<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-35097
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 15, 1997)
$425,000,000
WILLIAMS HOLDINGS OF DELAWARE, INC.
$175,000,000 6.125% Notes due 2003
$250,000,000 6.500% Notes due 2008
------------------
The 2003 Notes will mature on December 1, 2003 and the 2008 Notes will
mature on December 1, 2008. Interest on the Notes is payable semiannually on
June 1 and December 1, beginning June 1, 1999. The 2003 Notes are not
redeemable. Williams Holdings may redeem some or all of the 2008 Notes at any
time. The redemption price is described under the heading "Description of
Notes -- Optional Redemption" on page S-3 of this prospectus supplement. There
is no sinking fund.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
------------------
<TABLE>
<CAPTION>
PUBLIC OFFERING PROCEEDS TO
PRICE UNDERWRITING DISCOUNTS WILLIAMS HOLDINGS
--------------- ---------------------- -----------------
<S> <C> <C> <C>
Per 2003 Note 99.832% .600% 99.232%
Total $174,706,000 $1,050,000 $173,656,000
Per 2008 Note 99.539% .650% 98.889%
Total $248,847,500 $1,625,000 $247,222,500
Combined Total (before expenses) $423,553,500 $2,675,000 $420,878,500
</TABLE>
Interest on the Notes will accrue from December 8, 1998 to date of
delivery.
------------------
The underwriters are offering the Notes subject to various conditions. The
underwriters expect to deliver the Notes to purchasers on or about December 8,
1998.
------------------
Joint Book-Running Managers
CHASE SECURITIES INC. SALOMON SMITH BARNEY
NATIONSBANC MONTGOMERY SECURITIES LLC
ABN AMRO INCORPORATED
CIBC OPPENHEIMER
CREDIT LYONNAIS SECURITIES (USA) INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
NESBITT BURNS SECURITIES INC.
December 3, 1998
<PAGE> 2
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION PROVIDED BY THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS ACCURATE AS OF ANY DATE
OTHER THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds............................................. S-3
Description of Notes........................................ S-3
Underwriting................................................ S-7
Experts..................................................... S-8
Legal Matters............................................... S-8
Where You Can Find More Information......................... S-9
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
Reports to Holders of Debt Securities....................... 2
The Company................................................. 3
Use of Proceeds............................................. 3
Ratio of Earnings to Fixed Charges.......................... 3
Selected Financial Data..................................... 4
Description of Debt Securities.............................. 6
Limitations on Issuance of Bearer Debt Securities........... 12
Description of Preferred Stock.............................. 13
Plan of Distribution........................................ 15
Experts..................................................... 16
Legal Matters............................................... 17
</TABLE>
Williams Holdings' principal executive offices are located at One Williams
Center, Tulsa, Oklahoma 74172 and its telephone number is (918) 573-2000.
S-2
<PAGE> 3
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Notes
are estimated at $420,378,500 after the deduction of the underwriting discount
and of the estimated expenses payable by the Company. The Company intends to use
the net proceeds of this offering to repay outstanding debt and for general
corporate purposes. Approximately $300,000,000 of the net proceeds of this
offering will be used to repay debt incurred by Williams Holdings pursuant to a
certain Credit Agreement with a syndicate of banks, including affiliates of some
of the Underwriters (see "Underwriting"), which debt bears interest at prime and
matures on July 31, 2002.
DESCRIPTION OF NOTES
The Notes being offered by this Prospectus Supplement are referred to as
the "Notes" in this Prospectus Supplement and as the "Debt Securities" in the
Prospectus. This Prospectus Supplement supplements the description of the
general terms and provisions of the Debt Securities set forth in the Prospectus.
To the extent that this Prospectus Supplement is inconsistent with such
description in the Prospectus, this Prospectus Supplement replaces such
description. For a description of the general terms and provisions of the Notes,
you should consult the Prospectus. You should also consult the Indenture for
provisions which qualify the following summary.
GENERAL
Williams Holdings will limit the 2003 Notes to $175,000,000 in aggregate
principal amount and the 2008 Notes to $250,000,000 in aggregate principal
amount. Williams Holdings will issue the Notes in denominations of $1,000 and
integral multiples of $1,000. The Notes will bear interest from December 8, 1998
at the annual rate set forth on the cover page of this Prospectus Supplement.
The 2003 Notes will mature on December 1, 2003 and the 2008 Notes will mature on
December 1, 2008. Williams Holdings will pay interest on June 1 of each year to
holders of record of the Notes on the preceding May 15 and on December 1 of each
year to holders of record of the Notes on the preceding November 15. Williams
Holdings will issue the Notes in book-entry form. You should refer to
"Description of Debt Securities -- Registered Global Securities" in the
Prospectus.
The Notes will not be subject to a sinking fund.
REDEMPTION
The 2003 Notes are not redeemable.
Williams Holdings may, at its option at any time, redeem the 2008 Notes as
a whole or in part. The redemption price will be equal to the greater of
- 100% of the principal amount of such 2008 Notes plus accrued interest on
such 2008 Notes to the date of redemption, and
- the sum of (a) the sum of the present values of the remaining scheduled
payments of principal and interest on the 2008 Notes to be redeemed
discounted to the redemption date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate as
defined below, plus (b) 15 basis points, plus (c) accrued interest on the
2008 Notes to be redeemed to the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security which
an Independent Investment Banker selects based on the fact that
- such security has a maturity comparable to the remaining term of the
2008 Notes to be redeemed and
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<PAGE> 4
- at the time of selection and according to customary financial
practice, one would utilize such a security in pricing new issues of
corporate debt securities of comparable maturity to the remaining
term of the 2008 Notes to be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date,
- the average of the bid and asked prices for the Comparable Treasury
Issue (written as a percentage of the principal amount of the
Comparable Treasury Issue) on the third business day before such
redemption date and as set forth in the daily statistical release
published by the Federal Reserve Bank of New York, called the
"Composite 3:30 p.m. Quotations for U.S. Government Securities", or
- if such release is not published or does not contain such prices on
the third business day before such redemption date,
(A) the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations, or
(B) if Williams Holdings obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by Williams Holdings.
"Reference Treasury Dealer" means each of Chase Securities Inc. and Salomon
Smith Barney Inc. and the successors of each of them and, at the option of
Williams Holdings, additional Primary Treasury Dealers. If any of these dealers
ceases to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), Williams Holdings will substitute for such former
dealer another Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means the average which Williams
Holdings will determine of the bid and ask prices for the Comparable Treasury
Issue (written as a percentage of the principal amount of the Comparable
Treasury Issue) which a Reference Treasury Dealer has quoted to Williams
Holdings at 5:00 p.m. on the third business day before such redemption date.
Williams Holdings will determine such an average individually for each Reference
Treasury Dealer and for each redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue. The Treasury Rate assumes a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
Williams Holdings will mail notice of any redemption at least 30 days but
not more than 60 days before the redemption date to each holder of 2008 Notes to
be redeemed.
Unless Williams Holdings defaults in payment of the redemption price, on
and after the redemption date interest will stop accruing on the 2008 Notes or
the portions of the 2008 Notes called for redemption.
BOOK-ENTRY SYSTEMS
Williams Holdings will issue the Notes in fully registered form in the name
of Cede & Co., as nominee of The Depository Trust Company ("DTC"). Williams
Holdings will issue one or more fully registered certificates as Global
Securities for the Notes in the aggregate principal amount of the Notes.
Williams Holdings will deposit such Global Securities with DTC.
The Global Securities are not transferable, except that
- DTC may transfer the Global Securities to a person named by DTC,
- a person named by DTC may transfer the Global Securities to DTC, or
S-4
<PAGE> 5
- another person named by DTC may transfer the Global Securities to a
successor of DTC or a person named by such successor of DTC.
DTC has advised the Company and the Underwriters of the following:
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" under the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities. Settlement takes place through
electronic computerized book-entry changes in DTC Participants' accounts.
This eliminates the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. A number
of its Direct Participants and the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. own DTC. Access to the DTC system is also available to
others, such as securities brokers and dealers, banks, and trust companies
that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
Purchases of Notes under the DTC system must be made by or through Direct
Participants. Direct Participants will receive a credit for the Notes on DTC's
records. The ownership of interest of each actual purchaser of Notes
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase. DTC, however, expects that Beneficial Owners will
receive written confirmation providing details of the transaction, as well as a
periodic statement of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Entries made on
the books of Participants acting on behalf of Beneficial Owners will effect the
transfer of ownership interests in the Notes. Beneficial Owners will not receive
certificates representing their ownership interests in the Notes, except in the
event that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of Notes with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Notes; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Notes are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them. Such conveyances and communications are subject to any
statutory or regulatory requirements as may be in effect from time to time.
Williams Holdings will send redemption notices to DTC. If Williams Holdings
is redeeming less than all of the Global Securities within an issue, DTC's
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Global
Securities. Under its usual procedures DTC mails an omnibus proxy to the issuer
as soon as possible after the record date. The omnibus proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose accounts
the Securities are credited on the record date (identified in the listing
attached to the omnibus proxy).
Williams Holdings will make principal and interest payments on the Global
Securities to DTC. Williams Holdings expects that DTC, upon receipt of any
payment of principal or interest in respect of a Global Security, will credit
immediately Participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of such Global
Security as shown on DTC's records.
S-5
<PAGE> 6
Williams Holdings also expects that standing instructions and customary
practices will govern payments by Participants to Beneficial Owners (as is the
case with securities held for the accounts of customers in bearer form or
registered in "street name"). Williams Holdings expects further that such
payments will be the responsibility of such Participant and not of DTC, Williams
Holdings or the Trustee, subject to any statutory or regulatory requirements as
may be in effect from time to time.
DTC may discontinue providing its service as securities depositary with
respect to the Notes at any time by giving reasonable notice to Williams
Holdings or the Trustee. In addition, Williams Holdings may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor securities depositary). Under such circumstances, if Williams Holdings
does not obtain a successor securities depositary, Williams Holdings must print
and deliver Note certificates in fully registered form to Beneficial Owners of
the Global Securities representing such Notes.
Williams Holdings has obtained the information in this section concerning
DTC and DTC's book-entry system from sources that Williams Holdings believes to
be reliable (including DTC), but Williams Holdings takes no responsibility for
the accuracy of this information.
Neither Williams Holdings, the Trustee nor the Underwriters will have any
responsibility or obligation to Participants, or the persons for whom they act
as nominees, with respect to the accuracy of the records of DTC, its nominee or
any Participant with respect to any ownership interest in the Notes, or payments
to, or the providing of notice to Participants or Beneficial Owners.
The Notes will trade in DTC's Same-Day Funds Settlement System. Secondary
market trading activity in the Notes will, therefore, settle in immediately
available funds. Williams Holdings will make all applicable payments of
principal and interest on the Notes issued as Global Securities in immediately
available funds.
For other terms of the Notes, you should refer to the section "Description
of Debt Securities" in the accompanying Prospectus.
DEFEASANCE
The Notes will be subject to defeasance and discharge and to defeasance of
certain obligations as described under "Description of Securities -- Defeasance"
in the Prospectus.
S-6
<PAGE> 7
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement"), dated December 3, 1998 among Williams Holdings
and the several Underwriters named below (the "Underwriters"), Williams Holdings
has agreed to sell to the Underwriters and the Underwriters have severally
agreed to purchase from Williams Holdings, the following respective principal
amounts of Notes:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITER OF 2003 NOTES OF 2008 NOTES
----------- ---------------- ----------------
<S> <C> <C>
Chase Securities Inc. ................................ $ 61,250,000 $ 87,500,000
Salomon Smith Barney Inc. ............................ 61,250,000 87,500,000
NationsBanc Montgomery Securities LLC................. 35,000,000 50,000,000
ABN AMRO Incorporated................................. 3,500,000 5,000,000
CIBC Oppenheimer Corp. ............................... 3,500,000 5,000,000
Credit Lyonnais Securities (USA) Inc. ................ 3,500,000 5,000,000
First Chicago Capital Markets, Inc. .................. 3,500,000 5,000,000
Nesbitt Burns Securities Inc. ........................ 3,500,000 5,000,000
------------ ------------
Total....................................... $175,000,000 $250,000,000
============ ============
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Notes offered by
this Prospectus Supplement if any of the Notes are purchased.
The Underwriters have advised Williams Holdings that the Underwriters
propose to offer the Notes to the public initially at the offering price to the
public set forth on the cover page of this Prospectus Supplement, and to certain
dealers initially at such price less a discount not more than .35% with respect
to the 2003 Notes and .40% with respect to the 2008 Notes. The Underwriters may
allow, and such dealers may reallow, a concession to certain other dealers not
more than .25% of the principal amount. After the public offering, the
Underwriters may change the public offering price and such concessions.
The Underwriters and their affiliates have in the past and may in the
future provide investment banking, general financing and banking or other
services to Williams Holdings and its affiliates. In particular, affiliates of
Chase Securities Inc., Salomon Smith Barney Inc., NationsBanc Montgomery
Securities LLC, CIBC Oppenheimer Corp., Credit Lyonnais Securities (USA) Inc.,
First Chicago Capital Markets, Inc., and Nesbitt Burns Securities Inc. are
lenders under the Credit Agreement and will receive a portion of the amount
repaid under the Credit Agreement with the net proceeds of the offering. See
"Use of Proceeds." Because more than 10% of the net proceeds of the offering are
intended to be paid to affiliates of the Underwriters, the offering is being
conducted in accordance with Rule 2710(c)(8) of the Conduct Rules of the
National Association of Securities Dealers, Inc.
Williams Holdings has agreed to indemnify the Underwriters against certain
civil liabilities, including liabilities under the Securities Act of 1933, as
amended, and to contribute to payments which the Underwriters might be required
to make in respect of such civil liabilities.
In connection with the offering and sale of the Notes, the Underwriters may
engage in overallotment, stabilizing transactions and syndicate covering
transactions in accordance with Regulation M under the Exchange Act.
Overallotment involves sales in excess of the offering size, which creates a
short position for the Underwriters. Stabilizing transactions permit bids to
purchase the Notes in the open market for the purpose of pegging, fixing or
maintaining the price of the Notes. Syndicate covering transactions involve
purchases of the Notes in the open market after the distribution has been
completed in order to cover short positions. Such stabilizing transactions and
syndicate covering transactions may cause the price of the Notes to be higher
than it would otherwise be in the absence of such transactions. Such activities,
if commenced, may be discontinued at any time.
The Notes are a new series of securities with no established trading
market. The Underwriters have advised Williams Holdings that they intend to make
a market in the Notes, but are under no obligation to do
S-7
<PAGE> 8
so and such market making may be terminated at any time without notice.
Therefore, Williams Holdings cannot give any assurance as to the liquidity of,
or the trading market for, the Notes.
EXPERTS
The consolidated financial statements and schedule of Williams Holdings
appearing in the Williams Holdings' Current Report on Form 8-K dated May 18,
1998, for the three years ended December 31, 1997, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference, which is based in part on the
report of Deloitte & Touche LLP, independent auditors on the consolidated
financial statements of MAPCO Inc. for the three year period ended December 31,
1997 appearing in the Current Report on Form 8-K of Williams Holdings dated May
18, 1998 and incorporated in this Prospectus Supplement by reference (which
report expresses an unqualified opinion and includes explanatory paragraphs
relating to certain litigation to which MAPCO Inc. is a defendant and the change
in its method of accounting for business process reengineering activities to
conform to the consensus reached by the Emerging Issues Task Force in Issue No.
97-13). Such consolidated financial statements and schedule are incorporated
herein by reference in reliance upon such reports given upon the authority of
such firms as experts in accounting and auditing.
The consolidated financial statements and schedules of Williams Holdings
included in or incorporated by reference in any documents filed pursuant to
Section 13, 14 or 15(d) of the Exchange Act after the date of this Prospectus
Supplement and prior to the termination of the offering will be so included or
incorporated by reference in reliance upon the reports of independent auditors
pertaining to such financial statements (to the extent covered by consents filed
with the Securities and Exchange Commission) given upon the authority of such
independent auditors as experts in accounting and auditing.
LEGAL MATTERS
William G. von Glahn, Senior Vice President and General Counsel of Williams
Holdings, will pass on certain legal matters for Williams Holdings in connection
with the Notes. Davis Polk & Wardwell, New York, New York will pass on certain
legal matters for the Underwriters. Mr. von Glahn beneficially owns 124,416
shares of common stock of The Williams Companies, Inc. ("Williams"), the parent
of Williams Holdings, and also has exercisable options to purchase an additional
80,504 shares of Williams' common stock. Pursuant to its By-laws and an
indemnity agreement, Williams and Williams Holdings are required to indemnify
Mr. von Glahn to the fullest extent permitted by Delaware law against any
expenses actually and reasonably incurred by him in connection with any action,
suit or proceeding in which he is made party by reason of his being an officer
of Williams or Williams Holdings. Williams Holdings, through Williams, also
maintains directors' and officers' liability insurance under which Mr. von Glahn
is insured against certain expenses and liabilities.
S-8
<PAGE> 9
WHERE YOU CAN FIND MORE INFORMATION
Williams Holdings files annual, quarterly and special reports and other
information with the SEC. You may read and copy any document Williams Holdings
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Williams Holdings' SEC filings are
also available to the public from the SEC's web site at http://www.sec.gov.
The SEC allows Williams Holdings to "incorporate by reference" the
information Williams Holdings files with them, which means that Williams
Holdings can disclose important information to you by referring you to other
documents. The information incorporated by reference is considered to be part of
this Prospectus Supplement, and later information filed with the SEC will update
and supercede this information. Williams Holdings incorporates by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until Williams
Holdings sells all the Notes.
- Williams Holdings Annual Report 10-K for the year ended December 31,
1997;
- Williams Holdings Quarterly Reports on 10-Q for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998; and
- Williams Holdings Current Reports on Form 8-K, dates of report April 29,
1998, May 18, 1998 and November 23, 1998.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations
Williams Holdings of Delaware, Inc.
One Williams Center
Tulsa, Oklahoma 74172
(918) 573-2000
S-9
<PAGE> 10
PROSPECTUS
WILLIAMS HOLDINGS OF DELAWARE, INC.
DEBT SECURITIES AND
PREFERRED STOCK
---------------------
Williams Holdings of Delaware, Inc. (the "Company") may offer and sell from
time to time (a) unsecured debentures, notes or other evidences of indebtedness
("Debt Securities"), and (b) shares of its Preferred Stock, $1.00 par value per
share ("Preferred Stock" and collectively with Debt Securities, the
"Securities") with an initial offering price not to exceed $820,000,000 in the
aggregate (or the equivalent in foreign denominated currency or units based on
or related to currencies, including European Currency Units). All specific terms
of the offering and sale of the Securities, including the specific (a)
designation, rights and restrictions and whether the Debt Securities are senior
or subordinated, the currencies or composite currencies in which the Debt
Securities are denominated, the aggregate principal amount, the maturity, rate
and time of payment of interest, and any conversion, exchange, redemption or
sinking fund provisions, (b) designation, rights, preferences, privileges and
restrictions of Preferred Stock, including dividend rate or rates/or methods of
ascertaining the same, dividend payment dates, voting rights, liquidation
preference, and any conversion, exchange or redemption or sinking fund
provisions, and (c) initial public offering price, listing on any securities
exchange, and the agents, dealers or underwriters, if any, to be utilized in
connection with the sale of the Securities, will be set forth in an accompanying
Prospectus Supplement (the "Prospectus Supplement"). The Securities may be sold
for U.S. dollars, foreign denominated currency or currency units; principal of
and any interest may likewise be payable in U.S. dollars, foreign denominated
currency or currency units -- in each case, as the Company specifically
designates. The managing underwriters with respect to each series sold to or
through underwriters will be named in the Prospectus Supplement.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The Securities may be offered through dealers, through underwriters or
through agents designated from time to time as set forth in the Prospectus
Supplement. Net proceeds to the Company will be the purchase price in the case
of a dealer, the public offering price less discount in the case of an
underwriter or the purchase price less commission in the case of an agent -- in
each case, less other expenses attributable to issuance and distribution. See
"Plan of Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
This Prospectus does not constitute an offer to sell or the solicitation of
an offer to buy any of the securities other than the Securities described in the
accompanying Prospectus Supplement.
The date of this Prospectus is September 15, 1997
<PAGE> 11
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C., a Registration Statement on Form S-3 under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Securities offered hereby. Certain portions of the Registration Statement
have not been included in this Prospectus as permitted by the Commission's rules
and regulations. For further information, reference is made to the Registration
Statement and the exhibits thereto. The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other information with the
Commission. The Registration Statement (with exhibits), as well as such reports
and other information filed by the Company with the Commission, can be inspected
and copied at the public reference facilities maintained by the Commission at
its principal offices at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and its regional offices at Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, Suite 1300, New York, New York 10048, or from the Commission's worldwide
web site at http://www.sec.gov. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549.
---------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
---------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996, ("Form 10-K") and the Company's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1997, and June 30, 1997, filed by the Company
with the Commission under the Exchange Act are incorporated by reference.
All documents filed by the Company pursuant to Section 13, 14 or 15(d) of
the Exchange Act after the date of this Prospectus and prior to the termination
of this offering shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement in this Prospectus or in any
subsequently filed document that also is or is deemed to be incorporated by
reference modifies or replaces such statement.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
any such person, a copy of any or all of the documents incorporated by reference
herein, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to:
Williams Holdings of Delaware, Inc., One Williams Center, Tulsa, Oklahoma 74172,
Attention: Corporate Secretary, (918) 588-2000.
REPORTS TO HOLDERS OF DEBT SECURITIES
The Company is not required to publish annual and quarterly reports to
holders of Debt Securities. The Company's annual report on Form 10-K containing
audited financial statements will be provided to holders of Debt Securities upon
request.
---------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE DEBT SECURITIES.
SPECIFICALLY, THE UNDERWRITERS, IF ANY, MAY OVERALLOT IN CONNECTION WITH THE
OFFERING, AND MAY BID FOR, AND PURCHASE, THE SECURITIES IN THE OPEN MARKET.
2
<PAGE> 12
THE COMPANY
The Company was incorporated under the laws of the State of Delaware in
July 1994. The principal executive offices of the Company are located at One
Williams Center, Tulsa, Oklahoma 74172 (telephone (918) 588-2000). Unless the
context otherwise requires, references to the Company herein include
subsidiaries of the Company. The Company is a wholly-owned subsidiary of The
Williams Companies, Inc. ("Williams").
The Company, through subsidiaries, engages in hydrocarbon exploration and
production activities; natural gas gathering, processing, and treating
activities; the transportation and terminaling of crude oil and petroleum
products; the production and marketing of ethanol; and energy commodity trading
and marketing and provides a variety of other products and services, including
price risk management services, to the energy industry. The Company's
communications subsidiaries offer data-, voice-, and video-related products and
services; advertising distribution services; video services and other multimedia
services for the broadcast industry; broadcast facsimile and audio- and
video-conferencing services for businesses; interactive, computer-based training
and services; and customer premise voice and data equipment, including
installation and maintenance; and network integration and management services
nationwide. The Company also has certain other equity investments.
The Company conducts substantially all of its operations through
subsidiaries. Williams performs management, legal, financial, tax, consultative,
administrative, and other services for the Company and its subsidiaries. The
Company's principal sources of cash are from external financings, dividends and
advances from its subsidiaries, advances from Williams, investments, and
interest payments from subsidiaries and Williams on cash advances. The amount of
dividends available to the Company from subsidiaries largely depends on each
subsidiary's earnings and capital requirements. Terms of one subsidiary's
borrowing arrangements limit the transfer of funds to the Company.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds from the sale of the Securities will be used for general corporate
purposes, including repayment of outstanding debt. The Company anticipates that
it will raise additional funds from time to time through debt financings,
including borrowings under its bank Credit Agreement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table represents the Company's consolidated ratio of earnings
to fixed charges for the periods shown.
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ---------------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
- ------------- ---------------------------------
<S> <C> <C> <C> <C> <C>
5.95 8.47 5.17 6.71 14.10 2.86
</TABLE>
For the purpose of this ratio: (i) earnings consist of income from
continuing operations before fixed charges and income taxes for the Company, its
majority-owned subsidiaries and its proportionate share of 50 percent-owned
companies, less undistributed earnings of less than 50 percent-owned companies
and (ii) fixed charges consist of interest and debt expense on all indebtedness
(without reduction of interest capitalized) and that portion of rental payments
on operating leases estimated to represent an interest factor, plus the pretax
effect of preferred dividends of subsidiaries. The ratio of earnings to combined
fixed charges and preferred stock dividends is the same as the ratio of earnings
to fixed charges, as no preferred stock was outstanding during any of these
periods.
3
<PAGE> 13
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF THE COMPANY
The following selected income statement for the six months ended June 30,
1997, and balance sheet data for June 30, 1997, have been derived from the
Company's unaudited consolidated financial statements included in the Company's
quarterly report on Form 10-Q for the quarter ended June 30, 1997, incorporated
herein by reference. The following selected income statement data for the years
1996, 1995, and 1994 and balance sheet data for 1996 and 1995 have been derived
from the Company's audited consolidated financial statements appearing in the
Form 10-K for the year ended December 31, 1996 and incorporated herein by
reference. The income statement data for the years 1993 and 1992 and balance
sheet data for 1994 and 1993 have been derived from the Company's audited
consolidated financial statements previously filed with the Commission but not
incorporated herein by reference. The balance sheet data for 1992 have been
derived from the Company's consolidated financial statements not appearing
elsewhere herein or in the Form 10-K. The selected historical consolidated
financial data shown below should be read in conjunction with such financial
statements of the Company and related notes.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------------
1997 1996 1995(2) 1994 1993 1992
-------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues.......................... $1,164.5 $1,841.3 $1,354.0 $1,264.3 $1,221.0 $1,283.2
Income from continuing operations....... 137.8(3) 228.7(4) 211.8(5) 125.5(6) 152.3(7) 46.9(8)
Income from discontinued operations(1).. -- -- 1,018.8 94.0 46.4 25.2
Net income.............................. 137.8 228.7 1,230.6 213.4 198.7 83.2
BALANCE SHEET DATA:
Property, plant and equipment -- net.... 2,720.8 2,540.4 2,225.2 1,585.1 2,151.1 2,157.3
Total assets............................ 5,815.7 5,163.9 4,232.8 3,440.1 2,989.4 2,869.9
Long-term debt.......................... 1,271.2 860.4 273.9 507.0 229.4 337.1
Stockholder's equity.................... $2,672.1 $2,482.8 $2,151.6 $1,739.9 $1,818.0 $1,614.6
RATIO OF EARNINGS TO FIXED CHARGES(9)... 5.95 8.47 5.17 6.71 14.10 2.86
</TABLE>
- ---------------
(1) In the third quarter of 1994, the Company signed a definitive agreement to
enter into the sale of its network services operations (the "WNS Sale"). On
January 5, 1995, the Company consummated the transaction and the gain from
the sale was reported as discontinued operations in the 1995 first quarter
consolidated financial statements. The selected historical consolidated
financial data has been prepared to present operating results of the
operations sold in the WNS Sale as discontinued operations. Prior period
balance sheets have not been restated. For additional information see Note 3
of the Notes to Consolidated Financial Statements of the Company appearing
in the Form 10-K and incorporated herein by reference.
(2) On January 18, 1995, Williams acquired 60 percent of the outstanding common
stock of Transco Energy Company (Transco) in a cash tender offer. On May 1,
1995, the remaining 40 percent of Transco's outstanding common stock was
acquired through a merger, which involved the exchange of the remaining
Transco common stock for approximately 15.6 million shares of Williams
common stock. Williams then contributed the stock of Transco and Transco's
subsidiaries, except subsidiaries holding Transco's interstate natural gas
pipelines, to the Company. For additional information see Note 2 of the
Notes to Consolidated Financial Statements of the Company appearing in the
Form 10-K, and incorporated herein by reference.
(3) Includes an after-tax gain on sale of interest in subsidiary of $44.5
million. See Note 3 of the Notes to Unaudited Consolidated Financial
Statements appearing in the Form 10-Q for the quarter ended June 30, 1997,
and incorporated herein by reference.
(4) Includes a pretax gain on sales of assets of $15.7 million. See Note 5 of
the Notes to Consolidated Financial Statements of the Company appearing in
the Form 10-K and incorporated herein by reference. Also includes a pretax
gain of $20 million from the property insurance coverage associated with
construction of replacement gathering facilities.
4
<PAGE> 14
(5) Includes a pretax gain on exchange of investments of $25.4 million, a pretax
gain on sale of Williams common stock of $10.8 million, a pretax loss on
sale of an investment of $12.6 million (after-tax gain of $16 million), and
a $41.4 million pretax write-off of project costs. See Notes 4 and 5 of the
Notes to Consolidated Financial Statements of the Company appearing in the
Form 10-K and incorporated herein by reference.
(6) Includes a pretax gain on sales of assets of $22.7 million. See Note 5 of
the Notes to Consolidated Financial Statements of the Company appearing in
the Form 10-K and incorporated herein by reference.
(7) Includes a pretax gain of $51.6 million from the sale of 6.1 million units
in the Williams Coal Seam Gas Royalty Trust and a pretax gain of $45.9
million from the sale of the intrastate natural gas pipeline system and
other related assets in Louisiana.
(8) Includes a pretax gain of $14.6 million from the sale of a tract of land in
Florida that had been retained from the previous sale of Agrico Chemical
Company.
(9) For the purpose of this ratio (i) earnings consist of income from continuing
operations before fixed charges and income taxes for the Company, its
majority-owned subsidiaries and its proportionate share of 50 percent-owned
companies, less undistributed earnings of less than 50 percent-owned
companies and (ii) fixed charges consist of interest and debt expense on all
indebtedness (without reduction of interest capitalized) and that portion of
rental payments on operating leases estimated to represent an interest
factor, plus the pretax effect of preferred dividends of subsidiaries. The
ratio of earnings to combined fixed charges and preferred stock dividends is
the same as the ratio of earnings to fixed charges, as no preferred stock
was outstanding during any of these periods.
5
<PAGE> 15
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either senior or subordinated debt of
the Company and will be issued, in the case of Debt Securities that will be
senior debt, under an indenture (the "Senior Debt Indenture"), between the
Company and Citibank, N.A., as Trustee, and, in the case of Debt Securities that
will be subordinated debt, under an indenture (the "Subordinated Debt
Indenture"), between the Company and Citibank, N.A., as Trustee. The Senior Debt
Indenture and the Subordinated Debt Indenture are sometimes hereinafter referred
to individually as an "Indenture" and collectively as the "Indentures."
Citibank, N.A. is hereinafter referred to as the "Trustee." The forms of the
Indentures are filed as exhibits to the Registration Statement. The following
summaries of certain provisions of the Indentures and the Debt Securities do not
purport to be complete and such summaries are subject to the detailed provisions
of the applicable Indenture to which reference is hereby made for a full
description of such provisions, including the definition of certain terms used
herein, and for other information regarding the Debt Securities. Numerical
references in parentheses below are to sections in the applicable Indenture.
Wherever particular sections or defined terms of the applicable Indenture are
referred to, such sections or defined terms are incorporated herein by reference
as part of the statement made, and the statement is qualified in its entirety by
such reference. The Indentures are substantially identical, except for the
provisions relating to subordination and the Company's limitation on liens. See
"Subordinated Debt" and "Certain Covenants of the Company." Neither Indenture
contains any covenants or provisions which affords debt holders protection in
the event of a highly leveraged transaction.
CERTAIN DEFINITIONS
Certain terms defined in Article One of the Senior Debt Indenture are
summarized as follows:
"Consolidated Funded Indebtedness" means the aggregate of all
outstanding Funded Indebtedness of the Company and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with
generally accepted accounting principles.
"Consolidated Net Tangible Assets" means the total assets appearing on
a consolidated balance sheet of the Company and its consolidated
Subsidiaries less, in general: (i) intangible assets; (ii) current and
accrued liabilities (other than Consolidated Funded Indebtedness and
capitalized rentals or leases), deferred credits, deferred gains and
deferred income; (iii) reserves; (iv) advances to finance oil or natural
gas exploration and development to the extent that the indebtedness related
thereto is excluded from Funded Indebtedness; (v) an amount equal to the
amount excluded from Funded Indebtedness representing "production payment"
financing of oil or natural gas exploration and development; and (vi)
minority stockholder interests.
"Funded Indebtedness" means any Indebtedness which matures more than
one year after the date as of which Funded Indebtedness is being determined
less any such Indebtedness as will be retired through or by means of any
deposit or payment required to be made within one year from such date under
any prepayment provision, sinking fund, purchase fund or otherwise;
provided, however, that such term shall not include Indebtedness of the
Company or any of its Subsidiaries incurred to finance outstanding advances
to others to finance oil or natural gas exploration and development to the
extent that the latter are not in default in their obligations to the
Company or such Subsidiary, nor shall such term include Indebtedness of the
Company or any of its Subsidiaries incurred to finance oil or natural gas
exploration and development by means commonly referred to as a "production
payment" to the extent that the Company or any of its Subsidiaries have not
guaranteed the repayment of the production payment.
"Holder" means, in general, a Person in whose name the Securities are
registered, or, if not registered, the bearer thereof.
"Indebtedness" means indebtedness which is for money borrowed from
others.
"Person" means any individual, corporation, limited liability company,
limited partnership, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
6
<PAGE> 16
"Subsidiary" means any corporation at least a majority of the
outstanding securities of which having ordinary voting power shall be owned
by the Company and/or another Subsidiary or Subsidiaries.
GENERAL
Neither of the Indentures limits the amount of Debt Securities, debentures,
notes or other evidences of indebtedness that may be issued by the Company or
any of its Subsidiaries. The Debt Securities will be unsecured senior or
subordinated obligations of the Company. All of the operating assets of the
Company and its Subsidiaries are owned by its Subsidiaries. Therefore, the
Company's rights and the rights of its creditors, including Holders of Debt
Securities, to participate in the assets of any Subsidiary upon the latter's
liquidation or recapitalization will be subject to the prior claims of the
Subsidiary's creditors, except to the extent that the Company may itself be a
creditor with recognized claims against the Subsidiary. The ability of the
Company to pay principal of and interest on the Debt Securities is, to a large
extent, dependent upon the receipt by it of dividends or other payments from its
Subsidiaries. Dividends payable by Williams Pipe Line Company, one of the
principal subsidiaries of the Company, are restricted under that company's
current debt agreements.
The Indentures provide that Debt Securities may be issued from time to time
in one or more series and may be denominated and payable in foreign currencies
or units based on or relating to foreign currencies, including European Currency
Units. Special United States federal income tax considerations applicable to any
Debt Securities so denominated are described in the relevant Prospectus
Supplement.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Debt Securities (to the extent such terms are
applicable to such Debt Securities): (i) classification as senior or
subordinated Debt Securities, the specific designation, aggregate principal
amount, purchase price and denomination; (ii) currency or units based on or
relating to currencies in which such Debt Securities are denominated and/or in
which principal, premium, if any, and/or any interest will or may be payable;
(iii) any date of maturity; (iv) interest rate or rates (or method by which such
rate will be determined), if any; (v) the dates on which any such interest will
be payable; (vi) the place or places where the principal of and interest, if
any, on the Debt Securities will be payable; (vii) any redemption or sinking
fund provisions; (viii) whether the Debt Securities will be issuable in
registered or bearer form or both and, if Debt Securities in bearer form are
issuable, restrictions applicable to the exchange of one form for another and to
the offer, sale and delivery of Debt Securities in bearer form; (ix) any
applicable United States federal income tax consequences, including whether and
under what circumstances the Company will pay additional amounts on Debt
Securities held by a Person who is not a U.S. Person (as defined in the
Prospectus Supplement) in respect of any tax, assessment or governmental charge
withheld or deducted, and if so, whether the Company will have the option to
redeem such Debt Securities rather than pay such additional amounts; and (x) any
other specific terms of the Debt Securities, including any additional events of
default or covenants provided for with respect to such Debt Securities, and any
terms which may be required by or advisable under United States laws or
regulations.
Debt Securities may be presented for exchange, and registered Debt
Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Debt Securities and the Prospectus
Supplement. Such services will be provided without charge, other than any tax or
other governmental charge payable in connection therewith, but subject to the
limitations provided in the applicable Indenture. Debt Securities in bearer form
and the coupons, if any, appertaining thereto will be transferable by delivery.
Debt Securities that bear interest will do so at a fixed rate or a floating
rate. Debt Securities bearing no interest or interest at a rate that at the time
of issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes will be described in the
relevant Prospectus Supplement.
7
<PAGE> 17
REGISTERED GLOBAL SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more fully registered global Securities (a "Registered Global Security") that
will be deposited with a depositary (the "Depositary"), or with a nominee for a
Depositary identified in the Prospectus Supplement relating to such series. In
such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Security or Securities. Unless and until
it is exchanged in whole or in part for Debt Securities in definitive registered
form, a Registered Global Security may not be transferred except as a whole by
the Depositary for such Registered Global Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such series.
The Company anticipates that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a Registered Global Security, the Depositary for such
Registered Global Security will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Debt Securities
represented by such Registered Global Security to the accounts of Persons that
have accounts with such Depositary ("participants"). The accounts to be credited
shall be designated by any underwriters or agents participating in the
distribution of such Debt Securities. Ownership of beneficial interests in a
Registered Global Security will be limited to participants or Persons that may
hold interests through participants. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the Depositary for such
Registered Global Security (with respect to interests of participants) or by
participants or Persons that hold through participants (with respect to
interests of Persons other than participants). So long as the Depositary for a
Registered Global Security, or its nominee, is the registered owner of such
Registered Global Security, such Depositary or such nominee, as the case may be,
will be considered the sole owner or Holder of the Debt Securities represented
by such Registered Global Security for all purposes under the applicable
Indenture. Except as set forth below, owners of beneficial interests in a
Registered Global Security will not be entitled to have the Debt Securities
represented by such Registered Global Security registered in their names, will
not receive or be entitled to receive physical delivery of such Debt Securities
in definitive form and will not be considered the owners or Holders thereof
under the applicable Indenture.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Registered Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Registered Global Security. None of
the Company, the Trustees or any paying agent for such Debt Securities will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in such Registered
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company expects that the Depositary for any Debt Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium or interest, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Registered Global Security as shown on the records
of such Depositary. The Company also expects that payments by participants to
owners of beneficial interests in such Registered Global Security held through
such participants will be governed by standing instructions and customary
practices, as is now the case with the securities held for the accounts of
customers registered in "street names" and will be the responsibility of such
participants.
If the Depositary for any Debt Securities represented by a Registered
Global Security is at any time unwilling or unable to continue as Depositary and
a successor Depositary is not appointed by the Company within ninety days, the
Company will issue such Debt Securities in definitive form in exchange for such
Registered Global Security. In addition, the Company may at any time and in its
sole discretion determine not
8
<PAGE> 18
to have any of the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt Securities of
such series in definitive form in exchange for all of the Registered Global
Security or Securities representing such Debt Securities.
SENIOR DEBT
The Debt Securities and any coupons appertaining thereto (the "Coupons")
that will constitute part of the senior debt of the Company will be issued under
the Senior Debt Indenture and will rank equally and pari passu with all other
unsecured and unsubordinated debt of the Company.
SUBORDINATED DEBT
The Debt Securities and Coupons that will constitute part of the
subordinated debt of the Company will be issued under the Subordinated Debt
Indenture and will be subordinate and junior in right of payment, to the extent
and in the manner set forth in the Subordinated Debt Indenture, to all "Senior
Indebtedness" of the Company. The Subordinated Debt Indenture defines "Senior
Indebtedness" as obligations (other than nonrecourse obligations, the
subordinated Debt Securities or any other obligations specifically designated as
being subordinate in right of payment to Senior Indebtedness) of, or guaranteed
or assumed by, the Company for borrowed money or evidenced by bonds, debentures,
notes or other similar instruments, and amendments, renewals, extensions,
modifications and refundings of any such indebtedness or obligation.
(Subordinated Debt Indenture, Section 1.1)
In general, in the event (a) of any insolvency or bankruptcy proceedings,
or any receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property or (b) that (i) a
default shall have occurred with respect to the payment of principal, premium,
if any, or interest on or other monetary amounts due and payable on any Senior
Indebtedness or (ii) there shall have occurred an event of default (other than a
default in the payment of principal, premium, if any, or interest, or other
monetary amounts due and payable) with respect to any Senior Indebtedness, as
defined therein or in the instrument under which the same is outstanding,
permitting the holder or holders thereof to accelerate the maturity thereof
(with notice or lapse of time, or both), and such event of default shall have
continued beyond the period of grace, if any, in respect thereof, and such event
of default shall not have been cured or waived or shall not have ceased to
exist, or (c) that the principal of and accrued interest on any series of the
subordinated Debt Securities shall have been declared due and payable upon an
event of default pursuant to Section 5.1 of the Subordinated Debt Indenture and
such declaration shall not have been rescinded and annulled as provided therein,
then the holders of all Senior Indebtedness shall first be entitled to receive
payment of the full amount unpaid thereon, or provision shall be made for such
payment in money or money's worth, before the Holders of any of the subordinated
Debt Securities or Coupons are entitled to receive a payment on account of the
principal or interest on the indebtedness evidenced by such subordinated Debt
Securities (Subordinated Debt Indenture, Section 13.1) If this Prospectus is
being delivered in connection with a series of subordinated Debt Securities, the
accompanying Prospectus Supplement or the information incorporated herein by
reference will set forth the approximate amount of Senior Indebtedness
outstanding as of the end of the most recent fiscal quarter.
CERTAIN COVENANTS OF THE COMPANY
Liens. The Senior Debt Indenture provides that, subject to certain
exceptions, the Company will not, nor will it permit any Subsidiary to, issue,
assume or guarantee any Indebtedness secured by a mortgage, pledge, lien,
security interest or encumbrance ("mortgage"), upon any of its properties
without effectively providing that the senior Debt Securities issued thereunder
shall be equally and ratably secured with such Indebtedness. Among the
exceptions are certain purchase money mortgages; certain preexisting mortgages
on any property acquired or constructed by the Company or a Subsidiary and
certain mortgages created within one year after completion of such acquisition
or construction; certain mortgages created on any contract for the sale of
products or services related to the operation or use of any property acquired or
constructed within one year after completion of such acquisition or
construction; mortgages on property of a Subsidiary existing at the time it
became a Subsidiary of the Company; and mortgages, other than as specifically
excepted, in an aggregate
9
<PAGE> 19
amount which, at the time of, and after giving effect to, the incurrence does
not exceed 5 percent of the Consolidated Net Tangible Assets. (Senior Debt
Indenture, Section 3.6)
Consolidation, Merger, Conveyance of Assets. Each Indenture provides, in
general, that the Company will not consolidate with or merge into any other
entity or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, unless the corporation limited liability company,
limited partnership, joint stock company, or trust formed by such consolidation
or into which the Company is merged or the Person which acquires such assets
shall expressly assume the Company's obligations under such Indenture and the
Debt Securities issued thereunder and immediately after giving effect to such
transaction, no event of default, and no event which, after notice or lapse of
time or both, would become an event of default, shall have happened and be
continuing. (Section 9.1)
Event Risk. Except for the limitations on Liens described above, neither
Indenture nor the Debt Securities contains any covenants or other provisions
designed to afford holders of the Debt Securities protection in the event of a
highly leveraged transaction involving the Company.
EVENTS OF DEFAULT
In general, an Event of Default is defined under each Indenture with
respect to Debt Securities of any series issued under such Indenture as being:
(a) default in payment of any principal of the Debt Securities of such series,
either at maturity, upon any redemption, by declaration or otherwise; (b)
default for 30 days in payment of any interest on any Debt Securities of such
series unless otherwise provided; (c) default for 90 days after written notice
in the observance or performance of any covenant or warranty in the Debt
Securities of such series or such Indenture other than a covenant a default in
whose performance, or whose breach, is dealt with otherwise below or, if certain
conditions are met, the Events of Default described in this clause (c) are the
result of changes in generally accepted accounting principles; or (d) certain
events of bankruptcy, insolvency or reorganization of the Company. (Section 5.1)
In general, each Indenture provides that, (a) if an Event of Default
described in clauses (a), (b) or (c) above (if the Event of Default under clause
(c) is with respect to less than all series of Debt Securities then outstanding)
occurs, the Trustee or the Holders of not less than 25 percent in principal
amount of the Debt Securities of each affected series (treated as one class)
issued under such Indenture and then outstanding may then declare the entire
principal of all Debt Securities of each such affected series and interest
accrued thereon to be due and payable immediately and (b) if an Event of Default
due to a default described in clause (c) above which is applicable to all series
of Debt Securities then outstanding or due to certain events of bankruptcy,
insolvency and reorganization of the Company, shall have occurred and be
continuing, the Trustee or the Holders of not less than 25 percent in principal
amount of all Debt Securities issued under such Indenture and then outstanding
(treated as one class) may declare the entire principal of all such Debt
Securities and interest accrued thereon to be due and payable immediately, but
upon certain conditions such declarations may be annulled and past defaults may
be waived (except a continuing default in payment of principal of, premium, if
any, or interest on such Debt Securities) by the holders of a majority in
aggregate principal amount of the Debt Securities of all such affected series
then outstanding. (Sections 5.1 and 5.10)
Each Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of care,
to be indemnified by the Holders of Debt Securities (treated as one class)
issued under such Indenture before proceeding, at the request of such Holders,
to exercise any right or power under such Indenture. (Section 6.2) Subject to
such provisions in each Indenture for the indemnification of the Trustee and
certain other limitations, the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities of each series affected (treated as
one class) issued under such Indenture may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee. (Section 5.9)
In general, each Indenture provides that no Holder of Debt Securities
issued under such Indenture may institute any action against the Company under
such Indenture (except actions for payment of principal or interest on or after
the due date provided) unless such Holder previously shall have given to the
Trustee
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written notice of default and continuance thereof and unless the Holders of not
less than 25 percent in principal amount of the Debt Securities of each affected
series (treated as one class) issued under such Indenture and then outstanding
shall have requested the Trustee to institute such action and shall have offered
the Trustee reasonable indemnity and the Trustee shall not have instituted such
action within 60 days of such request and the Trustee shall not have received
direction inconsistent with such written request by the Holders of a majority in
principal amount of the Debt Securities of each affected series (treated as one
class) issued under such Indenture and then outstanding. (Sections 5.6, 5.7 and
5.9)
Each Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any default
that exists. (Section 3.5)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or defease its obligations under each Indenture
as set forth below. (Section 10.1)
Under terms satisfactory to the Trustee, the Company may discharge certain
obligations to Holders of any series of Debt Securities issued under such
Indenture which have not already been delivered to the Trustee for cancellation
and which have either become due and payable or are by their terms due and
payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the Trustee cash or, in the case of Debt Securities
payable only in U.S. dollars, U.S. Government Obligations (as defined in such
Indenture) as trust funds in an amount certified to be sufficient to pay at
maturity (or upon redemption) the principal of and interest on such Debt
Securities.
The Company may also, upon satisfaction of the conditions listed below,
discharge certain obligations to Holders of any series of Debt Securities issued
under such Indenture at any time ("defeasance"). Under terms satisfactory to the
Trustee, the Company may instead be released with respect to any outstanding
series of Debt Securities issued under the relevant Indenture from the
obligations imposed by Sections 3.6 and 9.1, in the case of the Senior Debt
Indenture, and Section 9.1, in the case of the Subordinated Debt Indenture
(which contain the covenants described above limiting liens and consolidations,
mergers and conveyances of assets), and omit to comply with such Sections
without creating an Event of Default ("covenant defeasance"). Defeasance or
covenant defeasance may be effected only if, among other things: (i) the Company
irrevocably deposits with the Trustee cash or, in the case of Debt Securities
payable only in U.S. dollars, U.S. Government Obligations, as trust funds in an
amount certified to be sufficient to pay at maturity (or upon redemption) the
principal of and interest on all outstanding Debt Securities of such series
issued under such Indenture; (ii) the Company delivers to the Trustee an opinion
of counsel to the effect that the Holders of such series of Debt Securities will
not recognize income, gain or loss for United States federal income tax purposes
as a result of such defeasance or covenant defeasance and will be subject to
United States federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if defeasance or covenant defeasance
had not occurred (in the case of a defeasance, such opinion must be based on a
ruling of the Internal Revenue Service or a change in United States federal
income tax law occurring after the date of such Indenture, since such a result
would not occur under current tax law); and (iii) in the case of the
Subordinated Debt Indenture (a) no event or condition shall exist that, pursuant
to certain provisions described under "Subordinated Debt" above, would prevent
the Company from making payments of principal of or interest on the subordinated
Debt Securities at the date of the irrevocable deposit referred to above or at
any time during the period ending on the 91st day after such deposit date and
(b) the Company delivers to the Trustee for the Subordinated Debt Indenture an
opinion of counsel to the effect that (1) the trust funds will not be subject to
any rights of holders of Senior Indebtedness and (2) after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, except that, if a court were to rule under any such
law in any case or proceeding that the trust funds remained property of the
Company, then no opinion is given as to the effect of such laws on the trust
funds except as set forth in the Subordinated Indenture relating to (i)
Trustee's valid and perfected security interest in such trust funds; (ii)
adequate protection of holders of the Subordinated Debt Securities interests in
such trust funds; and (iii) no prior rights of holders of Senior
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Debt Securities in property or interests granted to the Trustee or holders of
the Subordinated Debt Securities in exchange for or with respect to such trust
funds.
MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee may enter into
supplemental indentures (which conform to the provisions of the Trust Indenture
Act of 1939) without the consent of the Holders to, in general: (a) secure any
Debt Securities; (b) evidence the assumption by a successor Person of the
obligations of the Company; (c) add further covenants for the protection of the
Holders; (d) cure any ambiguity or correct any inconsistency in such Indenture,
so long as such action will not adversely affect the interests of the Holders;
(e) establish the form or terms of Debt Securities of any series; and (f)
evidence the acceptance of appointment by a successor trustee. (Section 8.1)
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than the majority in
principal amount of Debt Securities of each series issued under such Indenture
then outstanding and affected (voting as one class) to, in general, add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the Holders of the Debt
Securities of each series so affected; provided that such changes conform to
provisions of the Trust Indenture Act of 1939 and provided that the Company and
the Trustee may not, without the consent of each Holder of outstanding Debt
Securities affected thereby, (a) extend the final maturity of the principal of
any Debt Securities, or reduce the principal amount thereof or reduce the rate
or extend the time of payment of interest thereon, or reduce any amount payable
on redemption thereof or change the currency in which the principal thereof
(including any amount in respect of original issue discount) or interest thereon
is payable, or reduce the amount of any original issue discount security payable
upon acceleration or provable in bankruptcy or alter certain provisions of such
Indenture relating to Debt Securities not denominated in U.S. dollars or for
which conversion to another currency is required to satisfy the judgment of any
court, or impair the right to institute suit for the enforcement of any payment
on any Debt Securities when due or (b) reduce the aforesaid percentage in
principal amount of Debt Securities of any series issued under such Indenture,
the consent of the Holders of which is required for any such modification.
(Section 8.2)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding subordinated Debt Securities without the
consent of each Holder of Senior Indebtedness then outstanding that would be
adversely affected thereby. (Subordinated Debt Indenture, Section 8.6)
CONCERNING THE TRUSTEE
The Trustee is one of a number of banks with which the Company, its parent
and its Subsidiaries maintain ordinary banking relationships and with which the
Company and its Subsidiaries and Affiliates maintain credit facilities. The
Trustee also serves as trustee under the Company's Senior Indenture dated as of
February 1, 1996.
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
Except as may otherwise be provided in the Prospectus Supplement applicable
thereto, in compliance with United States federal income tax laws and
regulations, Debt Securities that are Bearer Debt Securities (including Debt
Securities in global form) will not be offered, sold, resold or delivered,
directly or indirectly, in connection with their original issuance, at any time,
in the United States or to United States persons (as defined below) other than
to offices located outside the United States of United States financial
institutions (as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v)) that are purchasing for their own account or for the account
of a customer and that agree in writing to comply with the requirements of
Sections 165(j)(3)(A), (B) or (C) of the Internal Revenue Code and the
regulations thereunder. Any underwriters, agents and dealers participating in
the offerings of Bearer Debt Securities, directly or indirectly, must agree that
they will not, in connection with the original issuance of any Bearer Debt
Securities or during the period set forth in the Prospectus Supplement following
the original issuance of such Bearer Debt Securities offer, sell, resell or
deliver, directly or indirectly, any Bearer Debt Securities in the United States
or
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<PAGE> 22
to United States persons (other than the financial institutions described
above). In addition, any such underwriters, agents and dealers must agree to
send a written confirmation to each purchaser from or through it of Bearer Debt
Securities in connection with their original issuance or during the period set
forth in the Prospectus Supplement following the original issuance of such
Bearer Debt Securities in every case confirming that such purchaser represents
that it is not a United States person or, if it is a United States person, that
it is a financial institution described above purchasing for its own account or
the account of a customer and, if such person is a dealer, that it will send
similar confirmations to purchasers from it.
Bearer Debt Securities (other than temporary global Debt Securities) and
any Coupons appertaining thereto will bear a legend substantially to the
following effect: "Any United States person who holds this obligation will be
subject to limitations under the United States federal income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code." The sections referred to in such legend provide that a
United States person (other than a United States financial institution described
above or United States person holding through such a financial institution) who
holds a Bearer Debt Security or Coupon will not be allowed to deduct any loss
realized on the sale, exchange or redemption of such Bearer Debt Security and
any gain (which might otherwise be characterized as capital gain) recognized on
such sale, exchange or redemption will be treated as ordinary income.
As used herein, "United States person" means a citizen, national or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source.
DESCRIPTION OF PREFERRED STOCK
Under the Company's Certificate of Incorporation, as amended, the Company
is authorized to issue up to 10,000,000 shares of Preferred Stock, par value
$1.00 per share, in one or more series. No Preferred Stock is currently
outstanding. The following description of Preferred Stock sets forth certain
general terms and provisions of the series of Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of a particular series of
Preferred Stock will be described in the Prospectus Supplement relating to such
series of Preferred Stock. If so indicated in the Prospectus Supplement relating
thereto, the terms of any such series of Preferred Stock may differ from the
terms set forth below. The description of Preferred Stock set forth below and
the description of the terms of a particular series of Preferred Stock set forth
in the Prospectus Supplement thereto do not purport to be complete and are
qualified in their entirety by reference to the Certificate of Incorporation and
to the certificate of designation relating to that series.
The rights of the holders of each series of Preferred Stock will be
subordinate to those of the Company's general creditors.
GENERAL
The designations, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations and restrictions
thereof, of the Preferred Stock of each series shall be such as are stated and
expressed in the Certificate of Incorporation and, to the extent not stated and
expressed therein, shall be such as may be fixed by the certificate of
designation relating to such series. A Prospectus Supplement, relating to each
series, shall specify the terms of the Preferred Stock as follows:
(a) the distinctive designation of such series and the number of
shares which shall constitute such series;
(b) the rate of dividends, if any, payable on shares of such series,
the dates, if any, from which such dividends shall accrue, the dates when
such dividends shall be payable, and whether such dividends shall be
cumulative or noncumulative;
(c) the amounts which the holders of the Preferred Stock of such
series shall be entitled to be paid in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the Company;
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<PAGE> 23
(d) whether or not the Preferred Stock of such series shall be
redeemable and at what times and under what conditions and the amount or
amounts payable thereon in the event of redemption; and
(e) may, in a manner not inconsistent with the provisions of the
Certificate of Incorporation, (i) limit the number of shares of such series
which may be issued; (ii) provide for a sinking fund for the purchase or
redemption or a purchase fund for the purchase of shares of such series and
the terms and provisions governing the operation of any such fund and the
status as to reissue of shares of Preferred Stock purchased or otherwise
reacquired or redeemed or retired through the operation thereof; (iii)
grant voting rights to the holder of shares of such series, in addition to
and not inconsistent with those granted by the Certificate of Incorporation
to the holders of Preferred Stock; (iv) impose conditions or restrictions
upon the creation of indebtedness of the Company or upon the issue of
additional Preferred Stock or other capital stock ranking equally therewith
or prior thereto as to dividends or distribution of assets on liquidation;
(v) impose conditions or restrictions upon the payment of dividends upon,
or the making of other distributions to, or the acquisition of, junior
stock; (vi) grant to the holders of the Preferred Stock of such series the
right to convert such stock into shares of another series or class of
capital stock; and (vii) grant such other special rights to the holders of
shares of such series as the Board of Directors may determine and as shall
not be inconsistent with the provisions of the Certificate of
Incorporation.
DIVIDENDS
Subject to any limitations specified in the certificate of designation
providing for the issuance thereof, the holders of the Preferred Stock of any
series shall be entitled to receive, when and as declared by the Board of
Directors, preferential dividends in cash, at the rate per annum, if any, fixed
for such series, payable on such dates as may be specified in the certificate of
designation providing for the issuance of Preferred Stock of such series, to
stockholders of record on a date, preceding each such dividend payment date,
fixed for the purpose by the Board of Directors in advance of payment of each
particular dividend. Each share of Preferred Stock shall rank on a parity with
each other share of Preferred Stock, irrespective of series, with respect to
preferential dividends accrued on the shares of such series, and no dividend
shall be declared or paid or set apart for payment for the Preferred Stock of
any series unless at the same time a dividend in like proportion to the
dividends accrued upon the Preferred Stock of each other series shall be
declared or paid or set apart for payment, as the case may be, on Preferred
Stock of each other series then outstanding; but this does not prevent the
authorization or issuance of one or more series of Preferred Stock bearing
dividends subject to contingencies as to the existence or amount of earnings of
the Company during one or more fiscal periods, or as to other events, to which
dividends on other series of Preferred Stock are not subject.
So long as any shares of Preferred Stock shall remain outstanding, in no
event shall any dividends whatsoever, whether in cash, stock or otherwise, be
paid or declared, or any distribution be made on any class of junior stock, nor
shall any shares of Preferred Stock (subject to certain limited exceptions) or
junior stock be purchased, retired or otherwise acquired for a valuable
consideration by the Company, unless all dividends accrued on outstanding shares
of Preferred Stock for all past dividend periods shall have been paid, or
declared and a sum sufficient for the payment thereof set apart.
The ability of the Company, as a holding company, to pay dividends on the
Preferred Stock will depend upon the payment of dividends, interest or other
charges by subsidiaries to it. Debt instruments of certain subsidiaries of the
Company limit the amount of payments to the Company which could affect the
amount of funds available to the Company to pay dividends on the Preferred
Stock.
First Chicago Trust Company of New York is the registrar, transfer agent
and dividend disbursing agent for the shares of the Preferred Stock.
REDEMPTION
The Company, at the option of the Board of Directors, may redeem all or any
part of the Preferred Stock of any series which by its terms is redeemable, at
the time or times and on the terms and conditions fixed for such series, upon
notice duly given in the manner provided in the certificate of designation
providing for such
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series, by paying therefor in cash the sum fixed for such series, together, in
each case, with an amount equal to accrued and unpaid dividends thereon. The
certificate of designation providing for a series subject to redemption may
provide that when notice of redemption of all or part of the shares of such
series shall have been given, and the redemption price of such shares, together
with accrued dividends to the date fixed as the redemption date, has been set
aside by the Company, or deposited with a suitable depositary, for the pro rata
benefit of the holders of the shares called for redemption, then the shares so
called shall no longer be deemed outstanding, and all rights with respect to
such shares, including the accrual of further dividends, other than the right to
receive the redemption price of such shares without interest, shall cease.
VOTING RIGHTS
Except as stated herein or expressly provided by law or except as may be
provided for any series of Preferred Stock by the certificate of designation
relating thereto, the Preferred Stock shall have no right or power to vote on
any question or in any proceeding or to be represented at or to receive notice
of any meeting of stockholders. On any matters on which the holders of the
Preferred Stock or any series thereof shall be entitled to vote separately as a
class or series, they shall be entitled to one vote for each share held.
So long as any shares of Preferred Stock are outstanding, the Company shall
not, without the consent of the holders of at least a majority of the number of
shares of the Preferred Stock at the time outstanding, given in person or by
proxy, either in writing or by vote at any annual meeting, or any special
meeting called for the purpose, purchase, redeem or otherwise acquire for value
any shares of the Preferred Stock or of any other stock ranking on a parity with
the Preferred Stock in respect of dividends or distribution of assets on
liquidation during the continuance of any default in the payment of dividends on
the Preferred Stock.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution or winding up of the affairs
of the Company, voluntary or involuntary, then, before any distribution or
payment can be made to the holders of any class of stock of the Company ranking
junior to the Preferred Stock as to dividends or distribution of assets on
liquidation, the holders of the Preferred Stock of the respective series shall
be entitled to be paid in full the respective amount fixed, with respect to
liquidation, dissolution or winding up, voluntary or involuntary, as the case
may be, in the certificate of designation providing for the issue of shares of
such series, plus a sum equal to all accrued and unpaid dividends thereon to the
date of payment thereof. After such payment shall have been made in full to the
holders of the Preferred Stock, the remaining assets and funds of the Company
shall be distributed among the holders of the stocks of the Company ranking
junior to the Preferred Stock according to their respective rights. In the event
that the assets of the Company available for distribution to holders of
Preferred Stock shall not be sufficient to make the payment herein required to
be made in full, such assets shall be distributed to the holders of the
respective shares of Preferred Stock pro rata in proportion to the amounts
payable upon each share thereof.
PLAN OF DISTRIBUTION
The Company may sell the Securities in the following ways: (i) through
agents; (ii) through underwriters; (iii) through dealers; and (iv) directly to
purchasers.
Offers to purchase the Securities may be solicited by agents designated by
the Company from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the offer
or sale of the Securities in respect of which this Prospectus is delivered will
be named, and any commissions payable by the Company to such agent set forth, in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
If any underwriters are utilized in the sale, the Company will enter into
an underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the
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<PAGE> 25
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make resales to the public of the Securities in respect
of which this Prospectus is delivered.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
The Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("remarketing firms"), acting as principals for their own
accounts or as agents for the Company. Any remarketing firm will be identified
and the terms of its agreement, if any, with the Company and its compensation
will be described in the Prospectus Supplement. Remarketing firms may be deemed
to be underwriters in connection with the Securities remarketed thereby.
Remarketing firms may be entitled under agreements which may be entered into
with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for the Company in
the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters or dealers to solicit offers by certain purchasers to
purchase the Securities from the Company at the public offering price set forth
in the Prospectus Supplement pursuant to delayed delivery contracts providing
for payment and delivery on a specified date in the future. Such contracts will
be subject to only those conditions set forth in the Prospectus Supplement, and
the Prospectus Supplement will set forth the commission payable for solicitation
of such offers.
Each series of Offered Debt Securities will be a new issue of securities
and will have no established trading market. Such Offered Debt Securities may or
may not be listed on a national securities exchange. No assurance can be given
as to the liquidity of or the existence of trading markets for any Offered Debt
Securities.
EXPERTS
The consolidated financial statements and schedule of the Company appearing
in the Company's Annual Report (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. Such
consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements and schedules of the Company included
in or incorporated by reference in any documents filed pursuant to Section 13,
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering will be so included or incorporated by reference
in reliance upon the reports of independent auditors pertaining to such
financial statements (to the extent covered by consents filed with the
Securities and Exchange Commission) given upon the authority of such independent
auditors as experts in accounting and auditing.
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LEGAL MATTERS
Certain legal matters in connection with the Securities offered hereby will
be passed upon for the Company by William G. von Glahn, Senior Vice President
and General Counsel of Williams, and for the Underwriters by Davis Polk &
Wardwell, New York, New York. Mr. von Glahn beneficially owns approximately
28,331 shares of Williams' Common Stock and also has exercisable options to
purchase an additional 29,260 shares of Williams' Common Stock. Pursuant to
their By-laws, the Company and Williams are required to indemnify Mr. von Glahn
to the fullest extent permitted by Delaware law against any expenses actually
and reasonably incurred by him in connection with any action, suit or proceeding
in which he is made party by reason of his being an officer of the Company. The
Company, through Williams, also maintains directors' and officers' liability
insurance under which Mr. von Glahn is insured against certain expenses and
liabilities.
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$425,000,000
WILLIAMS HOLDINGS OF DELAWARE, INC.
$175,000,000 6.125% Notes due 2003
$250,000,000 6.500% Notes due 2008
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PROSPECTUS SUPPLEMENT
December 3, 1998
(Including Prospectus dated September 15, 1997)
------------------
Joint Book-Running Managers
CHASE SECURITIES INC. SALOMON SMITH BARNEY
NATIONSBANC MONTGOMERY SECURITIES LLC
ABN AMRO INCORPORATED
CIBC OPPENHEIMER
CREDIT LYONNAIS SECURITIES (USA) INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
NESBITT BURNS SECURITIES INC.
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