be different from those summarized.
3. HIGHLIGHTS
* If you are an eligible employee, you may elect to participate in the Plan on
the first day of the month following your date of hire.
* You decide the amount of money you want to save. You can save up to 15 percent
of your eligible compensation. Your contribution percentage will automatically
be withheld from your paycheck. You can contribute using either pre-tax or
after-tax dollars or a combination of the two, stated in whole percentages.
* You pay no current federal income taxes on salary deferral contributions,
Employer contributions or earnings credited to your accounts under the Plan.
<PAGE> 4
* All Employer contributions and your contributions are invested at your
direction in a choice of five different investment options.
* You may withdraw or borrow amounts contributed to the Plan under certain
conditions.
* The full value of your accounts under the Plan, less applicable taxes, is
payable to you if your employment is terminated:
- On or after you attain Normal Retirement Date.
- Upon a total and permanent disability.
- For any other reason, if you are vested.
* The full value of your accounts under the Plan will be paid upon your death to
your spouse or other properly designated beneficiary.
4. TYPE OF PLAN
The Plan is commonly known as a Code section 401(k) profit sharing plan.
Section 9 explains how you share in the Employer's contributions to the trust
fund and the extent to which the Employer has an obligation to make
contributions to the trust fund.
The Plan is also intended to constitute a plan described in section 404(c)
of the Employee Retirement Income Security Act of 1974 ("ERISA"), and title 29
of the Code of Federal Regulations section 2550.404c-l, and the fiduciaries of
the Plan may be relieved of liability for any losses which are the direct and
necessary result of an investment instruction or instructions given by any
participant or beneficiary.
5. PLAN ADMINISTRATOR
The Administrative Committee is the Plan Administrator. The Administrative
Committee's telephone number is (918) 588-2000. You also may contact the
Administrative Committee (hereinafter the "Committee") at the address provided
below. The Committee is responsible for providing you and other participants
information regarding your rights and benefits under the Plan.
The Committee has the responsibility for making all discretionary
determinations under the Plan and for giving distribution directions to the
Trustee. The members of the Committee may change from time to time. You may
obtain the names of the current members of the Committee from the Employer.
The name of the party designated as agent for service of legal process and
the address where a processor may serve legal process upon the Plan are:
Administrative Committee
WilTel Savings and Retirement Plan
c/o The Williams Companies, Inc.
Post Office Box 2400, MD 47-3
Tulsa, Oklahoma 74102
A legal processor may also serve the Trustee.
All administrative expenses related to the Plan will be paid by the Plan
unless they are paid by the Employer. Currently, the Employer pays all of the
administrative expenses. Brokerage fees, transfer taxes and other expenses
related to the purchase and sale of securities are paid out of the investment
option to which the charges apply.
2
<PAGE> 5
6. TRUSTEE/TRUST FUND
The Employer has appointed --
BANK OF OKLAHOMA, N.A.
Post Office Box 880
Tulsa, Oklahoma 74101-0880
to hold the office of Trustee. The Trustee will hold all amounts the Employer
contributes to it in a trust fund. Upon the direction of the Committee, the
Trustee will make all distribution and benefit payments from the trust fund to
participants and beneficiaries. The Trustee maintains trust fund records on a
calendar year basis.
7. HOURS OF SERVICE DEFINITION
The Plan and this summary plan description include references to hours of
service. To advance on the vesting schedule or to share in the allocation of
Employer matching contributions for a Plan Year (which for the Plan is a
calendar year), the Plan generally requires you to complete a minimum number of
hours of service during a Plan Year. The sections covering vesting and
conditions for allocation explain this aspect of the Plan in the context of
those topics. However, hours of service has the same meaning for all purposes of
the Plan.
The Department of Labor, in its regulations, has prescribed various methods
under which the Employer may credit hours of service. The Employer has selected
the "actual" method for crediting hours of service. Under the actual method, you
will receive credit for each hour for which the Employer pays you, directly or
indirectly, or for which you are entitled to payment, for the performance of
your employment duties. You also will receive credit for certain hours during
which you do not work if the Employer pays you for those hours, such as paid
vacation.
The Employer is a member of a related group of business organizations. The
law treats all members of this related group as a single employer for purposes
of crediting hours of service. If you work (other hours) for more than one
member of the related group, you will receive hours of service credit under the
Plan to the same extent as if you had worked the other hours for the Employer.
8. ELIGIBILITY AND PARTICIPATION
You will become a Participant on the first day of the month immediately
following the date you complete one hour of service.
If you terminate employment after becoming a Participant in the Plan and
later return to employment, you will re-enter the Plan on your re-employment
date. Also, if you terminate employment after satisfying the Plan's eligibility
conditions but before actually becoming a Participant in the Plan, you will
become a participant in the Plan on the later of your scheduled entry date or
your employment date.
The following employees are eligible to participate in the Plan:
- employees covered by selective collective bargaining agreements between
the Employer and Communication Workers of America, including employees
covered by the collective bargaining agreements with Locals 9509, 9400,
6390 and 1109.
The following employees are NOT eligible to participate in the Plan:
- a nonresident alien who does not receive any earned income from the
Employer which constitutes United States source income.
- temporary employees-defined as employees hired for the completion of a
specific project after which employment with the Employer will terminate.
3
<PAGE> 6
- all employees of the Employer, other than employees covered by selective
collective bargaining agreements between the Employer and Communication
Workers of America, including the collective bargaining agreements with
Locals 9509, 9400, 6390 and 1109.
- leased employees.
- employees of a member of the Employer's related group which does not
participate in the Plan.
If by reason of this exclusion, you should become ineligible to participate
in the Plan, you may not contribute to the Plan during the period of your
exclusion, but during this period your account balances will continue to share
in trust fund earnings or losses.
9. CONTRIBUTIONS
EMPLOYEE CONTRIBUTIONS
You decide how much you want to contribute to the Plan. The amount of your
eligible compensation you choose to save in the Plan will be automatically
withheld from your paycheck. Your contributions to the Plan for a given month
are forwarded to the Trustee and are invested as soon as administratively
possible.
The Plan has a maximum combined savings percentage of 15 percent of
eligible compensation. You choose the savings percentage you want to contribute
and whether you want to save on a pre-tax or after-tax basis, or a combination
of the two. (The taxes referred to are federal and state income taxes. Social
Security taxes continue to be withheld from your pay, without regard to your
savings selection.)
When you enroll in the Plan, you elect the amount of pre-tax and after-tax
contributions you want to make to Plan. Your contributions must be based on a
percentage of your compensation of at least 1 percent and may not exceed 15
percent of your compensation for the Plan Year. You must specify how much you
want to have contributed in the form of pre-tax contributions and how much in
the form of after-tax contributions.
You may revoke or change your contribution percentage rate on a monthly
basis by calling the Voice Response System at 1-800-686-9457. You must call the
Voice Response System by the 22nd of the month prior to the month you wish your
change to be effective. Your contribution percentage will change on the first
paycheck you receive in the month following your timely call to the Voice
Response System.
ELECTIVE DEFERRALS (pre-tax contributions). The Plan includes a "401(k)
arrangement" under which you may elect to have the employer contribute a portion
of your compensation to the Plan by filling out a salary deferral agreement.
These contributions the Employer makes under your election are called "elective
deferrals." The Committee will allocate your elective deferrals to a separate
account designated by the Plan as your Deferral Contribution Account.
Elective deferrals are made to the Plan on a pre-tax basis. When you save
on a pre-tax basis, you are saving a percentage of your eligible compensation
that will be transferred to your Plan account before federal and state income
taxes are withheld; however, pre-tax contributions are subject to Social
Security taxes. This gives your pay more savings power.
The Internal Revenue Service limits the total dollar amount you can
contribute annually through elective deferrals. The maximum amount of elective
deferrals which employees may contribute for the calendar year is $9,500 in
1997.
If your elective deferrals for a particular calendar year exceed the
maximum amount allowed by the IRS for that calendar year, the Plan will refund
the excess amount, plus any earnings (or loss) allocated to that excess amount.
If you participate in another "401(k) arrangement" or in similar arrangements
under which you elect to have an employer contribute on your behalf, your total
elective deferrals may not exceed the maximum permitted amount for that calendar
year. The Form W-2 you receive from each employer for the calendar year will
report the amount of your elective deferrals for that calendar year under that
employer's plan. If your total exceeds the maximum permitted amount for that
calendar year, you should decide which plan you wish to designate as the plan
with the excess amount. If you designate this Plan as holding the excess amount
for a calendar year, you must notify the Committee of that designation by March
1 of the following
4
<PAGE> 7
calendar year. The Trustee then will distribute the excess amount to you, plus
any earnings (or loss) allocated to that excess amount.
AFTER-TAX EMPLOYEE CONTRIBUTIONS. The Plan also permits you to make
after-tax employee contributions to the trust fund, if you desire. When you make
after-tax employee contributions, the dollars your invest in your Plan account
already have had federal and state taxes withheld, or subtracted. You may choose
to contribute from 1 percent up to a maximum of 15 percent of your compensation
in after-tax contributions, subject to the combined savings percentage
limitation. Your combined elective deferrals and after-tax contributions cannot
exceed the maximum combined savings percentage of 15 percent of your
compensation. The Committee will allocate your after-tax contributions to a
separate account designated by the Plan as your After-Tax Contributions Account.
COMPENSATION. The Plan defines Compensation as the employee's total amount
of earnings reportable as W-2 wages for Federal income tax withholding purposes
plus elective deferrals, but excluding extraordinary compensation, such as, but
not limited to, performance bonuses, incentive awards and similar forms of
compensation, subject to the maximum compensation limitation contained in the
Internal Revenue Code ($160,000 for 1997). With limited exceptions, the Plan
includes your Compensation only for the part of the Plan Year in which you
actually are a participant.
10. LIMITATIONS ON ALL CONTRIBUTIONS UNDER THE LAW
The Plan contains limitations required by tax laws on the amount of
contributions that can be made to each participant's accounts for each Plan
Year. In general, the maximum annual addition that may be made to your accounts
or to any other defined-contribution plan to which the Employer or a related
company contributes is the lesser of 25 percent of your taxable compensation or
$30,000 in any Plan Year.
The term "annual addition" means for any year the sum of all Employer
contributions made under the Plan that are allocated to your accounts and your
contributions, including your after-tax and pre-tax contributions. In addition,
benefits under the Plan and any other defined-benefit or defined-contribution
plan maintained by the Employer or a related company may require reduction
because of your participation in this Plan and other such plans.
Due to limitations under the tax laws, pre-tax contributions, and the
earnings associated with those contributions, of highly compensated employees
may need to be returned to such employees if the Plan fails to pass complex
annual discrimination tests. In addition, if the Plan fails to pass the
discrimination tests, any after-tax employee contributions of highly compensated
employees may need to be returned to such employees and highly compensated
employees may forfeit matching contributions or be required to receive a
distribution from the Plan.
If you terminate employment and later are rehired, you will generally
retain credit for your prior months of employment for purposes of determining
the percentage of the Employer's matching contributions. Contact the Benefits
Service Center for more details.
11. VESTING FOR EMPLOYER MATCHING CONTRIBUTIONS MADE BEFORE MAY 14, 1996
100 PERCENT VESTING FOR ELECTIVE DEFERRALS AND AFTER-TAX EMPLOYEE
CONTRIBUTIONS. The vesting schedule described below does NOT apply to your
elective deferrals or to any after-tax contributions which you make to the Plan.
You are 100 percent vested at all times in the balances of both your Deferral
Contributions Account and your After-Tax Contributions Account.
5
<PAGE> 8
VESTING SCHEDULE FOR EMPLOYER MATCHING CONTRIBUTIONS. During your
employment prior to your normal retirement date, your interest in your Regular
Matching Contributions Account, if any, becomes vested in accordance with the
following schedule:
VESTING SCHEDULE
<TABLE>
<CAPTION>
PERCENT OF
NONFORFEITABLE
YEARS OF SERVICE INTEREST
---------------- --------------
<S> <C>
Less than 1............................................. 0%
1....................................................... 0%
2....................................................... 0%
3 or more............................................... 100%
</TABLE>
SPECIAL VESTING RULE FOR NORMAL RETIREMENT DATE. If you attain your Normal
Retirement Date while still employed by the Employer, your entire Plan interest
becomes 100 percent vested, including your Regular Matching Contributions
Account, even if you otherwise would not have a 100 percent vested interest.
Your NORMAL RETIREMENT DATE is the LATER OF (1) the date you attain age 65, or
(2) the fifth anniversary of the date your participation in the Plan commenced.
SPECIAL VESTING RULE FOR DEATH OR DISABILITY. If you die or become disabled
while still employed by the Employer, your entire Plan interest becomes 100
percent vested, including your Regular Matching Contributions Account, if any,
even if you otherwise would not have a 100 percent vested interest.
YEAR OF SERVICE. To determine your percentage under a vesting schedule, a
year of service means a Plan Year in which you complete at least 1,000 hours of
service. If you complete at least 1,000 hours of service during a Plan Year, you
will receive credit for a year of service even though you are not employed by
the Employer on the last day of that year.
You will receive credit for years of service with BELLSOUTH COMMUNICATION
SYSTEMS, INC. prior to the time the Employer established the Plan and for years
of service prior to the time you became a participant in the Plan. You will also
receive years of service credited under the Savings Plan for Bargaining Unit
Employees of Northern Telecom, Inc.
The Plan provides two methods for forfeiting the non-vested portion of your
account balances under the Plan. The primary method of forfeiting is the
"forfeiture break in service" rule. The secondary method of forfeiting is the
"cash out" rule. Also see Section 22 relating to loss or denial of benefits.
FORFEITURE BREAK IN SERVICE RULE. Termination of employment alone will not
result in forfeiture under the Plan unless you do not return to employment with
the Employer before incurring a "forfeiture break in service." A "forfeiture
break in service" is a period of 5 consecutive Plan Years in which you do not
work more than 500 hours in each Plan Year.
CASH-OUT RULE. The cash-out rule applies if you terminate employment, are
not vested in your Regular Matching Contributions Account balance, if any, and
you receive a total distribution of the vested portion of your account balances
before you incur a "forfeiture break in service". If you are 0 percent vested in
your Regular Matching Contributions Account under the Plan, the Plan will treat
you as having received a cash-out distribution of $0. This "distribution"
results in a forfeiture of your entire Regular Matching Contributions Account
under the Plan. Normally, this forfeiture occurs on the date you terminate
employment with the Employer. However, if you are entitled to an allocation of
Employer contributions for the Plan Year in which you terminate employment with
the Employer, this forfeiture occurs as of the first day of the next Plan Year.
If you return to employment before you incur a "forfeiture break in service",
the Plan will restore this forfeiture amount to your Regular Matching
Contributions Account.
6
<PAGE> 9
12. PARTICIPANT DIRECTION OF INVESTMENT
The Plan permits you to direct the investment of the balances of your
accounts in any one or more of the five Investment Options described below. Four
of the Investment Options are mutual funds managed by professional money
managers, and one is The Williams Companies, Inc. Common Stock Fund. Each of the
mutual funds is different and has its own specific investment objectives.
You make your initial investment allocation when you enroll in the Plan.
You may change your investment choices on a daily basis by calling the Voice
Response System at 1-800-686-9457. You must call the Voice Response System prior
to 2:00 PM (Central Time) to have your changes effective the next business day.
The Trustee will invest your Plan contributions in accordance with your
direction.
The Plan is designed to give you an opportunity to exercise control over
the investment of the assets in your Accounts and to be an "ERISA Section 404(c)
Plan." As an ERISA Section 404(c) Plan, the fiduciaries of the Plan, the
Employer, the Committee and the Trustee, may be relieved of liability for any
losses which are the direct and necessary result of any investment instructions
you may give. Except for common stock held in The Williams Companies, Inc.
Common Stock Fund, the Trustee, or, if applicable, an investment manager, will
exercise any voting, tender and similar rights with respect to the Investment
Options and the securities held and will be responsible for any such exercise.
The exercise of such rights with respect to common stock of The Williams
Companies, Inc. ("Williams common stock") held in the Common Stock Fund will be
passed through to you and other participants in accordance with your respective
beneficial interests as described following the description of that Investment
Option below.
The Committee is the fiduciary of the Plan responsible for providing the
information contained in this summary concerning Investment Options and the
exercise of control over your Accounts. The Committee has designated any member
of the Employee Benefits Department as the person to contact to request the
additional information described below to the extent the information is
available and applicable to an Investment Option:
- a description of the annual operating expenses of each Investment Option
(e.g., investment management fees, administrative fees, transaction
costs) which reduce the rate of return of an Investment Option, and the
aggregate amount of such expenses expressed as a percentage of average
net assets of the Investment Option;
- copies of any prospectuses, financial statements and reports, and of any
other materials relating to the Investment Options, to the extent such
information is provided to the Plan;
- a list of assets comprising the portfolio of each Investment Option to
the extent such assets are considered Plan assets under applicable
regulations, the value of each such asset (or the proportion of the
Investment Option which it comprises), and, with respect to each such
asset which is a fixed rate investment contract issued by a bank, savings
and loan association or insurance company, the name of the issuer, the
term and the rate of return, of the contract;
- information concerning the value of shares or units in the Investment
Options, as well as the past and current investment performance, net of
expenses, on a reasonable and consistent basis; and
- information concerning the value of shares or units of the Investment
Options held in your Accounts.
7
<PAGE> 10
Much of this information will be made available to you when it is received
by the Committee or will be contained in the periodic statement of your
Accounts. To request additional information, you should contact:
Employee Benefits Department
The Williams Companies, Inc.
Post Office Box 2400, MD 47-8
Tulsa, Oklahoma 74102
Telephone: (918) 748-7000
All of the four mutual fund descriptions have been taken from the legal
prospectus for each fund. Please refer to each fund's prospectus for more
details about each mutual fund.
The Plan's Investment Options have not always been the same and the
Committee has the authority to periodically eliminate or add Investment Options.
There are five different Investment Options in which you may invest all of your
elective deferrals, after-tax contributions and matching contributions, if any.
None of the Investment Options is insured by any agency of the Federal
government, the Employer or anyone else. There is no guarantee against
investment losses, and the value of your accounts under the Plan could decrease
as well as increase. Furthermore, the fund managers cannot guarantee that their
objectives with respect to the respective Investment Options can be met.
YOU WILL ASSUME ALL RISKS CONNECTED WITH ANY DECREASE IN THE MARKET PRICE
OR MARKET VALUE OF THE INVESTMENT OF YOUR ACCOUNT BALANCES IN THE PLAN.
A summary of quarterly performance information for all Options is posted
each quarter on employee bulletin boards at the various operating locations of
the Employer. You should review the quarterly performance information for each
Option and compare such information to that of the other Options. Continuing
review of such information and the past performance for each Option may aid you
in deciding to invest in or continue an investment in any of the Options. In
addition, a copy of the prospectuses pertaining to each of the Investment
Options can be obtained from the Administrative Committee, WilTel Savings and
Retirement Plan, The Williams Companies, Inc., Post Office Box 2400, Mail Drop
47-8, Tulsa, Oklahoma 74102. It is recommended that each Participant with an
investment in such Investment Options or who contemplates making such an
investment, review the prospectuses for the respective Investment Options. THE
PERFORMANCE HISTORY FOR EACH INVESTMENT OPTION IS PROVIDED AT APPENDIX A AT THE
END OF THIS SUMMARY.
THE CURRENT INVESTMENT OPTIONS ("OPTIONS") AVAILABLE UNDER THE PLAN ARE:
INVESTMENT OPTION A: MONEY MARKET FUND.
The American Performance U.S. Treasury Fund is the fund available under
this Option. This Fund is a stable net asset value portfolio of the American
Performance Funds, a diversified open-end management investment company. Based
on information contained in this Fund's Prospectus dated December 16, 1996, the
investment objective of this Fund is to seek current income with liquidity and
stability of principal by investing in money market instruments which are
considered by the Board of Trustees of this Fund to present minimal credit
risks. It invests exclusively in U.S. Treasury bills, notes, and other
obligations backed by the full faith and credit of the U.S. Government, some of
which may be subject to repurchase agreements. At least 65 percent of the Fund's
total assets will be invested in direct U.S. Treasury obligations, some of which
may be subject to repurchase agreements. Such obligations may include "stripped"
U.S. Treasury obligations, with are issued at a discount to their "face value,"
and may exhibit greater price volatility than ordinary debt securities because
of the manner in which their principal and interest are returned to investors.
All securities or instruments in which the Fund invests have remaining
maturities of 397 days or less, although obligations subject to repurchase
agreements and certain variable and floating rate instruments may bear longer
maturities.
8
<PAGE> 11
INVESTMENT OPTION B: INTERMEDIATE BOND FUND
The American Performance Intermediate Bond Fund is the fund available under
this Option. This Fund is a variable net asset value portfolio of the American
Performance Funds, a diversified open-end management investment company. Based
on information contained in this Fund's Prospectus dated December 16, 1996, this
Fund seeks current income consistent with the preservation of capital by
investing primarily in a diversified portfolio of intermediate term bonds and
other fixed income securities. This Fund's investments will primarily consist of
debt obligations such as bonds, notes and debentures issued by the U.S.
corporations or issued or guaranteed by the U.S. Government or its
instrumentalities or agencies, and municipal securities. This Fund may also
invest in certain foreign securities, asset-backed securities, mortgage-related
securities and zero coupon obligations. Under normal market conditions, it will
generally invest at least 65 percent of its total assets in bonds. In addition,
at least 65 percent of the value of the total assets of this Fund will be
invested in bonds with stated or remaining maturities of between three and ten
years at the time of purchase. (For this purpose, "bonds" includes any debt
instrument with a remaining maturity of one year or more.) Under normal market
conditions, this Fund intends that its portfolio will maintain an average
dollar-weighted maturity of approximately three to ten years.
INVESTMENT OPTION C: EQUITY FUND
The American Performance Equity Fund is the fund available under this
Option. This Fund is a variable net asset value portfolio of the American
Performance Funds, a diversified open-end management investment company. Based
on information contained in this Fund's Prospectus dated December 16, 1996, this
Fund seeks growth of capital and secondarily, income, by investing primarily in
a diversified portfolio of common stocks and securities convertible into common
stocks. This Fund will generally invest at least 70 percent of the value of its
total assets in common stocks and securities convertible to common stocks of
companies believed by the Investment Adviser to be characterized by sound
management and the ability to finance expected growth. It may also invest up to
30 percent of the value of its total assets in preferred stocks, corporate
bonds, notes, warrants, and cash equivalents. Equity securities such as those in
which the Equity Fund may invest are more volatile and carry more risk than some
other forms of investments, but the Equity Fund portfolio of securities will be
composed of securities believed by its Investment Adviser to be generally less
volatile and carry less risk than those generally held by an aggressive growth
fund. Depending upon the performance of this Fund's investments, the net asset
value per share may decrease instead of increase.
INVESTMENT OPTION D: AGGRESSIVE GROWTH FUND
The American Performance Aggressive Growth Fund is the fund available under
this Option. This Fund is a variable net asset value portfolio of the American
Performance Funds, a diversified open-end management investment company. Based
on information contained in this Fund's Prospectus dated December 16, 1996, this
Fund seeks long-term capital appreciation and, secondarily, income, by investing
primarily in a diversified portfolio of common stocks and securities convertible
into common stocks of small to medium-size companies. The inherent risks of
small to medium-size companies are two-fold: market risk and business risk.
Market risk refers mainly to the relatively small number of shares publicly
owned as compared to larger companies. Business risk refers to the possibility
that a company may do poorly due to competitive or financial factors. This Fund
will generally invest at least 70 percent of the value of its total assets in
common stocks and securities convertible to common stocks of companies believed
by the Investment Adviser to be characterized by sound management and the
ability to finance expected growth. It may also invest up to 30 percent of the
value of its total assets in preferred stocks, corporate bonds, notes, warrants,
and cash equivalents. The Fund will be managed in a manner that seeks to provide
roughly the same level of income as an aggressive growth fund, but less than an
income fund. Depending upon the performance of this Fund's investments, the net
asset value per share may decrease instead of increase.
INVESTMENT OPTION E: THE WILLIAMS COMPANIES, INC. COMMON STOCK FUND.
This Option consists of a fund maintained to invest exclusively in shares
of common stock of the Parent. Common stock of the Parent acquired with employee
contributions to the Plan may be purchased by the
9
<PAGE> 12
trustee of the Plan in the open market, or may be purchased directly from the
Parent. This Fund is designed for an investor who seeks an equity position in
the Parent. Although it is the stated objective of the Parent to increase
stockholder value, the stock has declined in market price from time to time.
The following is applicable to any interest you have in Williams common
stock under Investment Option E in the Plan:
VOTING OF STOCK. As the beneficial owner of Williams common stock under the
Plan, you will receive notice of the annual and any special meeting of Williams
stockholders. The notice will include proxy solicitation materials and a voting
instruction form setting out the number of shares of Williams common stock
credited to your Plan accounts. "Proxy solicitation materials" are those
required for you to vote your shares.
You may instruct the Trustee on how to vote the shares of Williams common
stock credited to your accounts by completing and returning the voting
instruction form. The Trustee must hold in confidence the voting instruction
received from you and will not divulge the information to the Employer nor any
other person or entity.
TENDER OFFERS. You will be notified by The Williams Companies, Inc., if a
tender offer has begun for Williams common stock, and you will be provided with
the same information distributed to other common stockholders of Williams. This
information will also include an explanation of how you can communicate your
instructions regarding the tender offer to the Trustee. You should evaluate any
tender offer materials you receive and determine whether you want the Trustee to
tender the Williams common stock credited to your accounts. If you decide to
tender, you should communicate your instructions to the Trustee and the Trustee
will tender the stock.
You will be able to instruct the Trustee to withdraw your shares of
Williams common stock from any tender offer if your instructions are received
before the tender offer withdrawal date. If the Trustee receives no instructions
from you, the Trustee will not tender the stock in your account. If you tender
shares of Williams common stock, the Trustee will credit any proceeds from the
acceptance of the tender offer to your accounts.
The Trustee must hold in confidence the tender offer instructions received
from you and will not divulge the information to the Employer nor any other
person or entity.
CERTAIN RESTRICTIONS ON RESALE. Shares of Williams common stock distributed
under the Plan may be resold only in compliance with the registration
requirements of the 1933 Act, and applicable state securities laws, or an
appropriate exemption therefrom.
Persons who are not "affiliates" of the Parent may resell shares of common
stock distributed pursuant to the Plan under the 1933 Act without further
registration and without limitation as to either the quantity sold or the period
during which such shares were held, provided such shares are acquired while the
Registration Statement is in effect.
This document (which also serves as the Summary Plan Description for the
Plan) may not be used to effect re-offers or resales of shares of Williams
common stock distributed pursuant to the Plan to persons who are "affiliates" of
the Parent. Persons who are "affiliates" of the Parent may resell such shares of
common stock under the 1933 Act only (a) in accordance with the provisions of
Rule 144 under the 1933 Act (exclusive of the one year holding period if such
shares were acquired while the Registration Statement is in effect) or some
other exemption from registration under the 1933 Act, or (b) pursuant to an
applicable, current and effective registration statement under the 1933 Act,
including Form S-1 or Form S-3, but not including Form S-8. An "affiliate" of
the Parent is defined in the rules and regulations under the 1933 Act as a
person who "directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with" the Parent. Such
persons generally include all officers, directors and ten percent or more
stockholders of the Parent and their affiliates.
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") provides, among other things, that any person who is a
beneficial owner of ten percent or more of an equity security of a company
registered under the Exchange Act (such as the Parent) or an officer or director
of that company,
10
<PAGE> 13
will be liable to that company for any profit realized from any purchase and
sale (or any sale and purchase) of any equity security of such company within a
period of less than six months, irrespective of the intention on the part of
such person entering into the transaction. Such persons should obtain legal
advice as to certain restrictions of Section 16(b) that may be applicable to
their participation in the Plan.
13. MAKING YOUR INVESTMENT ALLOCATIONS
You may direct the investment of your elective deferrals, after-tax
contributions and matching contributions, if any, in any one or more of the
Investment Options, provided the amount invested in each is in multiples of 1
percent. The total of your investment elections must equal 100 percent.
CHOOSING YOUR FUTURE INVESTMENT ALLOCATIONS. You choose how to invest your
contributions. You make your initial contribution investment allocation election
when you first enroll in the Plan. You may use just one Option, or you can
allocate your contributions among any of Investment Options A through E. If you
use more than one Option, you must allocate your contributions in 1 percent
increments. For example, you could choose to allocate 55 percent to American
Performance U.S. Treasury Fund, 20 percent to the American Performance
Aggressive Growth Fund and 25 percent to The Williams Companies, Inc. Common
Stock Fund.
You may change investment directions on a daily basis by calling the Voice
Response System at 1-800-686-9457. You must call prior to 2:00 PM (CT) to have
your changes effective the next business day.
CHANGING YOUR INVESTMENT ALLOCATION FOR EXISTING ACCOUNT BALANCES. You can
change the investment allocation of your existing investment account balances on
a daily basis, provided the allocation between Options is in whole multiples of
1 percent. You may change investments in any Investment Option or Options to any
other Investment Option or Options.
To change the investment allocation of your existing account balances, call
the Voice Response System at 1-800-686-9457. You must call prior to 2:00 PM (CT)
to have your changes effective the next business day.
14. TIMING OF TRANSACTIONS
When you make your investment decisions with regard to future
contributions, or when you change the investment allocation on your existing
account balances, your transaction will be processed as soon as administratively
possible. Delays, however, can occur. Neither the Plan nor the Employer
guarantees your transactions by a particular date or at a particular time.
15. WHO HOLDS YOUR INVESTMENTS
Contributions of elective deferrals and after-tax contributions are
forwarded by the Employer monthly to the Trustee pursuant to directions to
invest in the various Investment Options provided under the Plan. Income
generated from investments under a particular Option is reinvested in the same
Option.
All contributions to the Plan are placed in trust and used exclusively for
the benefit of the participants and their beneficiaries. The funds received by
the Trustees are invested as soon as practical in the Investment Options
selected by you.
You acquire an interest in a separate unsegregated fund in which your
accounts are invested. You do not, until all or part of your interest in the
Plan is distributed, acquire any direct ownership interest in the securities
held in any Investment Option. The securities held in the Plan are not
registered in your name but are registered in the name of the Trustee.
Securities purchased under the Plan are held in the name of the Trustee.
16. WITHDRAWALS DURING EMPLOYMENT
WITHDRAWALS ON ACCOUNT OF FINANCIAL HARDSHIP. During your employment with
the Employer, you may request to withdraw ALL OR ANY PORTION OF YOUR ELECTIVE
DEFERRALS held in your Deferral Contributions Account
11
<PAGE> 14
(EXCLUDING ANY EARNINGS THEREON) if you have suffered a financial hardship. A
hardship withdrawal must be made on account of any of the following:
- uninsured medical expenses incurred by you, your spouse, or any of your
dependents;
- the purchase (excluding mortgage payments) of your principal residence;
- the payment of post-secondary education tuition, for the next 12-month
period, for you or for your spouse, or for any of your dependents;
- prevention of eviction from or foreclosure on your principal residence.
The amount of your hardship withdrawal can be no more than is necessary to
meet the hardship.
To qualify for this hardship distribution, you may not make any
contributions (either salary deferral or after-tax contributions) to the Plan
for the 6-month period following the date of your hardship withdrawal, and you
must first obtain all other available withdrawals and all nontaxable loans
currently available under this Plan and all other qualified plans maintained by
the Employer or a company related to the Employer. In addition, a special
limitation may apply to your elective deferrals in the following taxable year.
REVIEW SECTIONS 20 AND 21 AND CONSULT YOUR OWN TAX ADVISER BEFORE REQUESTING ANY
WITHDRAWAL FROM THE PLAN.
You may obtain a hardship withdrawal election form by calling the Voice
Response System at 1-800-686-9457. The necessary forms will be mailed to your
home address. OTHER THAN THE HARDSHIP WITHDRAWAL RIGHT DESCRIBED IN THIS SECTION
16 AND THE POST-AGE 70 1/2 DISTRIBUTION REQUIREMENT DESCRIBED IN SECTION 17, THE
PLAN DOES NOT PERMIT YOU TO RECEIVE PAYMENT OF ANY PORTION OF YOUR ACCOUNT
BALANCES FOR ANY OTHER REASON, UNLESS YOU TERMINATE EMPLOYMENT WITH THE
EMPLOYER.
17. DISTRIBUTIONS AFTER TERMINATION OF EMPLOYMENT
After you terminate employment with the Employer, the time at which the
Plan will commence distribution to you and the form of that distribution depends
on whether your vested account balance exceeds $3,500. REVIEW SECTIONS 20 AND 21
AND CONSULT YOUR OWN TAX ADVISER BEFORE RECEIVING A DISTRIBUTION FROM THE PLAN.
IF VESTED ACCOUNT BALANCES ARE NOT MORE THAN $3,500. If your vested account
balances do not exceed $3,500, the Plan will distribute that portion to you, in
lump sum, as soon as administratively practicable after you terminate employment
with the Employer. If you already have attained normal retirement age when you
terminate employment, the Plan must make this distribution no later than the
60th day following the close of the Plan Year in which your employment
terminates, even if the normal distribution date would occur later.
IF VESTED ACCOUNT BALANCES ARE MORE THAN $3,500. If your vested account
balances exceed $3,500, the Plan will commence distribution to you at the time
you elect to commence distribution. The Plan permits you to elect distribution
on any distribution date following your separation from service.
A "distribution date" under the Plan means any business day of the Plan
Year. The Plan provides the Trustee an administratively reasonable time
following a particular distribution date to make actual distribution to a
participant.
No later than 30 days prior to your earliest possible distribution date,
the Committee will provide you a notice explaining your right to elect
distribution from the Plan and the forms necessary to make your election. If you
do not make a distribution election, the Plan will commence distribution to you
on the 60th day following the close of the Plan Year in which the later of two
events occurs: (1) your attainment of normal retirement age; or (2) your
termination of employment with the Employer. To determine whether your vested
account balances exceed $3,500, the Plan normally looks to the last valuation of
your accounts prior to the scheduled distribution date.
WITH LIMITED EXCEPTIONS, YOU MAY NOT COMMENCE DISTRIBUTION OF YOUR VESTED
ACCOUNT BALANCES LATER THAN APRIL 1 OF THE CALENDAR YEAR FOLLOWING THE CALENDAR
YEAR IN WHICH YOU ATTAIN AGE 70 1/2, EVEN IF YOU HAVE NOT TERMINATED EMPLOYMENT
WITH THE EMPLOYER. This required distribution date overrides any contrary
distribution
12
<PAGE> 15
date described in this summary. If the Employer terminates the Plan before you
receive complete distribution of your vested benefits, the Plan might make
distribution to you before you otherwise would elect distribution. Upon Plan
termination, if your vested account balances exceed $3,500, you will receive an
explanation of your distribution rights.
For purposes of making a distribution of any portion of your vested account
balances, the Plan refers to the latest valuation of your account balances. The
Plan requires valuation of the trust fund, and adjustment of participant
accounts, as of the last day of each Plan Year, and each business day of the
Plan Year. You will not receive any adjustment to your account balances for
trust fund earnings after the latest valuation date. In general, the Plan
allocates trust fund earnings, gains or losses for a valuation period on the
basis of each participant's opening account balances at the beginning of the
valuation period, less any distributions and charges to each participant's
accounts during the valuation period.
FORMS OF BENEFIT PAYMENT. The Plan permits distribution only in the form of
a lump sum payment. No other form of distribution is available.
18. DISTRIBUTION UPON DISABILITY
If you terminate employment because of disability, the Plan will pay your
vested account balances to you in lump sum at the same time as it would pay your
vested account balances for any other termination of employment. However, if
your vested account balances exceed $3,500, the disability distribution rules
are subject to any election requirements described in Section 16. In general,
disability under the Plan means because of a physical or mental disability you
are unable to perform the duties of your customary position of employment for an
indefinite period which, in the opinion of the Committee, will be of long
continued duration. The Committee also considers you disabled if you terminate
employment because of a permanent loss or loss of use of a member or function of
your body or a permanent disfigurement. The Committee may require a physical
examination in order to confirm the disability.
19. DISTRIBUTION UPON DEATH
If you die prior to receiving distribution of all of your account balances
under the Plan, the Plan will pay the balance of all of your accounts under the
Plan to your beneficiary.
The Committee will provide you with an appropriate form for naming a
beneficiary. If you are married, your spouse must consent to the designation of
any nonspouse beneficiary. Your vested account balances will be paid in a lump
sum to your designated beneficiary as soon as administratively practicable after
your death.
20. FEDERAL INCOME TAX WITHHOLDING FROM WITHDRAWALS AND DISTRIBUTIONS; ROLLOVERS
In general, all withdrawals and distributions from the Plan are subject to
federal income tax withholding unless the participant elects a direct rollover
of a qualifying rollover distribution to a qualified plan or an IRA. In general,
a qualifying rollover distribution is a withdrawal or distribution which is not
a mandatory distribution after age 70 1/2. A qualifying rollover distribution
can be a withdrawal received during employment or a distribution received after
a participant's termination of employment. A participant will be given notice
and an opportunity to elect a direct rollover before a withdrawal or
distribution which is a qualifying rollover distribution is made. A PARTICIPANT
SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE ELECTING ANY WITHDRAWAL OR
DISTRIBUTION AND BEFORE MAKING AN ELECTION CONCERNING ANY QUALIFYING ROLLOVER
DISTRIBUTION. IN ADDITION TO INCOME TAX WITHHOLDING, A WITHDRAWAL OR
DISTRIBUTION MAY BE SUBJECT TO A 10 PERCENT PENALTY IF RECEIVED BEFORE THE
PARTICIPANT ATTAINS AGE 59 1/2. THIS 10 PERCENT PENALTY IS PAYABLE WITH THE
PARTICIPANT'S INCOME TAX RETURN.
The Federal tax laws may permit a participant to report a distribution of
the taxable portion of his or her total account balances under special averaging
provisions which are applicable before the year 2000. A PARTICIPANT SHOULD
CONSULT HIS OR HER OWN TAX ADVISER.
A distribution to the surviving spouse of a deceased participant or to the
spouse or former spouse of a participant pursuant to a "qualified domestic
relations order" may be a qualifying rollover distribution with
13
<PAGE> 16
respect to such spouse. A spouse will be given notice and an opportunity to
elect a direct rollover before a distribution which is a qualifying rollover
distribution is made. A SPOUSE SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE
ELECTING ANY DISTRIBUTION AND BEFORE MAKING AN ELECTION CONCERNING A QUALIFYING
ROLLOVER DISTRIBUTION.
21. GENERAL SUMMARY OF THE FEDERAL INCOME TAX EFFECT OF THE PLAN
The Employer intends to submit the Plan to the Internal Revenue Service and
request that the Internal Revenue Service issue a determination letter stating
that the Plan continues to qualify, as to form, under section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and that the
accompanying trust is exempt from tax under section 501(a) of the Code.
The GENERAL SUMMARY of applicable federal income tax laws set forth below
is provided solely for the general information of participants. It is neither
intended nor offered as a complete summary or as a legal interpretation. The
Employer believes the following summary explains the federal income tax
treatment of the normal operation of the Plan on the date of this document. This
treatment, including the rules applicable to contributions to and distributions
from the Plan, is subject to change.
GENERAL
a. A participant's elective deferrals and employer contributions made to
the Plan are not subject to federal income tax when contributed to the Plan.
Federal income taxes on these contributions are generally deferred until the
participant or the participant's beneficiary receives a distribution from the
Plan.
A participant's total elective deferrals to the Plan (and to any other
salary deferral plan) for any calendar year are limited. In the event this
limitation is exceeded, any excess and any earnings attributable thereto will be
subject to federal income tax.
b. Additional limitations apply to the elective deferrals made to the Plan
for and by "highly compensated" participants for each year. Complex tests are
applied each year to assure that the elective deferral contribution percentages
of the group of highly compensated participants compared to such contribution
percentages of all other participants is within the limitations set forth in
section 401(k) of the Code. If these limitations are exceeded, the applicable
contribution percentage of each highly compensated participant is subject to
reduction in order to meet the appropriate test. The amount of any such
reduction of elective deferrals and any earnings attributable thereto will be
subject to federal income tax and will be distributed to the highly compensated
participant.
c. Earnings on a participant's accounts in the Plan will not be subject to
federal income tax until distributed from the Plan.
TAXATION OF DISTRIBUTIONS
a. In general, amounts distributed from the Plan to a participant or to
such participant's beneficiary, other than as a "lump sum distribution", are
treated as a taxable distribution, in accordance with the provisions of section
72 of the Code and regulations to be prescribed by the Secretary of the
Treasury. A "lump sum distribution" is generally a distribution to a participant
of the participant's entire interest in the Plan if the distribution to such
participant is made during one calendar year because of such participant's
separation from service.
For taxable years beginning before January 1, 2000, a participant who (i)
has attained at least age 59 1/2; (ii) has at least five years of Plan
participation; and (iii) does not rollover any portion of a lump sum
distribution to an individual retirement account ("IRA") or another employer
plan, may elect to have special income averaging provisions apply for
determining federal income tax on the ordinary income portion of the "total
taxable amount" (defined below) of a lump sum distribution. These special income
averaging provisions provide for determination of the applicable federal income
tax on a five-year averaging basis generally and, in the case of a participant
who had attained at least age 50 before January 1, 1986, on a ten-year averaging
basis.
14
<PAGE> 17
The "total taxable amount" is the portion of a lump sum distribution that
exceeds the "net unrealized appreciation" in the Parent's common stock included
in the lump sum distribution. "Net unrealized appreciation" is the difference of
the fair market value of the Parent's common stock on the date distributed over
the tax basis of the securities on that date. The tax basis of such securities
is to be determined in accordance with regulations prescribed by the Secretary
of the Treasury. Federal income tax on the net unrealized appreciation is
deferred until a later sale or exchange of the securities. However, a
participant may elect to have such net unrealized appreciation included in the
total taxable amount.
b. The Code permits a participant to avoid current taxation of any portion
of the taxable amount of an eligible rollover distribution by electing a direct
rollover of that portion into an IRA or, in certain cases, into another
qualified employee retirement plan that accepts direct rollover contributions.
In addition, a participant who actually receives a distribution may make a
rollover to an IRA or a qualified plan by transferring the portion of the
taxable amount being rolled over to the other plan or IRA not later than 60 days
after receipt of the amount and notifying the trustee or issuer of the other
plan or IRA that the transfer is a rollover contribution. However, if a
participant elects to receive a distribution, only eighty percent (80%) of the
taxable amount of the distribution will be paid to the participant in most cases
due to federal income tax withholding. To avoid income tax on the entire
distribution, the participant will need to use other funds so that all of the
taxable amount of the distribution is rolled over within sixty (60) days of
receipt. Federal income taxation on the amount rolled over is deferred until a
distribution is made from the plan or IRA to which the amount is rolled over.
If the participant's beneficiary is the participant's spouse, the spouse
may be eligible to roll over all or any portion of the taxable amount of a
distribution received on account of the death of the participant, subject to
essentially the same rules that would have been applicable to the participant,
as described above.
Not all distributions are eligible rollover distributions. There are
specific and technical qualifications and requirements set forth in sec.402 of
the Code that must be satisfied in order for a Plan distribution to be eligible
to be rolled over.
c. The taxable amount of any eligible rollover distribution from the Plan
to a participant or a beneficiary is subject to federal income tax withholding.
In most cases, federal law requires twenty percent (20%) of the distribution to
be withheld and some states also require withholding. In some cases the twenty
percent (20%) withholding could be insufficient, thereby requiring the timely
payment of estimated taxes or the payment of tax penalties and interest.
d. A participant or beneficiary eligible to receive a taxable distribution
from the Plan which is not an eligible rollover distribution may elect, prior to
receiving the distribution, to have no amount or an additional amount withheld
for federal income tax. If an insufficient amount is withheld, a person
receiving such a distribution may be required to make timely payment of
estimated taxes or payment of tax penalties and interest.
e. A participant who receives a distribution from the Plan prior to age
59 1/2 generally must pay an additional tax (presently 10 percent) on the
taxable portion of such distribution. The Code contains several special rules
which exclude from this 10 percent tax certain distributions made because of
death, disability, separation from service after age 55, deductible medical
expenses and other specified reasons.
f. For taxable years beginning on or after January 1, 2000, a participant
who receives in a single calendar year more than $150,000 (subject to increases
for indexing) in total distributions from qualified retirement plans including
IRAs and tax-sheltered annuities, is required to pay a 15 percent excise tax on
amounts received in excess of such amount. Certain amounts, such as voluntary
contributions, are not counted toward the applicable dollar limit. Special rules
may apply to lump sum distributions, and to benefits earned as of August 1,
1986. A special 15 percent excise tax may also apply to a portion of any
benefits remaining unpaid at the participant's death.
g. In accordance with rules prescribed by the Code, participation in a
tax-qualified retirement or savings plan, such as the Plan, may reduce or
eliminate the ability of a participant or a participant's spouse to make
15
<PAGE> 18
tax-deductible contributions to an IRA. To the extent that a participant's
ability to make tax-deductible IRA contributions is reduced, the participant may
make nondeductible IRA contributions.
The foregoing provides only a general description of the application of
federal income tax laws applicable to participation in the Plan. The foregoing
description does not address the effects of foreign, state and local tax laws.
Because of the complexities involved in the application of the tax laws to
participation in the Plan, EACH PARTICIPANT IS STRONGLY URGED TO CONSULT A TAX
ADVISER WITH RESPECT TO SUCH PARTICIPANT'S OWN SITUATION.
22. LOSS OF BENEFITS
There are no specific Plan provisions which disqualify you as a participant
or which cause you to lose plan benefits, except as provided in Sections 8, 9,
10 and 11. However, if you become disabled and do not receive compensation from
the Employer, you will not receive an allocation of the Employer's contribution
to the Plan during the period of disability. In addition, if your Plan benefits
become payable after termination of employment and the Committee is unable to
locate you at your last address of record, you may forfeit your benefits under
the Plan. Therefore, it is very important that you keep the Employer apprised of
your mailing address even after you have terminated employment. Finally, if the
Employer terminates the Plan, which it has the right to do, you would receive
benefits under the Plan based on your account balances accumulated to the date
of the termination of the Plan. Termination of the Plan could occur before you
attain your normal retirement date. If the Employer terminates the Plan, your
accounts will become 100 percent vested, if not already 100 percent vested,
unless you forfeited the nonvested portion prior to the termination date.
The termination of the Plan does not permit you to receive a distribution
from your Deferral Contributions Account unless: (1) you otherwise have the
right to a withdrawal or distribution, as described in Sections 16, 17 and 18;
or (2) the Employer does not maintain a successor defined contribution plan. If
you are able to receive a distribution only because the Employer does not
maintain a successor defined contribution plan, you must agree to take that
distribution as part of a lump sum payment of your entire account balances under
the Plan. The Trustee will transfer to the successor defined contribution plan
any portion of your interest in the Plan is unable to distribute to you.
23. SPENDTHRIFT PROVISION
Your interest in the Plan generally is not subject to sale, transfer,
assignment, pledge, garnishment or other encumbrance by you or anyone else. Your
Plan interest or right to receive withdrawals or distributions generally cannot
be taken voluntarily or involuntarily to pay debts or other obligations or
claims against you. Therefore, you may not assign your interest in the Plan to
another person or use your Plan interest as collateral for a loan from a
commercial lender. However, federal law requires that your Plan accounts may be
paid out or set aside for the benefit of certain individuals in accordance with
the requirements of certain final orders issued by a court in connection with a
divorce, marital or child support proceeding in which you may be involved. Any
amount paid or set aside would reduce the value of our Plan accounts that may be
distributed to you.
However, please note that the Plan does not have procedures in place to
allow separate accounts for any of the above mentioned parties other than an
employee or former employee. Any employee who anticipates that a court order may
be entered in connection with a divorce, marital or child-support proceeding
that will affect the employee's interest in the Plan, is advised to contact
and/or notify the Committee of the anticipated court order.
16
<PAGE> 19
24. CLAIMS PROCEDURE
When an event occurs which entitles you to a distribution of your benefits
under the Plan, the Committee will notify you regarding your distribution
rights. If you disagree with the Committee's determination of the amount of your
benefits under the Plan or with respect to any other decision the Committee may
make regarding your interest in the Plan, the Plan contains the appeal procedure
you should follow. In brief, if the Committee determines it should deny benefits
to you, you will be given a written notice that will contain:
- the specific reasons for the denial,
- reference(s) to pertinent Plan provisions upon which the denial is based,
- a description of any additional material or information necessary to
perfect the claim along with an explanation of why such material or
information is necessary, and
- notice of your right to seek a review of the denial.
If you disagree with the Committee, you (or a duly authorized
representative) will have the right to request that the Committee review the
denial, provided you file a written request for review with the Committee within
75 days after the date on which you received written notification of the denial.
You (or your duly authorized representative) may review pertinent documents. You
may submit issues and comments which you feel are pertinent to permit the
Committee to re-examine all facts and make a final determination with respect to
the denial. If you fail to appeal a denial within the 75-day period, the
Committee's determination will be final and binding.
The Committee will make a decision within 60 days after a request for
review is received unless special circumstances require additional time for
rendering a decision. In any event, the Committee will notify you of a decision
with 120 days after a request for review is received. The same procedures apply
if, after your death, your beneficiary makes a claim for benefits under the
Plan.
The Committee shall have the power, including, without limitation,
discretionary power, to make all determinations that the Plan requires for its
administration, and to construe and interpret the Plan whenever necessary to
carry out its intent and purpose and to facilitate its administration,
including, but not by way of limitation, the discretion to grant or to deny
claims for benefits under the Plan. All such rules, regulation, determinations,
constructions and interpretations made by the Committee shall be conclusive and
binding.
25. PARTICIPANT LOANS
If you are an active employee, you may request a loan from your accounts in
the Plan. To request a loan, call the Voice Response System at 1-800-686-9457.
Loan forms will be mailed to your home address. The completed forms must be
received before any processing can begin. Loans are processed on a weekly basis.
If your loan application is received by Friday, your loan check generally will
be mailed to you by the following Friday.
Your loan will be made directly from your account and interest paid by you
will be credited to your account. After your loan has been made, the portion of
your account that has not been borrowed will continue to be invested in the
investment option or options you have selected.
Loan amounts will be withdrawn proportionately from each Investment Option
in which your accounts which are being used to fund your loan are invested.
Principal and interest payments made by you on your loan generally will be
credited to the same funds (and in the same proportions) in which your
contributions are invested at the time interest or principal payment is made.
The amount of your loan may not exceed the lesser of:
1) $50,000, reduced by the highest outstanding loan balance during the
past 12 months, or
2) 50 percent of the vested portion of your accounts (determined as of
the most currently available valuation).
17
<PAGE> 20
The minimum amount you may borrow is $1,000, and you are permitted only one
outstanding loan at a time.
Loans must be repaid over a term of no less than one year and no more than
five years, unless the loan is for your primary residence. If the funds borrowed
are to purchase a home that is your primary residence, the term may be extended
up to 25 years. Any loans will be repaid by withholding from your paycheck over
the term of the loan. In the event of a termination of employment, any loan to
you will become immediately due. If your loan is not repaid in full, it will be
treated as a taxable distribution to you.
All loans will bear interest for the term of the loan at an interest rate
established by the Committee from time to time. The interest rate on a loan is
set at the time the loan is initiated.
The provisions of the Plan loan program are subject to periodic change. You
should check with the Employer for information regarding the loan policy at the
time you are considering a request for a loan. You may be required to pay a loan
origination fee and other charges associated with the loan.
26. TECHNICAL INFORMATION
The Plan is a profit-sharing plan. WCS Communications Systems, Inc. is the
Plan Sponsor until on or about August 1, 1997, when WilTel Communications, LLC
will become the Plan Sponsor. For identification purposes, the Plan Sponsor has
assigned to the Plan number 008. The Plan Year is the period on which the Plan
maintains its records and is the twelve consecutive month period ending every
December 31. The current Plan Sponsor's employer identification number is
47-6043412 and its address is:
WCS Communications Systems, Inc.
c/o The Williams Companies, Inc.
Post Office Box 2400, Drop 47-8
Tulsa, Oklahoma 74102
You will be provided revised technical information when the change of the
Plan Sponsor is completed.
Certain types of retirement plans that are not fully funded are required to
be insured against under funding. Because the Plan is fully funded, the Plan is
not subject to plan termination insurance with the Pension Benefit Guaranty
Corporation.
27. PLAN AMENDMENT OR TERMINATION
While the Plan is intended to be permanent, the Employer, by action of its
Board of Directors, may amend or terminate the Plan, in whole or in part, at any
time. However, except as required by law, the value of your accounts on any date
of amendment or termination will not be reduced by any such amendment or
termination. In the event of Plan termination, your accounts will become 100
percent vested and non-forfeitable.
28. RIGHT TO EMPLOYMENT
The Employer reserves the right to discharge any employee and to pay such
employee only the benefits to which he/she is entitled under the terms of the
Plan. The Plan is not an employment contract and does not give any employee any
right to be retained in the service of the Employer.
29. PARTICIPANT'S RIGHT UNDER ERISA
As a participant in the Plan, you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 ("ERISA").
ERISA provides that all Plan participants are entitled to:
(a) Examine, without charge, at the Plan Administrator's office other
specified locations (such as work sites), all Plan documents, including
insurance contracts and copies of all documents filed by the Plan with the
U.S. Department of Labor, such as detailed annual reports and plan
descriptions.
18
<PAGE> 21
(b) Obtain copies of all Plan documents and other Plan information
upon written request to the Plan Administrator. The Plan Administrator may
make a reasonable charge for the copies.
(c) Receive a summary of the Plan's annual financial report. ERISA
requires the Plan Administrator to furnish each participant with a copy of
this summary annual report.
(d) Obtain a statement telling you that you have a right to receive a
retirement benefit at the normal retirement age under the Plan and what
your benefit could be at normal retirement age if you stop working under
the Plan now. If you do not have a right to a retirement benefit, the
statement will advise you of the number of additional years you must work
to receive a retirement benefit. You must request this statement in
writing. The law does not require the Plan Administrator to give this
statement more than once a year. The Plan must provide the statement free
of charge.
In addition to creating rights for Plan participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee benefit
plan. The people who operate the Plan called "fiduciaries" of the Plan, have a
duty to do so prudently and in the interest of you and other Plan participants
and beneficiaries. No one, including your Employer, your union or any other
person may fire you or otherwise discriminate against you in any way to prevent
you from obtaining a retirement benefit or from exercising your rights under
ERISA.
If your claim for a retirement benefit is denied in whole or in part, you
must receive a written explanation of the reason for the denial. You have the
right to have the Plan review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive the
materials within 30 days, you may file suit in a Federal court. In such a case,
the court may require the Plan Administrator to provide the materials and pay
you up to $100 a day until you receive the materials, unless the materials were
not sent because of reasons beyond the control of the Plan Administrator. If you
have a claim for benefits which is denied or ignored, in whole or in part, you
may file suit in a state or Federal court. If it should happen that Plan
fiduciaries misuse the Plan's money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a Federal court. The court will decide who should
pay court costs and legal fees. If you are successful, the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees, for example, if it finds your claim is
frivolous.
If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
19
<PAGE> 22
APPENDIX A
SUMMARY PLAN DESCRIPTION FOR
WILTEL SAVINGS AND RETIREMENT PLAN
PERFORMANCE HISTORY OF INVESTMENT OPTIONS
In considering the investment value of the available investment Options
under the Plan, the following historical performance information has been
prepared for all the Options A through E. It should be emphasized, however, that
historical performance may not be indicative of future performance.
Option A. Three-year investment results for the American Performance U.S.
Treasury Fund are as follows:
<TABLE>
<CAPTION>
YEAR ENDED TOTAL
DECEMBER 31, RETURN
------------ ------------
<S> <C>
1996.......................................... 4.59%
1995.......................................... 5.08%
1994.......................................... 3.48%
</TABLE>
Option B. Three-year investment results for the American Performance
Intermediate Bond Fund are as follows:
<TABLE>
<CAPTION>
YEAR ENDED TOTAL
DECEMBER 31, RETURN
------------ ------------
<S> <C>
1996.......................................... 3.02%
1995.......................................... 12.24%
1994.......................................... (2.47)%
</TABLE>
Option C. Three-year investment results for the American Performance Equity
Fund are as follows:
<TABLE>
<CAPTION>
YEAR ENDED TOTAL
DECEMBER 31, RETURN
------------ ------------
<S> <C>
1996.......................................... 25.91%
1995.......................................... 35.26%
1994.......................................... (1.21)%
</TABLE>
Option D. Three-year investment results for the American Performance
Aggressive Growth Fund are as follows:
<TABLE>
<CAPTION>
YEAR ENDED TOTAL
DECEMBER 31, RETURN
------------ ------------
<S> <C>
1996.......................................... 13.52%
1995.......................................... 23.23%
1994.......................................... (4.53)%
</TABLE>
Option E. The common stock of the Parent is traded on the New York Stock
Exchange under the symbol "WMB". Three-year investment results for the common
stock of the Parent are as follows:
<TABLE>
<CAPTION>
YEAR ENDED TOTAL
DECEMBER 31, RETURN
------------ ------------
<S> <C>
1996.......................................... 31.79%
1995.......................................... 79.8%
1994.......................................... 6.22%
</TABLE>
THE HISTORIC TRADING PRICE OF THE COMMON STOCK OF PARENT IS NOT NECESSARILY
INDICATIVE OF THE FUTURE PERFORMANCE OR TRADING PRICE OF THE COMMON STOCK.
The foregoing performance information for Options A through D has been
extracted from the above-referenced prospectuses or from advertised yields and
total returns for such Options, and, in each case, is qualified in its entirety
by reference to such sources.
A-1
