UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Williams Communications Group, Inc.
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(Name of Issuer)
Class A Common Stock, par value $0.01 per share
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(Title of Class of Securities)
969455104
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(CUSIP Number)
Wayne A. Wirtz
SBC Communications Inc.
175 East Houston
San Antonio, TX 78205
(210) 351-3736
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(Name, Address, and Telephone Number of Persons
Authorized to Receive Notices and Communications)
October 6, 1999
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
(Page 1 of 9 Pages)
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CUSIP No. 969455104 13D Page 2 of 9 Pages
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1) NAME OF REPORTING PERSON SBC Communications Inc.
I.D. # 43-1301883
- ------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- ------------------------------------------------------------
3) SEC USE ONLY
- ------------------------------------------------------------
4) SOURCE OF FUNDS: WC
- ------------------------------------------------------------
5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- ------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- ------------------------------------------------------------
NUMBER OF 7) SOLE VOTING POWER 20,226,812
SHARES ----------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER 0
OWNED BY ----------------------------------------------
EACH 9) SOLE DISPOSITIVE POWER 20,226,812
REPORTING ----------------------------------------------
PERSON WITH 10) SHARED DISPOSITIVE POWER 0
- ------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED 20,226,812
BY EACH REPORTING PERSON
- ------------------------------------------------------------
12) CHECK IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
- ------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 29.7%
- ------------------------------------------------------------
14) TYPE OF REPORTING PERSON: CO
- ------------------------------------------------------------
<PAGE>
Page 3 of 9 Pages
Item 1. Security and Issuer
- ------- -------------------
Class A Common Stock, par value $0.01 per share, of Williams
Communications Group, Inc., One Williams Center, Tulsa, Oklahoma
74172.
Item 2. Identity and Background
- ------- -----------------------
(a) and (b) SBC Communications Inc. ("SBC") is a Delaware
corporation, with its principal office and principal place of
business at 175 E. Houston, San Antonio, Texas 78205-2233. Other
than executive officers and directors, there are no persons or
corporations controlling or ultimately in control of SBC.
The name of each executive officer and director of SBC is set
forth in Exhibit 1 hereto and incorporated herein by reference.
The business address of all of the individuals listed on
Exhibit 1 is c/o the Vice President and Secretary, SBC
Communications Inc., 175 E. Houston, 11th Floor, San Antonio,
Texas 78205.
(c) The Reporting Person is a holding company whose subsidiaries
and affiliates provide landline and wireless telecommunications
services and equipment, directory advertising, publishing
services, and Internet access services.
The present principal occupation of each executive officer and
director of SBC is set forth in Exhibit 1 hereto and incorporated
herein by reference.
(d) During the last five years, neither SBC, nor, to the best of
its knowledge, any of its directors or executive officers has
been convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors.)
(e) During the last five years, neither SBC nor, to the best of
its knowledge, any of its executive officers or directors has
been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction resulting in a
judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violation with respect to
such laws, and which judgment, decree or final order was not
subsequently vacated.
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Page 4 of 9 Pages
Each executive officer and director of SBC is a citizen of the
United States except for director Carlos Slim Helu, who is a
citizen of Mexico.
(g) Delaware.
Item 3. Source and Amount of Funds or Other Consideration.
- ------- --------------------------------------------------
The Reporting Person used $438,517,284 of its working capital to
purchase 20,226,812 shares of Class A Common Stock of Williams
Communications Group, Inc.
Item 4. Purpose of Transaction.
- ------- -----------------------
On February 8, 1999, the Reporting Person and Williams
Communications, Inc. entered into a long-term strategic alliance.
The Reporting Person received the right to acquire shares of the
Issuer's Class A Common Stock in connection with the Issuer's
initial public offering pursuant to a Securities Purchase
Agreement, dated February 8, 1999, among the Issuer, The Williams
Companies, Inc. and the Reporting Person ("Securities Purchase
Agreement"), which was subsequently modified by a Securities
Purchase Agreement Amendment and Addendum, dated as of September
24, 1999, among the Issuer, The Williams Companies, Inc. and the
Reporting Person (the "Addendum").
On October 6, 1999, the Issuer consummated its initial
public offering, and the Reporting Person purchased from the
Issuer 19,603,321 shares of the Issuer's Class A Common Stock at
a price of $21.68 per share. On October 7, 1999, the Issuer sold
additional shares of Class A Common Stock to third parties, and
the Reporting Person exercised pre-emptive rights pursuant to the
Securities Purchase Agreement and the Addendum to purchase from
the Issuer 623,491 additional shares of the Issuer's Class A
Common Stock at a price of $21.68 per share.
The Reporting Person has rights in certain circumstances to
increase its interest to up to 10% of the Issuer's outstanding
equity. The Reporting Person has certain additional rights to
maintain its equity interest in the Issuer's common stock, which
rights would be forfeited if the rights were not exercised more
than once. Following a second failure to exercise rights to
maintain its equity interest in the Issuer's common stock, the
Reporting Person has rights to maintain its newly diluted
position so long as the Reporting Person maintains at least a 3%
interest in the Issuer's common stock.
<PAGE>
Page 5 of 9 Pages
The Reporting Person has agreed not to acquire more than 10%
of the Issuer's common stock until at least 2009. The Reporting
Person has agreed not to transfer to anyone except affiliates any
of its shares of the Issuer's common stock for a period of three
and a half years, but this transfer restriction provision will be
terminated if the Issuer has a change of control. The Reporting
Person has registration rights in connection with its holdings.
Once the Reporting Person receives regulatory approval to enter
the long-distance business within its local service territory,
the Reporting Person will have the right to appoint a person to
the Issuer's board of directors, provided that the Reporting
Person has an equity interest of more than 5% in the Issuer's
common stock.
The Issuer has a call option to purchase all of the shares
of the common stock acquired by the Reporting Person under the
Securities Purchase Agreement and the Addendum in the event of
the termination of certain agreements between the Issuer and the
Reporting Person. The Williams Companies, Inc., so long as it
has a 50% interest in the Issuer's common stock, has a right of
first purchase with respect to any shares of the Issuer's common
stock that the Reporting Person should decide to offer. The
Issuer also has a right of first purchase with respect to any
shares of common stock not purchased by The Williams Companies,
Inc.
Upon the termination of the strategic alliance between the
Reporting Person and the Issuer, the Reporting Person has the
right in certain circumstances to purchase certain voice or data
switching assets (including transport facilities) of which the
Reporting Person's usage represents 75% or more of the total
usage of these assets. In addition, if the strategic alliance is
terminated because of the Issuer's actions, the Issuer could be
required to pay the Reporting Person's transition costs of up to
$200 million.
The foregoing description is qualified in its entirety by
the Agreement, the Addendum, and the Master Alliance Agreement,
dated February 8, 1999, between the Reporting Person and Williams
Communications, Inc., which are referenced in Item 7 of this
Schedule 13D and incorporated in this Item 4 by reference.
<PAGE>
Page 6 of 9 Pages
Item 5. Interest in Securities of the Issuer.
- ------- -------------------------------------
(a) As of the date hereof, the Reporting Person could be deemed
to own beneficially an aggregate of 20,226,812 shares of Class A
Common Stock of the Issuer (approximately 29.7% of the
outstanding shares of Class A Common Stock of the Issuer).
(b) The Reporting Person has sole power to vote and dispose the
20,226,812 shares of Class A Common Stock of the Issuer that the
Reporting Person owns.
(c) See Item 4.
(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or
- ------- Relationships with Respect to Securities of the Issuer
------------------------------------------------------
See Item 4.
Item 7. Material to be Filed as Exhibits.
- ------- ---------------------------------
(a) Master Alliance Agreement, dated February 8, 1999, between
the Reporting Person and Williams Communications, Inc.
(incorporated by reference to Exhibit 10.10 to the Issuer's
Registration Statement on Form S-1, No. 333-76007).
(b) Securities Purchase Agreement, dated February 8, 1999,
between the Reporting Person and the Issuer (incorporated by
reference to Exhibit 10.12 to the Issuer's Registration Statement
on Form S-1, No. 333-76007).
(c) Securities Purchase Agreement Amendment and Addendum, dated
as of September 24, 1999, among the Issuer, The Williams
Companies, Inc. and the Reporting Person (incorporated by
reference to Exhibit 10.64 to the Issuer's Registration Statement
on Form S-1, No. 333-76007).
(d) Directors and Executive Officers of SBC Communications Inc.
Exhibit 1 hereto.
<PAGE>
Page 7 of 9 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: October 15, 1999
SBC COMMUNICATIONS INC.
By: /s/ James S. Kahan
James S. Kahan
Senior Vice President -
Corporate Development
<PAGE>
Page 8 of 9 Pages
EXHIBIT 1
DIRECTORS AND EXECUTIVE OFFICERS OF
SBC COMMUNICATIONS INC. AS OF OCTOBER 6, 1999
The name, present principal occupation or employment, and the
name of any corporation or other organization in which such employment
is conducted, of each director, advisory director and executive
officer of SBC Communications Inc. ("SBC"), is set forth below. Unless
otherwise indicated, each occupation set forth opposite an executive
officer's name refers to employment with SBC.
Name Present Principal Occupation or Employment
Directors
Edward E. Whitacre, Jr. Chairman of the Board and Chief Executive
Officer
Royce S. Caldwell President - SBC Operations
Clarence C. Barksdale Vice Chairman, Board of Trustees,
Washington University
James E. Barnes Chairman of the Board, President and Chief
Executive Officer, MAPCO Inc., Retired
August A. Busch, III Chairman of the Board and President,
Anheuser-Busch Companies, Inc.
Ruben R. Cardenas Partner, Cardenas, Whitis & Stephen, L.L.P.
William P. Clark Chief Executive Officer, Clark Company
Martin K. Eby, Jr. Chairman of the Board and Chief Executive
Officer, The Eby Corporation
Herman E. Gallegos Independent Management Consultant
Jess T. Hay Chairman, HCB Enterprises Inc; Chairman of
the Texas Foundation for Higher Education
Bobby R. Inman United States Navy, Retired
Charles F. Knight Chairman and Chief Executive Officer,
Emerson Electric Co.
Mary S. Metz President, S.H. Cowell Foundation
Toni Rembe Partner, Pillsbury Madison & Sutro LLP
S. Donley Ritchey Managing Partner, Alpine Partners
Joyce M. Roche Independent Consultant
Richard M. Rosenberg Chairman and Chief Executive Officer
(Retired), BankAmerica Corporation
Carlos Slim Helu Chairman of the Board, Telefonos de Mexico,
S.A. de C.V.
Patricia P. Upton President and Chief Executive Officer,
Aromatique, Inc.
Advisory Director
Gilbert F. Amelio President and Founder, AmTech, LLC
<PAGE>
Page 9 of 9 Pages
Executive Officers
Edward E. Whitacre, Jr. Chairman of the Board, President and Chief
Executive Officer
Royce S. Caldwell President - SBC Operations
Cassandra C. Carr Senior Executive Vice President -
External Affairs
J. Cliff Eason President - SBC International
James D. Ellis Senior Executive Vice President and General
Counsel
Charles E. Foster Group President - SBC
Karen Jennings Senior Vice President - Human Resources
James S. Kahan Senior Vice President - Corporate
Development
Donald E. Kiernan Senior Vice President, Treasurer and Chief
Financial Officer
Stanley T. Sigman President and Chief Executive Officer - SBC
Wireless Inc.
