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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
(Amendment No. 2)
_______________
TRANSCO ENERGY COMPANY
(Name of Subject Company)
TRANSCO ENERGY COMPANY
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.50 PER SHARE
(AND ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
89353210
(CUSIP Number of Class of Securities)
DAVID E. VARNER, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
TRANSCO ENERGY COMPANY
P.O. BOX 1396
2800 POST OAK BLVD.
HOUSTON, TEXAS 77251
(713) 439-2388
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
ERIC S. ROBINSON, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
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This Amendment No. 2 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 of Transco Energy
Company, a Delaware corporation (the "Company"), filed with the Securities and
Exchange Commission on December 16, 1994, as amended (as amended, the "Schedule
14D-9"), relating to the tender offer made by The Williams Companies, Inc., a
Delaware corporation, disclosed in a Tender Offer Statement on Schedule 14D-1
dated December 16, 1994, to purchase up to 24,600,000 shares of the Company's
common stock, par value $.50 per share, and the associated common stock purchase
rights.
1. Item 9 is hereby amended and supplemented by adding the following exhibits:
(28) Letter to participants in the Tran$tock Employee
Stock Ownership Plan, dated December 22, 1994
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
TRANSCO ENERGY COMPANY
By /s/ David E. Varner
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Name: David E. Varner
Title: Senior Vice President,
General Counsel and Secretary
Date: December 22, 1994
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IMMEDIATE ATTENTION REQUIRED
December 22, 1994
Re: Tender Offer Directions
Dear Participant in Tran$tock:
The attached package contains very important information about the proposed
transaction (the "Transaction") between Transco Energy Company ("Transco" or
the "Company") and The Williams Companies, Inc. ("Williams"). The Transaction
will directly affect your interest in your Accounts under the Tran$tock
Employee Stock Ownership Plan (the "Plan"). The enclosed materials include
Williams' Offer to Purchase and Transco's Solicitation/Recommendation Statement
on Schedule 14D-9, which have been furnished by Williams and Transco,
respectively. PLEASE READ ALL OF THE ENCLOSED MATERIALS CAREFULLY.
As more fully described below and in the enclosed package, the first step of
the Acquisition will be a Tender Offer--that is, an offer by Williams to
purchase Transco Common Stock ("Transco Stock"). As a participant in the Plan,
you have the right to direct the trustee of the Plan, the Bank of New York (the
"Trustee"), whether or not to tender the Transco Stock in your Savings and
Incentive Accounts (collectively, the "Accounts") in the Plan.
After reading these materials, you should complete the enclosed Direction
Form and return it in the postage-paid envelope that is provided. In order to
ensure that your directions to the Trustee remain confidential, all Direction
Forms will be returned directly to the Trustee. YOUR COMPLETED DIRECTION FORM
MUST BE RECEIVED BY THE TRUSTEE BEFORE 12 MIDNIGHT EASTERN STANDARD TIME ON
JANUARY 11, 1995.
Please note that a Direction Form that is postmarked before this deadline but
actually received by the Trustee after the deadline will not be effective. Mail
your form early enough for it to be received by the Trustee before the
deadline.
IF YOUR DIRECTION FORM IS NOT RECEIVED BY THE TRUSTEE BEFORE 12 MIDNIGHT
EASTERN STANDARD TIME ON JANUARY 11, 1995, THE TRUSTEE WILL DETERMINE WHETHER
OR NOT TO TENDER (OFFER TO SELL TO WILLIAMS) ANY OR ALL OF THE TRANSCO STOCK
HELD IN YOUR ACCOUNTS IN THE PLAN, BASED UPON WHAT IT DETERMINES TO BE IN YOUR
BEST ECONOMIC INTERESTS AS A PARTICIPANT IN THE PLAN.
Please note that your instructions to the Trustee will be kept confidential;
no one at Transco or Williams will be informed of your decision on how to
instruct the Trustee.
SUMMARY OF PROPOSED TRANSACTION
The proposed acquisition of Transco by Williams will take place in two steps,
each of which is more fully described in the enclosed materials:
Step One: Williams has made a TENDER OFFER to buy up to 60 percent of the
outstanding Transco Stock for $17.50 per share, subject to the conditions
described below and in the enclosed package (the "Tender Offer").
Step Two: If Williams completes its proposed purchase of Transco Stock in
the Tender Offer and the other conditions more fully described in the
enclosed package are satisfied, Williams will later acquire the remaining
outstanding Transco Stock through a MERGER of a subsidiary of Williams into
Transco (the "Merger"), in which each share of Transco Stock (other than
the shares purchased by Williams in the Tender Offer) will be converted
into 0.625 shares of Williams common stock (or a combination of Williams
common stock and cash if less than 60 percent of the Transco Stock is
purchased in the Tender Offer). The Merger is expected to occur in the
spring of 1995. A package regarding the Merger will be mailed to Transco
stockholders after the Tender Offer is completed.
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At this time, you have the opportunity to determine how to respond to Step
One, the Tender Offer. By completing the attached Direction Form in accordance
with the instructions set forth below, you may direct the Trustee of the Plan
whether to tender all, some, or none of the Transco Stock held in your Accounts
in the Plan.
HOW THE TENDER OFFER WORKS
Everyone who owns Transco Stock, including employee benefit plans such as the
Plan, may tender their Transco Stock--offer to sell it to Williams. THE TENDER
OFFER IS CURRENTLY SCHEDULED TO EXPIRE AT 12 MIDNIGHT EASTERN STANDARD TIME ON
TUESDAY, JANUARY 17, 1995, BUT THE TENDER OFFER MAY BE EXTENDED.
PLEASE NOTE THAT YOU CANNOT TENDER THE TRANSCO STOCK IN YOUR ACCOUNTS IN THE
PLAN DIRECTLY TO WILLIAMS. INSTEAD, IF YOU WANT THAT STOCK TO BE TENDERED, YOU
MUST USE THE ENCLOSED DIRECTION FORM.
As explained in more detail in the enclosed package, there are a number of
conditions that must be met for Williams to be obligated to buy Transco Stock.
Most importantly, if the Transco Stock that is tendered to Williams by Transco
stockholders represents less than 51 percent of the outstanding Transco Stock,
Williams is not obligated to buy any Transco Stock. On the other hand, if the
Transco Stock that is tendered to Williams represents more than 60 percent of
the outstanding Transco Stock, then Williams will pay cash for 60 percent by
purchasing from each tendering stockholder the same percentage of the Transco
Stock tendered by each of them; and the rest of the stock tendered by Transco
stockholders will not be bought in the Tender Offer, but will be converted into
Williams common stock as set forth below.
THUS, THERE IS NO ASSURANCE THAT ANY OR ALL OF THE TRANSCO STOCK HELD IN YOUR
ACCOUNTS IN THE PLAN WILL BE PURCHASED BY WILLIAMS PURSUANT TO THE TENDER
OFFER, EVEN IF YOU DIRECT THE TRUSTEE TO TENDER ALL OF THAT TRANSCO STOCK. IN
ADDITION, IF CERTAIN CONDITIONS ARE NOT MET, THERE IS NO ASSURANCE THAT ANY
TRANSCO STOCK WILL BE PURCHASED.
As noted above, if your Direction Form is not received by the Trustee before
12 midnight Eastern Standard Time on January 11, 1995, the Trustee will
determine whether or not to tender the Transco Stock held in your Accounts in
the Plan based upon what it determines to be in your best economic interests as
a participant in the Plan. In addition, the Trustee may override any
participant direction that it determines to be in violation of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), although it is
not expected that any direction will violate ERISA.
INVESTMENT OF TENDER OFFER PROCEEDS
Williams will pay cash to the Trustee for all Transco Stock held in your
Accounts in the Plan that is actually purchased pursuant to the Tender Offer.
The proceeds will then be reinvested by the Trustee in an interest-bearing
account until the Merger. The proceeds will remain in the interest-bearing
account until the proposed Merger is completed, unless you request a withdrawal
from the Plan in accordance with your rights under the terms of the Plan. After
the Merger, any remaining cash proceeds not withdrawn, together with any income
thereon, will be reinvested in common stock of Williams at the then-current
market price. Any Transco Stock that is not purchased in the Tender Offer and
is not withdrawn from your Accounts in the Plan will also be converted into
Williams common stock at the time of the Merger at the ratio of 0.625 shares of
Williams common stock per share of Transco Stock.
EFFECT OF PROPOSED ACQUISITION ON PREVIOUSLY-ANNOUNCED CHANGES
You have previously received a memorandum dated November 2, 1994 informing
you of the planned merger of the Plan into the Thrift Plan, effective as of
January 1, 1995 (the "Plan Merger"). Active participants were given the
opportunity to withdraw from their Savings Account in the Plan, and
terminated/retired participants were allowed to withdraw their vested account
balances. Incentive Account balances for active participants will be
transferred directly to the Company's Thrift Plan.
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Because of the announcement of the Tender Offer and the Acquisition, certain
modifications are being made to the timing of the Plan Merger, so as to give
you the opportunity to participate in the Tender Offer. The Plan Merger will
not be effective as of January 1, 1995, but will take place as soon as
practicable after the completion of the Tender Offer. Plan participants will
then have the opportunity prior to the Plan Merger to make withdrawals from the
Plan. The deadline for active participants' elections for withdrawals from
their Savings Account balances and terminated/retired participants' elections
to withdraw their vested account balances is being postponed to a date in
February 1995, which has not been determined. All participants will receive a
new election form and information package for Savings Account withdrawals (for
employee participants) and distributions (for terminated/retired participants).
Any withdrawal or distribution election form that you may have already returned
has been automatically cancelled.
The sale in the Tender Offer of any Transco Stock that is held in your
Accounts in the Plan will not cause any suspension of your future Company
matching contributions in the Thrift Plan. However, as previously announced,
any election to make a withdrawal of cash or stock from your Savings Account
will cause a six-month suspension of the Company matching contribution in the
Thrift Plan.
PROCEDURE FOR DIRECTING TRUSTEE
A Direction Form for you to use to direct the Trustee is enclosed. In order
to be effective, this form must be properly completed and returned in the
enclosed envelope in time to be received by the Trustee before 12 midnight
Eastern Standard Time on January 11, 1995. A form that is postmarked before
this deadline but actually received after the deadline will be too late and
will not be effective.
Please note the address label on the reverse side of the Direction Form; it
indicates the number of shares of Transco Stock allocated to your Accounts in
the Plan as of December 16, 1994. In addition to these shares, prior to the
time Williams makes its purchases under the Tender Offer, you will be entitled
to receive the 1994 allocation of Transco Stock to your Accounts in the Plan as
of December 31, 1994 (as more fully explained in prior communications). It is
not possible at this time to determine the number of shares that will be
allocated to you for the 1994 Plan year. However, you will be informed in early
January 1995 of the number of additional shares allocated to you. In addition,
if you direct that all of the Transco Stock in your Accounts be tendered, the
Trustee will interpret that direction as including the shares from the 1994
allocation that are to be added to your account as of December 31, 1994. If you
direct a specific number of shares to be tendered, the Trustee will not include
the shares from the 1994 allocation.
To properly complete your Direction Form, you must do the following:
(1) (A) Check Box 1 or Box 2 to direct whether to tender your Incentive
Account shares. CHECK ONLY ONE OF BOX 1 OR 2.
. CHECK BOX 1 if you want some or all of the Transco Stock held in your
Incentive Account in the Plan to be tendered, AND fill in the number
of shares that you want to be tendered, or state "All."
. CHECK BOX 2 if you do not want any of the Transco Stock held in your
Incentive Account in the Plan to be tendered.
(B) Check Box 3 or Box 4 to direct whether to tender your Savings Account
shares. CHECK ONLY ONE OF BOX 3 OR 4.
. CHECK BOX 3 if you want some or all of the Transco Stock held in your
Savings Account in the Plan to be tendered, AND fill in the number of
shares that you want to be tendered, or state "All."
. CHECK BOX 4 if you do not want any of the Transco Stock held in your
Savings Account in the Plan to be tendered.
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(2) Sign and date the Direction Form in the spaces provided at the bottom.
(3) Keep a copy of your Direction Form for your records.
(4) Mail the Direction Form promptly in the postage-paid envelope that is
provided. Faxed forms are not acceptable.
REMEMBER, THE TRUSTEE MUST RECEIVE YOUR FORM BEFORE 12 MIDNIGHT EASTERN
STANDARD TIME ON JANUARY 11, 1995.
Your Direction Form will be deemed irrevocable unless you send a new, later-
dated Direction Form that is received by the Trustee before 12 midnight Eastern
Standard Time on January 11, 1995 at the following address:
THE BANK OF NEW YORK
EQUITY TENDER & EXCHANGE DEPARTMENT
CHURCH STREET STATION
P.O. BOX 11248
NEW YORK, N.Y. 10286-1248
In order to be effective, your later-dated Direction Form must be properly
completed, include your name, address, Social Security number, and the number
of shares allocated to your Accounts in the Plan as set forth on the address
label to your original Direction Form, and be received by the Trustee before 12
midnight Eastern Standard Time on January 11, 1995. Otherwise, your earlier
Direction Form will still be in effect. Additional Direction Forms and mailing
envelopes can be obtained by calling the Bank of New York's Equity Tender and
Exchange Department at 1-800-507-9357.
Neither the Company nor the Trustee can make recommendations to you regarding
what decision to make. However, if you have questions about the procedure for
directing the Trustee, please contact the Bank of New York's Equity Tender and
Exchange Department at 1-800-507-9357. If you have questions about the terms
and conditions of the Tender Offer, please contact the Information Agent for
the Tender Offer, Morrow & Co., Inc., at 1-800-566-9058.
