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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 17, 1995
REGISTRATION NO. 33-60397
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE WILLIAMS COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 73-0569878
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
------------------------
ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(918) 588-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
------------------------
J. FURMAN LEWIS, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
THE WILLIAMS COMPANIES, INC.
ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(918) 588-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
KEITH L. KEARNEY, ESQ.
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
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If any of the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: / /
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CROSS REFERENCE SHEET
S-4 ITEM NUMBER AND CAPTION PROSPECTUS
------------------------------------------- -------------------------------------------
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus..... Facing Page; Cross Reference Sheet; Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus.............................. Available Information; Incorporation of
Certain Documents by Reference; Table of
Contents
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information.............. Prospectus Summary; Risk Factors; Special
Factors; Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividend
Requirements
4. Terms of the Transaction................... Prospectus Summary; Risk Factors; Special
Factors; The Exchange Offer; Description of
Debentures; Description of the Preferred
Stock; Certain United States Federal Income
Tax Consequences
5. Pro Forma Financial Information............ Capitalization
6. Material Contacts with the Company Being
Acquired................................... *
7. Additional Information Required for
Reoffering by Persons and Parties Deemed to
be Underwriters............................ *
8. Interests of Named Experts and Counsel..... Legal Opinions; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ *
10. Information with Respect to S-3
Registrants................................ Incorporation of Certain Documents by
Reference; The Company; Capitalization;
Market and Trading Information; Description
of Debentures; Description of the Preferred
Stock
11. Incorporation of Certain Information by
Reference.................................. Incorporation of Certain Documents by
Reference
12. Information with Respect to S-2 or S-3
Registrants................................ *
13. Incorporation of Certain Information by
Reference.................................. *
14. Information with Respect to Registrants
Other Than S-3 or S-2 Registrants.......... *
15. Information with Respect to S-3
Companies.................................. *
16. Information with Respect to S-2 or S-3
Companies.................................. *
17. Information with Respect to Companies Other
Than S-3 or S-2 Companies.................. *
18. Information if Proxies, Consents or
Authorizations are to be Solicited......... *
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or
in an Exchange Offer....................... *
- ---------------
* Item is omitted because answer is negative or item is inapplicable.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY , 1995
PROSPECTUS
THE WILLIAMS COMPANIES, INC.
OFFER TO EXCHANGE
% QUARTERLY INCOME CAPITAL SECURITIES (QUICSSM)
(SUBORDINATED DEBENTURES, DUE 2025)
FOR
$2.21 CUMULATIVE PREFERRED STOCK
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THE EXCHANGE OFFER AND THE WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1995, UNLESS EXTENDED.
------------------------
The Williams Companies, Inc. (the "Company") hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus (the "Prospectus")
and in the accompanying Letter of Transmittal (the "Letter of Transmittal",
which together with the Prospectus, constitute the "Exchange Offer"), to
exchange up to $90,752,500 aggregate principal amount of its % Quarterly
Income Capital Securities (the "Debentures") (equivalent to $ per $25
principal amount of Debentures) for up to 3,630,100 shares of its $2.21
Cumulative Preferred Stock, $1.00 par value (the "Preferred Stock"), which
constitute all outstanding shares of the Preferred Stock as of the date of this
Prospectus.
The Debentures are offered in minimum denominations of $25 and integral
multiples thereof, and the shares of the Preferred Stock have a liquidation
preference of $25 per share. Consequently, the Exchange Offer will be effected
on the basis of $25 principal amount of Debentures for each share of Preferred
Stock validly tendered and accepted for exchange. As part of the Exchange Offer,
holders of shares of the Preferred Stock accepted for exchange in the Exchange
Offer will be entitled to receive cash equal to the accrued and unpaid dividends
on such shares accumulating after June 1, 1995 (the most recent dividend payment
date) to the Issuance Date (as herein defined) in lieu of such dividends (such
amount, without interest, the "Payment in Lieu of Accumulated Dividends"),
payable on the Issuance Date to such holders.
THE EXCHANGE OFFER IS SUBJECT TO THE CONDITION THAT A MINIMUM OF 1,000,000
SHARES OF THE PREFERRED STOCK SHALL HAVE BEEN TENDERED AND NOT WITHDRAWN PRIOR
TO THE EXPIRATION OF THE EXCHANGE OFFER. THE EXCHANGE OFFER IS ALSO SUBJECT TO
CERTAIN ADDITIONAL CONDITIONS. SEE "THE EXCHANGE OFFER -- CONDITIONS OF THE
EXCHANGE OFFER".
Pursuant to the terms and subject to the conditions of the Exchange Offer,
the Company will accept for exchange any and all shares of the Preferred Stock
validly tendered and not properly withdrawn prior to 5:00 p.m., New York City
time, on , 1995 or if the Exchange Offer is extended by the Company,
in its sole discretion, the latest time and date to which it is extended (the
"Expiration Time"). Tenders of shares of the Preferred Stock pursuant to the
Exchange Offer are irrevocable, except that shares of the Preferred Stock
tendered pursuant to the Exchange Offer may be withdrawn at any time prior to
the Expiration Time and, unless theretofore accepted for exchange pursuant to
the Exchange Offer, may be withdrawn at any time after 40 business days from the
date of this Prospectus. A holder of shares of the Preferred Stock who desires
to tender such shares and whose certificates for such shares are not immediately
available, or who cannot comply in a timely manner with the procedure for
book-entry transfer, may tender such shares of the Preferred Stock by following
the procedures for guaranteed delivery set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures". For a description of the other terms
of the Exchange Offer, see "The Exchange Offer". The Company will pay to any
Soliciting Dealer (as herein defined) a solicitation fee of $.50 per share of
the Preferred Stock tendered and accepted for exchange pursuant to the Exchange
Offer, provided that the person tendering designates such Soliciting Dealer in
the Letter of Transmittal. See "The Exchange Offer -- Fees and Expenses".
See "Prospectus Summary -- Comparison of Debentures and Preferred Stock",
"Risk Factors" and "Special Factors" for a description of the principal terms of
and certain significant considerations relating to the Exchange Offer, the
Preferred Stock and the Debentures.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE THEIR SHARES OF
THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.
NEITHER THIS TRANSACTION NOR THESE SECURITIES HAVE BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR
MERITS OF THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY
OF THE INFORMATION CONTAINED IN THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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(SM) LEHMAN BROTHERS HAS APPLIED FOR A SERVICE MARK FOR QUICS.
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THE DEALER MANAGERS FOR THE EXCHANGE OFFER ARE:
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
SMITH BARNEY INC.
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The date of this Prospectus is , 1995.
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The Debentures will mature on , 2025 and will bear interest at an
annual rate of % from the first day following the Expiration Time (the
"Issuance Date"). In addition, as part of the Exchange Offer, holders of shares
of the Preferred Stock which are accepted for exchange will receive cash in the
amount of the Payment in Lieu of Accumulated Dividends, payable on the Issuance
Date. Interest on the Debentures will be unconditionally payable quarterly in
arrears on March 31, June 30, September 30 and December 31, commencing September
30, 1995 (each an "Interest Payment Date"). If the Company fails to make an
interest payment on any Interest Payment Date, the Company will be subject to a
penalty (the "Late Payment Penalty"). The Late Payment Penalty will consist of
the following elements: (i) the Company shall be obligated to pay the holders of
Debentures, in addition to the amount of accrued and unpaid interest which is
due on the relevant Interest Payment Date (the "Overdue Interest"), an amount
equal to %, per annum, on the Overdue Interest, calculated from the
relevant Interest Payment Date to the date on which the Company pays the Overdue
Interest (the "Late Payment Period"), compounded quarterly and payable when such
Overdue Interest is paid, and (ii) the Company shall not declare or pay any
dividend on, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its Capital Stock or make any guarantee payments with respect
to the foregoing (each, a "Capital Stock Payment") during such Late Payment
Period. All series of the Company's preferred stock, common stock and any other
equity securities of the Company are referred to herein as "Capital Stock".
Because of the impact of the Late Payment Penalty, the Company believes
that it is unlikely that it will fail to make any interest payment when due.
However, if the Company were to fail to make an interest payment when due, the
market price of the Debentures would likely be adversely affected. A failure by
the Company to make interest payments for 20 consecutive quarterly interest
payment periods shall constitute an Event of Default (as hereinafter defined)
as of the last day of such 20th consecutive interest payment period.
The Debentures are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness (as hereinafter
defined) of the Company, but senior to all Capital Stock of the Company,
including the Preferred Stock. On May 2, 1995, approximately $1.5 billion of
such Senior Indebtedness was outstanding. In addition, the Debentures will also
be effectively subordinate to all existing and future obligations of the
Company's subsidiaries. On May 2, 1995 approximately $1.5 billion of
indebtedness of the Company's subsidiaries not included in Senior Indebtedness
was outstanding. See "Description of Debentures -- Subordination" and
"Capitalization".
Because the Company is a holding company that conducts business through its
subsidiaries, the ability of the Company to pay principal of and interest on the
Debentures is, to a large extent, dependent upon the Company's receipt of
dividends or other payments from its subsidiaries.
The Debentures will be redeemable at the option of the Company, in whole or
in part, at any time on or after September 1, 1997 (which is the same date after
which the shares of the Preferred Stock are first redeemable at the option of
the Company), at a redemption price equal to 100% of the principal amount
redeemed ($25 for each $25 principal amount of Debentures) plus accrued and
unpaid interest to the date fixed for redemption. See "Description of
Debentures -- Optional Redemption".
For federal income tax purposes, the exchange of the shares of the
Preferred Stock for Debentures will be a taxable transaction. For a discussion
of this and other United States federal income tax considerations relevant to
the Exchange Offer, see "Certain United States Federal Income Tax Consequences".
The shares of the Preferred Stock are listed and principally traded on the
New York Stock Exchange (the "NYSE"). On July , 1995, the last full day of
trading prior to the commencement of the Exchange Offer, the closing sales price
of the shares of the Preferred Stock on the NYSE as reported on the Composite
Tape was $ per share. Holders of shares of the Preferred Stock are urged to
obtain current market quotations therefor.
The Debentures constitute a new issue of debt securities with no
established trading market. While the Company intends to apply for listing of
the Debentures on the NYSE, there can be no assurance that an active market for
the Debentures will develop or be sustained in the future on the NYSE. Moreover,
to the extent
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that shares of the Preferred Stock are tendered and accepted in the Exchange
Offer, the liquidity and trading market for the Preferred Stock could be
adversely affected.
Lehman Brothers, Morgan Stanley & Co. Incorporated and Smith Barney Inc.
(the "Dealer Managers") are acting as Dealer Managers for the Exchange Offer.
The Dealer Managers have agreed to use their best efforts to solicit the
exchange of the shares of the Preferred Stock pursuant to the Exchange Offer.
First Chicago Trust Company of New York (the "Exchange Agent") is acting as
Exchange Agent in connection with the Exchange Offer and Morrow & Co., Inc. (the
"Information Agent") is acting as Information Agent in connection with the
Exchange Offer.
Questions and requests for assistance may be directed to the Dealer
Managers or the Information Agent, as set forth on the back cover of this
Prospectus. Requests for or additional copies of this Prospectus, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be directed to the
Information Agent.
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NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING THE
SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER. NO PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THE EXCHANGE OFFER, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MAY
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
THE COMPANY IS NOT AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF THE
EXCHANGE OFFER IS NOT IN COMPLIANCE WITH APPLICABLE LAW. IF THE COMPANY BECOMES
AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF THE EXCHANGE OFFER WOULD NOT BE
IN COMPLIANCE WITH APPLICABLE LAW, THE COMPANY WILL MAKE A GOOD FAITH EFFORT TO
COMPLY WITH SUCH LAW. IF, AFTER SUCH GOOD FAITH EFFORT, THE COMPANY CANNOT
COMPLY WITH ANY SUCH LAW, THE EXCHANGE OFFER WILL NOT BE MADE TO (NOR WILL
TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS RESIDING IN SUCH
JURISDICTIONS. IN ANY JURISDICTION WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS
REQUIRE THE EXCHANGE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE
EXCHANGE OFFER WILL BE DEEMED TO BE MADE ON BEHALF OF THE COMPANY BY THE DEALER
MANAGERS OR ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF
SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-4 (the "Registration
Statement", which term shall encompass all amendments, exhibits, annexes and
schedules thereto) pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). The Company has filed an Issuer Tender Offer Statement on
Schedule 13E-4 (the "Schedule 13E-4", which term shall encompass all amendments
exhibits, annexes and schedules thereto) and a Transaction Statement on Schedule
13E-3 (the "Schedule 13E-3", which term shall encompass all amendments exhibits,
annexes and schedules thereto) with the Commission under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which include certain additional
information relating to the Exchange Offer, and the rules and regulations
promulgated thereunder, covering the Debentures being offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, the Schedule 13E-4 and the Schedule 13E-3, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and to
which reference is hereby made. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
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The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith files periodic reports and other
information with the Commission. The Registration Statement, as well as such
reports and other information filed by the Company with the Commission, may be
inspected at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at the regional offices of
the Commission located at 7 World Trade Center, Suite 1300, New York, New York
10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Certain of the securities of the Company are listed on the NYSE and the
Pacific Stock Exchange Inc. Reports and other information concerning the Company
can also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005 and the Pacific Stock Exchange, Inc., 301 Pine Street, San Francisco,
California 90014.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents are available from The Williams
Companies, Inc., One Williams Center, Tulsa, Oklahoma 74172, (918) 588-2000,
Attention: Corporate Secretary. In order to ensure timely delivery of the
documents, any request should be made not later than five business days prior to
the Expiration Time.
The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference in
this Prospectus:
1. the Company's Annual Report on Form 10-K for the year ended
December 31, 1994;
2. the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995;
3. the Company's Current Reports on Form 8-K dated January 11, 1995,
January 31, 1995 and May 4, 1995;
4. the Company's Current Report on Form 8-K/A dated March 29, 1995,
excluding item 8 of Transco Energy Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, which 10-K is incorporated by
reference in the Form 8-K/A; and
5. the Proxy Statement of the Company dated March 18, 1995.
Each document filed by the Company pursuant to Section 13, 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the Exchange Offer pursuant hereto shall be deemed to be
incorporated by reference in this Prospectus and to be a part of this Prospectus
from the date of filing of such document. Any statement contained in this
Prospectus or in a document incorporated or deemed to be incorporated by
reference in this Prospectus shall be deemed to be modified or superseded for
purposes of the Registration Statement and this Prospectus to the extent that a
statement contained in this Prospectus, or in any subsequently filed document
that also is or is deemed to be incorporated by reference in this Prospectus,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
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TABLE OF CONTENTS
PAGE
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Available Information................................................................. ii
Incorporation of Certain Documents by Reference....................................... iii
Prospectus Summary.................................................................... 1
Comparison of Debentures and the Preferred Stock...................................... 7
Risk Factors.......................................................................... 9
Special Factors....................................................................... 10
The Company........................................................................... 13
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividend
Requirements........................................................................ 14
Capitalization........................................................................ 14
The Exchange Offer.................................................................... 15
Market and Trading Information........................................................ 24
Transactions and Arrangements Concerning the Shares of the Preferred Stock............ 25
Certain United States Federal Income Tax Consequences................................. 25
Description of Debentures............................................................. 29
Description of the Preferred Stock.................................................... 35
Legal Opinions........................................................................ 36
Experts............................................................................... 36
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PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in
its entirety by the detailed information appearing elsewhere in this Prospectus
or by documents incorporated by reference into the Prospectus. Capitalized terms
used herein have the respective meanings ascribed to them elsewhere in this
Prospectus.
THE COMPANY
The Company, through subsidiaries, is engaged in the transportation and
sale of natural gas and related activities, natural gas gathering and processing
operations, the transportation of petroleum products, the telecommunications
business and provides a variety of other products and services to the energy
industry and financial institutions. In January of 1995 the Company sold a major
portion of its telecommunications assets and in May of 1995 the Company
completed the acquisition of Transco Energy Company which, through its
subsidiaries, transports natural gas to markets in the eastern half of the
United States. The Company's subsidiaries currently own and operate: (i) four
interstate natural gas pipeline systems and have a fifty percent interest in a
fifth; (ii) a common carrier petroleum products pipeline system; and (iii)
natural gas gathering and processing facilities and production properties. The
Company also markets natural gas and natural gas liquids. The Company's
telecommunications subsidiaries offer data, voice and video-related products and
services and customer premises equipment nationwide. The Company also has
investments in the equity of certain other companies.
Prospective investors should carefully review the information contained
elsewhere in this Prospectus prior to making a decision regarding the Exchange
Offer and should particularly consider the following matters:
POTENTIAL BENEFITS TO EXCHANGING HOLDERS
- The annual interest rate on the Debentures will be %, (equivalent to
$ per $25 principal amount of Debentures) as compared with the
indicated annual dividend rate of $2.21 on the Preferred Stock. See
"Comparison of Debentures and Preferred Stock".
- The Debentures will rank senior to the shares of the Preferred Stock as
to payment in respect thereof and as to the distribution of assets upon
liquidation. However, the Debentures are unsecured obligations of the
Company and will be, and the shares of the Preferred Stock are,
subordinate in right to payment to all existing and future Senior
Indebtedness of the Company and effectively subordinated to all
obligations of the Company's subsidiaries. See "Risk
Factors -- Subordination of Debentures".
- While dividends on the shares of the Preferred Stock may be deferred
indefinitely, interest payments on the Debentures are unconditionally due
on each Interest Payment Date. Failure to make any interest payment when
due will subject the Company to the Late Payment Penalty during a Late
Payment Period, which includes an amount equal to %, per annum, on
the Overdue Interest, and failure to make interest payments for 20
consecutive interest payment periods will constitute an Event of Default.
Because of the impact of the Late Payment Penalty, the Company believes
that it is unlikely that it will fail to make an interest payment when
due. See "Risk Factors -- Possibility of Late Payment of Interest".
- In order to benefit from the higher annual interest rate on the
Debentures, holders of the shares of the Preferred Stock need not pay any
additional cash. Holders of shares of the Preferred Stock wishing to
participate in the Exchange Offer must tender their shares of the
Preferred Stock in accordance with the instructions contained in "The
Exchange Offer -- Procedure for Tendering Preferred Stock" and in the
Letter of Transmittal prior to the Expiration Time.
POTENTIAL RISKS TO EXCHANGING HOLDERS
- Failure by the Company to make an interest payment on any Interest
Payment Date will subject the Company to the Late Payment Penalty during
the Late Payment Period. However, such a failure to make an interest
payment will, in general, not result in an Event of Default unless the
Company has
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failed to make interest payments for 20 consecutive interest payment
periods. While the Company believes that it is unlikely that it will fail
to make any interest payment when due, if the Company were to fail to
make an interest payment when due, the market price of the Debentures
would likely be adversely affected.
- Participation in the Exchange Offer will be a taxable event. See "Certain
United States Federal Income Tax Consequences".
- While dividends on the shares of the Preferred Stock are eligible for the
dividends received deduction for corporate holders, interest on the
Debentures will not be eligible for the dividends received deduction for
corporate holders. The dividends received deduction is not applicable for
individual, non-corporate holders. See "Comparison of Debentures and
Preferred Stock".
- There has not been any public market for the Debentures. While the
Company intends to make an application for listing of the Debentures on
the NYSE, there can be no assurance that an active market for the
Debentures will develop or be sustained in the future on such exchange.
See "Risk Factors -- Listing and Trading of Debentures and Preferred
Stock".
OTHER CONSIDERATIONS
- Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet
the requirements of the NYSE for continued listing and may no longer
continue to be registered under the Exchange Act. As a result the
liquidity and trading market for the Preferred Stock could be adversely
affected. See "Special Factors -- Certain Effects of the Exchange Offer;
Plans of the Company after the Exchange Offer" and "Risk
Factors -- Listing and Trading of Debentures and Preferred Stock".
- Tendering holders will not be obligated to pay brokerage commissions or
fees to the Dealer Managers, the Exchange Agent, the Information Agent or
the Company or, subject to the instructions in the Letter of Transmittal
with respect to special issuance instructions, transfer taxes with
respect to the exchange of shares of the Preferred Stock pursuant to the
Exchange Offer. Tendering holders whose shares are held by a broker,
dealer, bank or trust company may, however, be charged a fee for services
rendered in connection with the Exchange Offer.
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The principal purpose of the Exchange Offer is to improve the Company's
after-tax cash flow by replacing shares of the Preferred Stock with Debentures.
The potential cash flow benefit to the Company arises because interest payable
on the Debentures will be deductible by the Company (as it accrues) for United
States federal income tax purposes, while dividends payable with respect to the
shares of the Preferred Stock are not deductible. See "Special
Factors -- Purpose of the Exchange Offer".
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions of the Exchange Offer, the
Company is offering to exchange up to $90,752,500 aggregate principal amount of
its Debentures for up to 3,630,100 shares of the Preferred Stock, which
constitute all outstanding shares of the Preferred Stock as of the date of this
Prospectus. Exchanges will be made on the basis of $25 principal amount of
Debentures for each share of the Preferred Stock validly tendered and accepted
for exchange. See "The Exchange Offer -- General".
Pursuant to the terms and subject to the conditions of the Exchange Offer,
the Company will accept for exchange any and all shares of the Preferred Stock
validly tendered and not properly withdrawn prior to the Expiration Time.
The Exchange Offer is subject to the condition that a minimum of 1,000,000
shares of the Preferred Stock shall have been tendered and not withdrawn prior
to the Expiration Date (the "Minimum Condition") and that the Debentures shall
have been accepted for listing on the NYSE. The Exchange Offer is also subject
to certain additional conditions. See "The Exchange Offer -- Conditions of the
Exchange Offer".
SECURITIES OFFERED
The Debentures will mature on , 2025 and will bear interest
at an annual rate of % from the Issuance Date. In addition, holders of
shares of the Preferred Stock accepted for exchange will receive cash in the
amount of the Payment in Lieu of Accumulated Dividends, payable on the Issuance
Date. Interest on the Debentures will be payable quarterly in arrears on March
31, June 30, September 30 and December 31, commencing September 30, 1995. If the
Company fails to make an interest payment on any Interest Payment Date, the
Company will be subject to the Late Payment Penalty. Because of the impact of
the Late Payment Penalty, the Company believes that it is unlikely that it will
fail to make any interest payment when due. However, if the Company were to fail
to make an interest payment when due, the market price of the Debentures would
likely be adversely affected. A failure by the Company to make interest payments
for 20 consecutive quarterly interest payment periods shall constitute an Event
of Default as of the last day of such 20th consecutive quarterly interest
payment period.
If the Company expects that interest will not be paid on any Interest
Payment Date, the Company shall give the holders of the Debentures and the
Trustee written notice prior to the earlier of (i) such Interest Payment Date
and (ii) the date the Company is required to give notice of the record date of
such interest payment to the NYSE or other applicable self-regulatory
organization or to the holders of the Debentures, but in any event such notice
shall be given not less than two Business Days prior to such record date. See
"Description of Debentures -- Quarterly Payments" and " -- Consequences of Late
Payment of Interest".
The Debentures are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness of the Company, but
senior to all Capital Stock of the Company, including the Preferred Stock. On
May 2, 1995, approximately $1.5 billion of such Senior Indebtedness was
outstanding. As the Debentures will be issued by the Company, the Debentures
will also be effectively subordinate to all obligations of the Company's
subsidiaries. On May 2, 1995, approximately $1.5 billion in indebtedness of the
Company's subsidiaries not included in Senior Indebtedness was outstanding. See
"Description of Deben-
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tures -- Subordination". The Debentures will be redeemable at the option of the
Company, in whole or in part, at any time on or after September 1, 1997 (which
is the same date after which the shares of the Preferred Stock are first
redeemable at the option of the Company), at a redemption price equal to 100% of
the principal amount redeemed plus accrued and unpaid interest to the date fixed
for redemption. If fewer than all the Debentures are redeemed, the Trustee under
the Indenture shall select an appropriate and fair manner pursuant to which the
Debentures shall be redeemed. See "Description of Debentures -- Optional
Redemption".
For federal income tax purposes, the exchange of shares of the Preferred
Stock for Debentures will be a taxable transaction. For a discussion of this and
other United States federal income tax considerations relevant to the Exchange
Offer, see "Certain United States Federal Income Tax Consequences".
EXPIRATION; EXTENSION; TERMINATION; AMENDMENT; WITHDRAWAL RIGHTS AND CONDITIONS
The Exchange Offer will expire at 5:00 p.m., New York City time on
, 1995, unless the Company, in its sole discretion, shall have extended the
period during which the Exchange Offer is open, in which event the Exchange
Offer will expire at the latest time and date as so extended by the Company. See
"The Exchange Offer -- Expiration; Extension; Termination; Amendment". Tenders
of shares of the Preferred Stock pursuant to the Exchange Offer are irrevocable,
except that shares of the Preferred Stock tendered pursuant to the Exchange
Offer may be withdrawn at any time prior to the Expiration Time and, unless
theretofore accepted for exchange pursuant to the Exchange Offer, may also be
withdrawn at any time after 40 business days from the date of this Prospectus.
See "The Exchange Offer -- Withdrawal Rights".
The Exchange Offer is subject to certain conditions, including the Minimum
Condition. See "The Exchange Offer -- Conditions of the Exchange Offer".
PROCEDURE FOR TENDERING
For shares of the Preferred Stock to be validly tendered pursuant to the
Exchange Offer, (i) the Letter of Transmittal or a facsimile thereof (all
references in this Prospectus to the Letter of Transmittal shall be deemed to
include a facsimile thereof) properly completed and duly executed in accordance
with the instructions contained herein and therein, together with any required
signature guarantees, or an Agent's Message (as hereinafter defined) in
connection with a book-entry transfer of shares of the Preferred Stock, must be
received by the Exchange Agent, at either of its addresses set forth on the back
cover page of this Prospectus and either (a) certificates for the shares of the
Preferred Stock must be received by the Exchange Agent at either address or (b)
such shares of the Preferred Stock must be transferred pursuant to the
procedures for book-entry transfer described herein and a confirmation of such
book-entry transfer must be received by the Exchange Agent, in each case prior
to the Expiration Time or (ii) the guaranteed delivery procedures described
herein must be complied with. See "The Exchange Offer -- General" and
"-- Procedure for Tendering Preferred Stock".
NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING SHARES OF THE
PREFERRED STOCK SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE
INFORMATION AGENT. SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.
SPECIAL PROCEDURE FOR BENEFICIAL OWNERS
Any beneficial owner whose shares of the Preferred Stock are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact such registered holder promptly and
instruct such registered holder to tender on such beneficial owner's behalf. If
such beneficial owner wishes to tender on its own behalf, such owner must, prior
to completing and executing a Letter of Transmittal and delivery of its shares
of Preferred Stock, either make appropriate arrangements to register ownership
of the Preferred Stock in such owner's name or obtain a properly completed stock
power from the registered holder. The transfer of registered ownership may take
considerable time and may not be
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able to be completed prior to the Expiration Date. See "The Exchange
Offer -- Procedure for Tendering Preferred Stock".
GUARANTEED DELIVERY PROCEDURES
If a holder desires to accept the Exchange Offer and time will not permit a
Letter of Transmittal or shares of the Preferred Stock to reach the Exchange
Agent before the Expiration Time or the procedure for book-entry transfer cannot
be completed on a timely basis, a tender may be effected in accordance with the
guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed
Delivery Procedures".
ACCRUED DIVIDENDS
Holders of shares of the Preferred Stock accepted for exchange pursuant to
the Exchange Offer will receive cash in the amount of the Payment in Lieu of
Accumulated Dividends, payable on the Issuance Date. See "The Exchange
Offer -- Accrued Dividends".
Dividends on shares of the Preferred Stock not exchanged in the Exchange
Offer will continue to accrue and be payable when, as and if declared in
accordance with their terms.
ACCEPTANCE OF SHARES AND DELIVERY OF DEBENTURES
Subject to the terms and conditions of the Exchange Offer, including the
reservation by the Company of the right to withdraw, amend or terminate the
Exchange Offer in certain circumstances and certain other rights, the Company
will accept for exchange shares of the Preferred Stock that are properly
tendered in the Exchange Offer and not withdrawn prior to the Expiration Time.
Subject to such terms and conditions, the Debentures issued pursuant to the
Exchange Offer will be issued as of the Issuance Date and will be delivered as
promptly as practicable following the Expiration Time. See "The Exchange
Offer -- General", "-- Expiration; Extension; Termination; Amendment" and
"-- Conditions of the Exchange Offer".
UNTENDERED SHARES OF THE PREFERRED STOCK
Holders of shares of the Preferred Stock who do not tender their shares in
the Exchange Offer will continue to hold such shares and will be entitled to all
of the rights and preferences, and will be subject to all of the limitations,
applicable thereto. Depending upon the number of shares of the Preferred Stock
exchanged pursuant to the Exchange Offer, the Preferred Stock may no longer meet
the requirements of the NYSE for continued listing and may no longer continue to
be registered under the Exchange Act. If, as a result of the exchange of shares
of the Preferred Stock pursuant to the Exchange Offer or otherwise, the shares
of the Preferred Stock no longer meet the requirements of the NYSE for continued
listing and the listing of the shares of the Preferred Stock is discontinued, or
if the shares no longer are registered under the Exchange Act, the market for
the Preferred Stock could be adversely affected. See "Special Factors -- Certain
Effects of the Exchange Offer; Plans of the Company after the Exchange Offer".
DEALER MANAGERS MARKET ACTIVITY
The Dealer Managers currently plan to make a market in the Debentures
following the completion of the Exchange Offer and may buy and sell the
Debentures on a "when and if issued" basis prior to the completion of the
Exchange Offer. However, there can be no assurance that the Dealer Managers will
engage in such activities or that any active market in the Debentures will
develop or be maintained.
EXCHANGE AGENT AND INFORMATION AGENT
First Chicago Trust Company of New York has been appointed as Exchange
Agent in connection with the Exchange Offer and Morrow & Co., Inc. has been
appointed as Information Agent in connection with the Exchange Offer. Questions
and requests for assistance, requests for additional copies of this Prospectus
or of the Letter of Transmittal and requests for Notices of Guaranteed Delivery
should be directed to the
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Information Agent. The addresses and telephone numbers of the Exchange Agent and
the Information Agent are set forth on the back cover page of this Prospectus.
DEALER MANAGERS
Lehman Brothers, Morgan Stanley & Co. Incorporated and Smith Barney Inc.
have been retained as Dealer Managers to solicit exchanges of shares of the
Preferred Stock for Debentures. Questions with respect to the Exchange Offer may
be directed to David B. Parsons, Lehman Brothers -- Liability Management Group,
at 1-800-438-3242 (toll-free) or 1-212-528-7581 (collect), Steven C. Sahara,
Morgan Stanley & Co. Incorporated -- Preferred Stock Group, at 1-800-422-6464
ext. 6620 (toll-free) or to Paul S. Galant -- Liability Management Group, Smith
Barney Inc., at 1-800-813-3754 (toll-free).
FEES AND EXPENSES
The expense of soliciting tenders of shares of the Preferred Stock will be
borne by the Company. Subject to the receipt of a Letter of Transmittal with the
part thereof entitled "Notice of Solicited Tenders" properly completed and duly
executed as described herein, the Company will pay to any Soliciting Dealer (as
hereinafter defined) a solicitation fee of $.50 per share of the Preferred Stock
tendered and accepted for exchange pursuant to the Exchange Offer. The Company
will pay all transfer taxes, if any, applicable to the exchange of shares of the
Preferred Stock pursuant to the Exchange Offer. See "The Exchange Offer -- Fees
and Expenses; Transfer Taxes".
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COMPARISON OF DEBENTURES AND THE PREFERRED STOCK
The following is a brief summary comparison of certain of the principal
terms of the Debentures and the Preferred Stock.
DEBENTURES PREFERRED STOCK
-------------------------------- --------------------------------
Interest/Dividend Rate... % annual interest (equivalent to $2.21 annual dividend, payable
$ per $25 principal quarterly out of funds legally
amount of Debentures) available therefor on December
unconditionally payable in 1, March 1, June 1 and September
arrears on December 31, March 1 of each year, when, as and if
31, June 30 and September 30 of declared by the Company's Board
each year, commencing September of Directors.
30, 1995. If the Company fails
to make an interest payment on
any Interest Payment Date, the
Company will be subject to the
Late Payment Penalty, which
requires the Company to pay the
holders of Debentures, in
addition to the Overdue
Interest, an amount of cash
equal to %, per annum, on the
Overdue Interest, compounded
quarterly, during the Late
Payment Period. Because of the
impact of the Late Payment
Penalty, the Company believes,
however, that it is unlikely
that it will fail to make any
interest payment when due.
Maturity................. , 2025 Not applicable. There is no
mandatory redemption or sinking
fund for the Preferred Stock.
Optional Redemption...... Redeemable at the option of the Redeemable at the option of the
Company at any time on or after Company at any time on or after
September 1, 1997, in whole or September 1, 1997, in whole or
in part, at a redemption price in part, at a redemption price
equal to 100% of the principal equal to $25 per share of
amount redeemed ($25 for each Preferred Stock plus accrued and
$25 principal amount of accumulated but unpaid dividends
Debentures) plus accrued and to the date fixed for
unpaid interest to the date redemption.
fixed for redemption.
Subordination............ Unsecured obligations of the Subordinate to claims of
Company and subordinated to all creditors, including holders of
existing and future Senior the Company's outstanding debt
Indebtedness of the Company, but securities, including the
senior to all Capital Stock of Debentures, but senior to the
the Company, including the common stock of the Company.
Preferred Stock. Effectively Effectively subordinated to all
subordinated to all obligations obligations of the Company's
of the Company's subsidiaries. subsidiaries.
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DEBENTURES PREFERRED STOCK
-------------------------------- --------------------------------
Voting Rights............ None. Non-voting, except that if
dividends are in arrears on any
series of preferred stock of the
Company for six quarters, the
holders of all series of the
Company's preferred stock,
voting separately as a class,
are entitled to elect two
additional members of the Board
of Directors of the Company.
New York Stock Exchange Application will be made to list The shares of the Preferred
Listing................ the Debentures on the NYSE. Stock are listed on the NYSE.
Dividends Received Interest on the Debentures will Dividends on the Preferred Stock
Deduction.............. not be eligible for the are eligible for the dividends
dividends received deduction for received deduction for corporate
corporate holders. The dividends holders. The dividends received
received deduction is not deduction is not applicable for
applicable for individual, individual, non- corporate
non-corporate holders. holders.
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RISK FACTORS
Prospective exchanging shareholders should carefully consider, in addition
to the other information set forth elsewhere in this Prospectus, the following
risk factors:
SUBORDINATION OF DEBENTURES
The Debentures are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness (as hereinafter
defined) of the Company, but senior to all Capital Stock of the Company,
including the Preferred Stock. On May 2, 1995, approximately $1.5 billion of
such Senior Indebtedness was outstanding. There are no terms in the Debentures
that limit the Company's ability to incur additional indebtedness, including
indebtedness that would rank senior to the Debentures. With respect to the
Debentures, the Indenture (as hereinafter defined) does not contain any
cross-defaults to any other indebtedness of the Company, and therefore, a
default with respect to, or the acceleration of, any such indebtedness will not
constitute an "Event of Default" with respect to the Debentures. An "Event of
Default" with respect to the Debentures would constitute an "Event of Default"
under certain outstanding debt agreements of the Company although a failure by
the Company to make an interest payment when due will constitute an Event of
Default only when and if the Company has failed to make interest payments with
respect to 20 consecutive Interest Payment Dates. As the Debentures will be
issued by the Company, the Debentures will also be effectively subordinate to
all obligations of the Company's subsidiaries. On May 2, 1995, approximately
$1.5 billion of indebtedness of the Company's subsidiaries not included in
Senior Indebtedness was outstanding. See "Description of Debentures" and
"Capitalization".
POTENTIAL MARKET VOLATILITY IN THE EVENT OF LATE PAYMENT OF INTEREST
If the Company fails to make an interest payment on any Interest Payment
Date, the Company will be subject to the Late Payment Penalty. Because of the
impact of the Late Payment Penalty, the Company believes that it is unlikely
that it will fail to make any interest payment when due. However, if the Company
were to fail to make an interest payment when due, the market price of the
Debentures would likely be adversely affected. A holder that disposes of its
Debentures during a Late Payment Period, therefore, may not receive the same
return on its investment as a holder that continues to hold its Debentures. A
failure by the Company to make interest payments for 20 consecutive quarterly
interest payment periods shall constitute an Event of Default as of the last day
of such 20th consecutive interest payment period.
CERTAIN LEGAL MATTERS; REGULATORY AND FOREIGN APPROVALS; NO APPRAISAL RIGHTS
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its exchange
of shares of the Preferred Stock for Debentures as contemplated in the Exchange
Offer or of any approval or other action by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the Company's exchange for or ownership of shares of the
Preferred Stock pursuant to the Exchange Offer. Should any such approval or
other action be required, the Company currently contemplates that it will seek
such approval or other action. The Company cannot predict whether it may
determine that it is required to delay the acceptance for exchange of, or
exchange for, shares of the Preferred Stock tendered pursuant to the Exchange
Offer pending the outcome of any such matter. There can be no assurance that any
such approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to the Company's
business. The Company intends to make all required filings under the Exchange
Act.
There is no shareholder vote required in connection with the Exchange
Offer.
No appraisal rights are available to holders of shares of the Preferred
Stock in connection with the Exchange Offer.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
For federal income tax purposes, the exchange of the shares of the
Preferred Stock for Debentures will be a taxable transaction. While dividends on
the shares of the Preferred Stock are eligible for the dividends received
deduction for corporate holders, interest on the Debentures will not be eligible
for the dividends received deduction for corporate holders. The dividends
received deduction is not applicable to individual, non-corporate holders. For a
discussion of these and other United States federal income tax considerations
relevant to the Exchange Offer, see "Certain United States Federal Income Tax
Consequences".
LISTING AND TRADING OF DEBENTURES AND PREFERRED STOCK
The exchange of shares of the Preferred Stock pursuant to the Exchange
Offer will reduce the number of shares of the Preferred Stock that might
otherwise trade publicly and the number of holders of such shares, and depending
on the number of shares exchanged, could adversely affect the liquidity and
market value of remaining shares held by the public.
Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet the
requirements of the NYSE for continued listing. As of May 4, 1995, there were
3,630,100 issued and outstanding shares of the Preferred Stock, 714 record
holders of the Preferred Stock and approximately 4,000 beneficial holders of the
Preferred Stock. According to the NYSE's published guidelines, the NYSE would
consider delisting the Preferred Stock if, among other things, the number of
publicly held shares of the Preferred Stock should fall below 100,000 or the
aggregate market value of publicly held shares of the Preferred Stock should
fall below $2,000,000. If, as a result of the exchange of shares of the
Preferred Stock pursuant to the Exchange Offer or otherwise, the shares of the
Preferred Stock no longer meet the requirements of the NYSE for continued
listing and the listing of the shares of the Preferred Stock is discontinued,
the market for the Preferred Stock could be adversely affected.
In the event of the delisting of the Preferred Stock by the NYSE, it is
possible that the Preferred Stock would continue to trade on another securities
exchange or in the over-the-counter market and that price quotations would be
reported by such exchange, by the NASD through the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or by other sources.
The extent of the public market for such Preferred Stock and the availability of
such quotations would, however, depend upon such factors as the number of
shareholders remaining at such time, the interest in maintaining a market in
such Preferred Stock on the part of securities firms, the possible termination
of registration under the Exchange Act, as described below, and other factors.
There has not been any public market for the Debentures. While the Company
intends to list the Debentures on the NYSE, there can be no assurance that an
active market for the Debentures will develop or be sustained in the future on
such exchange. Listing will depend upon the satisfaction of the NYSE's listing
requirements with respect to the Debentures, which requires a minimum of 400
beneficial holders and 1,000,000 outstanding securities. The Dealer Managers
currently plan to make a market in the Debentures following the completion of
the Exchange Offer and may buy and sell the Debentures on a "when and if issued"
basis prior to the completion of the Exchange Offer. However, there can be no
assurance that the Dealer Managers will engage in such activities or that any
active market in the Debentures will develop or be maintained. Accordingly, no
assurance can be given as to the liquidity of, or trading for, the Debentures.
SPECIAL FACTORS
PURPOSE OF THE EXCHANGE OFFER
The Company is making the Exchange Offer because it believes that the Offer
will improve the Company's after-tax cash flow by replacing shares of the
Preferred Stock with Debentures. The potential cash flow benefit to the Company
arises because interest payable on the Debentures will be deductible by the
Company (as it accrues) for United States federal income tax purposes, while
dividends payable on the shares
10
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of the Preferred Stock are not deductible. Because of the current interest rate
environment and the tax deductible nature of the Debentures, the Company has
decided to pursue the exchange at this time. The Company's Board of Directors
(the "Board of Directors") has authorized the Exchange Offer by a unanimous
vote.
FAIRNESS OF THE EXCHANGE OFFER
The Company believes the Exchange Offer is fair to holders of shares of the
Preferred Stock. In particular, the Exchange Offer will result in the holders
obtaining a security that is senior to the Preferred Stock, that provides for a
higher interest rate than the equivalent dividend on the Preferred Stock and
that provides for a definitive maturity date. The Exchange Offer does not
require that a majority of unaffiliated security holders approve the Exchange
Offer.
In considering the fairness of the Exchange Offer, the Company considered
the following factors: (i) claims in respect of the Debentures will rank senior
to claims in respect of the Preferred Stock in the event of the Company's
bankruptcy; (ii) in the event the Company fails to make an interest payment on
the Debentures when due, the Company will be subject to the Late Payment Penalty
while a failure to make a dividend payment on the Preferred Stock is not subject
to a monetary penalty; (iii) holders of shares of the Preferred Stock have no
conversion, preemption or other similar equity-related rights that they will
give up in the Exchange Offer; (iv) the Debentures are expected to bear an
interest rate which will be somewhat greater than the current dividend yield on
the Preferred Stock; and (v) the holders of the Preferred Stock are already
investors in the Company and the Exchange Offer is voluntary. (In determining
that a failure to pay interest was unlikely, the Company considered its current
financial position and its projected results of operations, which indicate it
expects to be able to pay interest on the Debentures as it becomes due for the
projected future. Furthermore, because of the impact of the Late Payment
Penalty, the Company has a strong incentive to avoid missing an interest
payment. Finally, the Company and its subsidiaries have had publicly-traded
securities outstanding for more than 20 years and they have at all times made
interest and dividend payments when those payments were due.) The Company did
not assign any particular weight to any specific foregoing factor in relation to
the other factors. Based on the foregoing, the Company's management recommended
the Exchange Offer to the Board of Directors and the Board of Directors
authorized the Exchange Offer by a unanimous vote. The Board of Directors did
not independently undertake any further analysis of any of the foregoing factors
or adopt any specific resolution to the effect that the Exchange Offer is fair
to holders of the shares of the Preferred Stock in light of management's
recommendation and the fact that the Preferred Stock has non-equity economic
characteristics. Neither the Company nor the Board of Directors received any
report, opinion (other than certain opinions of counsel relating to the validity
of the Debentures and the corporate authority to make the Exchange Offer) or
appraisal which is materially related to the Exchange Offer, including, but not
limited to, any such report, opinion or appraisal relating to the consideration
or the fairness of the consideration to be offered to the holders of the shares
of the Preferred Stock or the fairness of such transaction to the Company.
A majority of the directors who are not employees of the Company have
approved the Exchange Offer, although they have not retained any unaffiliated
representative to act solely on behalf of unaffiliated shareholders for the
purposes of negotiating or preparing a report reviewing the terms of the
Exchange Offer. Neither the Company nor the Board of Directors considered other
procedural safeguards in determining the fairness of the Exchange Offer.
The determination of the interest rate paid on the Debentures was based on
the fact that the Debentures would have a structurally senior position to the
Preferred Stock and on current market conditions, in light of the dividend rate
on the shares of the Preferred Stock and dividend rates for debt issued by
similarly rated companies.
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19
CERTAIN EFFECTS OF THE EXCHANGE OFFER; PLANS OF THE COMPANY AFTER THE EXCHANGE
OFFER
Following the consummation of the Exchange Offer, the business and
operations of the Company will be continued by the Company substantially as they
are currently being conducted. Except as disclosed in this Prospectus, the
Company has no present plans or proposals that would result in (i) the
acquisition by any person of any material amount of additional securities of the
Company, or the disposition of any material amount of securities of the Company,
(ii) an extraordinary corporate transaction, such as a merger, reorganization,
liquidation or sale or transfer of a material amount of assets (other than the
sale or transfer of certain non-core assets acquired by the Company through the
acquisition of Transco Energy Company) involving the Company or any of its
subsidiaries, (iii) any change in the present Board of Directors or management
of the Company, including, but not limited to, a plan or proposal to change the
number or term of the directors, to fill any existing vacancy on the Board of
Directors or to change any material term of the employment contract of any
executive officer, except in each case in connection with the Company's 1995
Annual Meeting of shareholders held on May 18, 1995, (iv) any material change in
the present dividend rate or policy or indebtedness or capitalization of the
Company (except that it is anticipated that subsidiaries of the Company may
incur additional obligations to which the Debentures will be effectively
subordinated), (v) any other material change in the Company's corporate
structure or business or (vi) any changes in the Company's charter, bylaws or
instruments corresponding thereto or any other actions which may impede the
acquisition or control of the Company by any person.
Following the expiration of the Exchange Offer, the Company may, in its
sole discretion, determine to purchase any remaining shares of the Preferred
Stock or of Debentures through privately negotiated transactions, open market
purchases or another exchange or tender offer or otherwise, on such terms and at
such prices as the Company may determine from time to time, the terms of which
purchases or offers could differ from those of the Exchange Offer, except that
the Company will not make any such purchases of shares of the Preferred Stock or
of Debentures until the expiration of ten business days after the termination of
the Exchange Offer. Any possible future purchases of shares of the Preferred
Stock or of Debentures by the Company will depend on many factors, including the
market prices of the shares of Preferred Stock and Debentures, the Company's
business and financial position, alternative investment opportunities available
to the Company, the results of the Exchange Offer and general economic and
market conditions.
Holders of shares of the Preferred Stock who do not tender their shares in
the Exchange Offer will continue to hold such shares and will be entitled to all
of the rights and preferences, and will be subject to all of the limitations,
applicable thereto.
Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet the
requirements of the NYSE for continued listing, which could adversely affect the
liquidity and market value of the Preferred Stock. See "Risk Factors -- Listing
and Trading of Debentures and Preferred Stock".
The Preferred Stock is currently registered under the Exchange Act.
Registration of the Preferred Stock may be terminated upon application of the
Company to the Securities and Exchange Commission (the "Commission") pursuant to
Section 12(g)(4) of the Exchange Act if the shares of the Preferred Stock are
neither held by 300 or more holders of record nor listed on a national
securities exchange. Termination of registration of the Preferred Stock under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to the holders of shares of Preferred Stock (although
the Company would, among other things, remain subject to the reporting
obligations under the Exchange Act as a result of its other outstanding
securities) and would make certain provisions of the Exchange Act, such as the
requirements of Rule 13e-3 thereunder with respect to "going private"
transactions, no longer applicable in respect of the Preferred Stock.
All shares of the Preferred Stock exchanged by the Company pursuant to the
Exchange Offer will be retired, canceled and thereafter returned to the status
of authorized but unissued shares of the Company's preferred stock. Any shares
of the Preferred Stock remaining outstanding after the Exchange Offer will
continue to be redeemable at the option of the Company after September 1, 1997.
See "Description of the Preferred Stock -- Optional Redemption". Upon
liquidation or dissolution of the Company, holders of shares of the Preferred
Stock are entitled to receive a liquidation preference in the amount of $25 per
share plus
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dividends accrued and accumulated but unpaid to the redemption date, on a parity
with holders of other Company preferred stock and prior to payment of any
amounts to the holders of the Common Stock. The only other preferred stock of
the Company currently outstanding is 2.5 million shares of its series of $3.50
convertible preferred stock.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE THEIR SHARES OF
THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.
THE COMPANY
The Company, through subsidiaries, is engaged in the transportation and
sale of natural gas and related activities, natural gas gathering and processing
operations, the transportation of petroleum products, the telecommunications
business and provides a variety of other products and services to the energy
industry and financial institutions. In January of 1995 the Company sold a major
portion of its telecommunications assets and in May of 1995 the Company
completed the acquisition of Transco Energy Company which, through its
subsidiaries, transports natural gas to markets in the eastern half of the
United States. The Company's subsidiaries currently own and operate: (i) four
interstate natural gas pipeline systems and have a fifty percent interest in a
fifth; (ii) a common carrier petroleum products pipeline system; and (iii)
natural gas gathering and processing facilities and production properties. The
Company also markets natural gas and natural gas liquids. The Company's
telecommunications subsidiaries offer data, voice and video-related products and
services and customer premises equipment nationwide. The Company also has
investments in the equity of certain other companies.
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RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The Company's consolidated ratios of earnings to combined fixed charges and
preferred stock dividend requirements* were as follows for the respective
periods indicated:
YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED ----------------------------------------
MARCH 31, 1995 1994 1993 1992 1991 1990
- ------------------ ---- ---- ---- ---- ----
2.39 2.15 2.30 1.59 1.43 1.15
- ---------------
* For the purpose of this ratio (i) earnings consist of income from continuing
operations before fixed charges and income taxes for the Company, its
majority-owned subsidiaries and its proportionate share of 50 percent-owned
companies, less undistributed earnings of less than 50 percent-owned
companies; and (ii) fixed charges consist of interest and debt expense on all
indebtedness (without reduction for interest capitalized), that portion of
rental payments on operating leases estimated to represent an interest factor,
plus the pretax effect of preferred stock dividends of the Company and its
subsidiaries.
CAPITALIZATION
The following table sets forth the consolidated debt and stockholders'
equity of the Company at March 31, 1995 and as adjusted to give effect to the
issuance of Debentures in exchange for shares of the Preferred Stock. The "As
Adjusted" column below assumes that holders of 3,630,100 shares of the Preferred
Stock (which constitute all outstanding shares of the Preferred Stock) elect to
participate in the Exchange Offer. The financial data at March 31, 1995 in the
following table are derived from the Company's financial statements included in
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995, which is incorporated herein by reference. See "Incorporation by
Reference."
MARCH 31, 1995
------------------------
ACTUAL AS ADJUSTED
------ -----------
(IN MILLIONS)
Long-term debt due within one year............................ $ 187 $ 187
====== ======
Long-term debt................................................ $2,848 $ 2,948
Stockholders' equity
Preferred stock............................................. 100 --
Common stock................................................ 105 105
Capital in excess of par value.............................. 994 994
Retained earnings........................................... 1,779 1,779
Unamortized deferred compensation........................... (2) (2)
------ ------
2,976 2,876
Less treasury stock......................................... (408) (408)
------ ------
Total stockholders' equity.................................. 2,568 2,468
------ ------
Total capitalization**.............................. $5,416 $ 5,416
====== ======
- ---------------
** Excludes minority interest in common stock and preferred stock of a
subsidiary.
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THE EXCHANGE OFFER
GENERAL
The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $90,752,500 aggregate principal amount of its Debentures for up
to 3,630,100 shares of the Preferred Stock, which constitutes all outstanding
shares of the Preferred Stock as of the date of this Prospectus. Pursuant to the
terms and subject to the conditions of the Exchange Offer, the Company will
accept for exchange any and all shares of the Preferred Stock validly tendered
and not properly withdrawn prior to the Expiration Time.
The Exchange Offer is subject to the Minimum Condition, which requires that
a minimum of 1,000,000 shares of the Preferred Stock shall have been tendered
and not withdrawn prior to the Expiration Date. The Exchange Offer is also
subject to certain additional conditions. See "The Exchange Offer -- Conditions
of the Exchange Offer".
Tendering holders will not be obligated to pay brokerage commissions or
fees to the Dealer Managers, the Exchange Agent, the Information Agent or the
Company or, subject to the instructions in the Letter of Transmittal with
respect to special issuance instructions, transfer taxes with respect to the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer. The
Company will pay all reasonable charges and expenses in connection with the
Exchange Offer, other than any applicable income taxes or any charges that
individual brokerage firms charge their clients for other services rendered in
connection with tendering their shares.
EXPIRATION; EXTENSION; TERMINATION; AMENDMENT
The Exchange Offer will expire at the Expiration Time, unless the Company,
in its sole discretion, shall have extended the period during which the Exchange
Offer is open, in which case the term "Expiration Time" means the latest time
and date at which the Exchange Offer, as so extended by the Company, shall
expire.
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period of time during which the
Exchange Offer is open by giving oral or written notice of such extension to the
Exchange Agent and making a public announcement thereof. There can be no
assurance that the Company will exercise its right to extend the Exchange Offer.
During any extension of the Exchange Offer, all shares of the Preferred Stock
previously tendered pursuant thereto and not exchanged or withdrawn will remain
subject to the Exchange Offer and may be accepted for exchange by the Company at
the expiration of the Exchange Offer subject to the right of a tendering holder
to withdraw its shares of the Preferred Stock. See "Withdrawal Rights" below.
The Company also expressly reserves the right, subject to applicable law,
(i) to delay acceptance for exchange of any shares of the Preferred Stock or
terminate the Exchange Offer and not accept for exchange any shares of the
Preferred Stock and promptly return all such shares to the tendering holders
thereof in the event that the Minimum Condition or any of the conditions
specified in "Conditions of the Exchange Offer" below are not satisfied or
waived by the Company or to comply in whole or in part with applicable law, by
giving oral or written notice of such delay or termination to the Exchange
Agent, (ii) to waive any condition to the Exchange Offer and accept all shares
of the Preferred Stock previously tendered pursuant thereto, (iii) to extend the
Expiration Time and retain all shares of the Preferred Stock tendered pursuant
thereto until the expiration of the Exchange Offer as extended, (iv) to amend
the Exchange Offer in any respect or (v) to modify the form or amount of the
consideration to be paid pursuant to the Exchange Offer. If the Exchange Offer
is so amended, the term "Exchange Offer" shall mean the Exchange Offer as so
amended. The reservation by the Company of the right to delay acceptance for
exchange of shares of the Preferred Stock is subject to the provisions of Rule
13e-4 and Rule 14e-1(c) under the Exchange Act, which require that the Company
pay the consideration offered or return the shares of the Preferred Stock
deposited by or on behalf of holders thereof promptly after the termination or
withdrawal of the Exchange Offer.
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Any extension, delay, termination or amendment of the Exchange Offer will
be followed as promptly as practicable by a public announcement thereof. Without
limiting the manner in which the Company may choose to make a public
announcement of any extension, delay, termination or amendment of the Exchange
Offer, the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by issuing a release to the
Dow Jones News Service, except in the case of an announcement of an extension of
the Exchange Offer, in which case the Company shall have no obligation to
publish, advertise or otherwise communicate such announcement other than by
issuing a notice of such extension by press release or other public
announcement, which notice shall be issued no later than 9:00 A.M., New York
City time, on the next business day after the previously scheduled expiration
date of the Exchange Offer.
If the Company shall decide, in its sole discretion, to decrease the number
of shares of the Preferred Stock being sought in the Exchange Offer or to
increase or decrease the consideration offered to holders of shares of the
Preferred Stock to be paid in the Exchange Offer and if, at the time that notice
of such increase or decrease is first published, sent or given to holders of
shares of the Preferred Stock in the manner specified above, the Exchange Offer
is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from and including the date that such notice is
first so published, sent or given, the Exchange Offer will be extended until the
expiration of such period of ten business days. As used in this paragraph,
"business day" has the meaning set forth in Rule 14d-1 (and applicable to
Regulation 14E) under the Exchange Act.
If the Company makes a material change in the terms of the Exchange Offer
or the information concerning the Exchange Offer, or waives any condition of the
Exchange Offer that results in a material change to the circumstances of the
Exchange Offer, the Company will disseminate additional exchange offer materials
to the extent required under the Exchange Act, and will extend the Exchange
Offer to the extent required in order to permit holders of the shares of the
Preferred Stock adequate time to consider such materials. The minimum period
during which the Exchange Offer must remain open following material changes in
the terms of the Exchange Offer or information concerning the Exchange Offer,
other than a change in price or percentage of securities sought, will depend
upon the facts and circumstances, including the relative materiality of the
terms or information.
PROCEDURE FOR TENDERING PREFERRED STOCK
The acceptance by a holder of shares of the Preferred Stock of the Exchange
Offer pursuant to one of the procedures set forth below will constitute an
agreement between the holder of such shares and the Company in accordance with
the terms and subject to the conditions set forth in this Prospectus and in the
Letter of Transmittal.
For shares of the Preferred Stock to be validly tendered pursuant to the
Exchange Offer, the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message (as hereinafter defined) in connection with a book-entry
transfer of shares of the Preferred Stock, and any other required documents,
must be received by the Exchange Agent at one of its addresses set forth on the
back cover page of this Prospectus prior to the Expiration Time. In addition,
either (i) the certificates representing tendered shares of the Preferred Stock
must be received by the Exchange Agent or such shares of the Preferred Stock
must be tendered pursuant to the procedure for book-entry transfer described
below and a confirmation of receipt of such tendered shares of the Preferred
Stock must be received by the Exchange Agent, in each case prior to the
Expiration Time, or (ii) the tendering holder must comply with the guaranteed
delivery procedures described below.
THE METHOD OF DELIVERY OF SHARES OF THE PREFERRED STOCK, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER TENDERING SUCH SHARES AND, EXCEPT AS OTHERWISE
PROVIDED HEREIN, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE EXCHANGE AGENT. IF SENT BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE
PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE
MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION TIME TO PERMIT
DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION TIME.
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If a holder desires to tender shares of the Preferred Stock pursuant to the
Exchange Offer but is unable to locate the certificates representing such shares
to be tendered, such holder should write to or telephone First Chicago Trust
Company of New York, telephone number 201-324-0137, about procedures for
obtaining a replacement certificate for shares of the Preferred Stock and
arranging for indemnification.
NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING PREFERRED STOCK
SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE INFORMATION AGENT.
SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.
Any beneficial owner whose shares of the Preferred Stock are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact such registered holder promptly and
instruct such registered holder to tender on such beneficial owner's behalf.
Book-Entry Transfer. The Company understands that the Exchange Agent will
make a request promptly after the date of this Prospectus to establish accounts
with respect to the shares of the Preferred Stock at DTC for the purpose of
facilitating the Exchange Offer, and, subject to the establishment thereof, any
financial institution that is a participant in DTC's system may make book-entry
delivery of shares of the Preferred Stock by causing DTC to transfer such shares
into the Exchange Agent's account with respect to the shares of the Preferred
Stock in accordance with DTC's procedures for such transfer. Although delivery
of shares of the Preferred Stock may be effected through book-entry transfer
into the Exchange Agent's accounts at DTC pursuant to DTC's Automated Tender
Offer Program ("ATOP") procedures, a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
other required documents, must in each case be received by the Exchange Agent at
one of its addresses set forth on the back cover page of this Prospectus prior
to the Expiration Time, or, if the guaranteed delivery procedures described
below are complied with, within the time period provided under such procedures.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "Agent's Message" means a message, transmitted by DTC to, and
received by, the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering the shares of the Preferred Stock which are the
subject of such book-entry confirmation, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against such participant.
Signature Guarantees. All signatures on a Letter of Transmittal must be
guaranteed by an Eligible Institution, unless the shares of the Preferred Stock
which are the subject of such Letter of Transmittal are tendered or executed,
respectively, (i) by a registered holder (which term, for the purposes described
above, shall include any participant in DTC whose name appears on a security
position listing as the owner of shares of the Preferred Stock) of such shares
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. If shares of the Preferred Stock are
registered in the name of a person other than the signer of a Letter of
Transmittal or if Debentures and/or certificates for untendered or unexchanged
shares of the Preferred Stock are to be issued or returned to a person other
than the registered holder, then the shares of the Preferred Stock must be
endorsed by the registered holder or be accompanied by a stock power in form
satisfactory to the Company duly executed by the registered holder with such
signatures guaranteed by an Eligible Institution. If signatures on a Letter of
Transmittal are required to be guaranteed, such guarantees must be by a member
firm of a registered national securities exchange, a member of the NASD or by a
commercial bank or trust company having an office in the Untied States that is a
participant in the Security Transfer Agents Medallion Program or the Stock
Exchange Medallion Program (each of the foregoing being referred to as an
"Eligible Institution").
Miscellaneous. Issuance of Debentures in exchange for shares of the
Preferred Stock will be made only against deposit of the tendered shares of the
Preferred Stock. If less than the total number of shares of the Preferred Stock
evidenced by a submitted certificate for shares of the Preferred Stock is
tendered, the
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tendering holder of shares of the Preferred Stock should fill in the number of
shares tendered in the appropriate boxes on the Letter of Transmittal. The
Exchange Agent will then reissue and return to the tendering holder (unless
otherwise requested by the holder under "Special Issuance Instructions" and
"Special Delivery Instructions" in the Letter of Transmittal), as promptly as
practicable following the Expiration Time, shares of the Preferred Stock equal
to the number of such delivered shares of the Preferred Stock not tendered,
together with any tendered shares of the Preferred Stock that were not accepted
for exchange for any reason. The total number of shares of the Preferred Stock
deposited with the Exchange Agent will be deemed to have been tendered unless
otherwise indicated.
All questions as to the form of all documents and the validity (including
the time of receipt), eligibility, acceptance and withdrawal of tendered shares
of the Preferred Stock will be determined by the Company, in its sole
discretion, which determination shall be final and binding. The Company
expressly reserves the absolute right to reject any and all tenders not in
proper form and to determine whether the acceptance of or exchange by it for
such tenders would be unlawful. The Company also reserves the absolute right,
subject to applicable law, to waive or amend any of the conditions of the
Exchange Offer or to waive any defect or irregularity in the tender of any
particular shares of the Preferred Stock. None of the Company, the Exchange
Agent, the Information Agent, the Dealer Managers or any other person will be
under any duty to give notification of any defects or irregularities in tenders
or will incur any liability for failure to give any such notification. No tender
of shares of the Preferred Stock will be deemed to have been validly made until
all defects and irregularities with respect to such shares have been cured or
waived. Any shares of the Preferred Stock received by the Exchange Agent that
are not properly tendered and as to which irregularities have not been cured or
waived will be returned by the Exchange Agent to the appropriate tendering
holder as soon as practicable. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding on all parties.
GUARANTEED DELIVERY PROCEDURES
If a holder desires to tender shares of the Preferred Stock and the
holder's shares are not immediately available or time will not permit the
holder's shares of the Preferred Stock, Letter of Transmittal or other required
documents to reach the Exchange Agent prior to the Expiration Time or the
procedure for book-entry transfer cannot be completed on a timely basis, a
tender may be effected if:
(a) the tender is made by or through an Eligible Institution; and
(b) prior to the Expiration Time, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
substantially in the form provided by the Company which contains a
signature guaranteed by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery (unless such tender is for the account
of an Eligible Institution) which sets forth the name and address of the
holder of the shares of the Preferred Stock and the number of shares of the
Preferred Stock tendered, states that the tender is being made thereby and
guarantees that within five NYSE trading days after the Expiration Time,
the Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's
Message in connection with a book-entry transfer of shares of the Preferred
Stock, and any other documents required by the Letter of Transmittal,
together with the shares of the Preferred Stock will be deposited by the
Eligible Institution with the Exchange Agent; and
(c) all tendered shares of the Preferred Stock (or a confirmation of
book-entry transfer of such shares into the Exchange Agent's account at
DTC) as well as the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer of shares of the
Preferred Stock, and any other documents required by the Letter of
Transmittal, are received by the Exchange Agent within five NYSE trading
days after the Expiration Time.
A Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Exchange Agent and must include a
signature guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
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Notwithstanding any other provision hereof, in all cases Debentures will
only be issued in exchange for shares of the Preferred Stock accepted for
exchange pursuant to the Exchange Offer after timely receipt by the Exchange
Agent of certificates for such shares (or a confirmation of book-entry transfer
of such shares into the Exchange Agent's account at DTC as described above), the
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message in
connection with a book-entry transfer, and any other required documents.
LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer.
The party tendering shares of the Preferred Stock for exchange (the
"Transferor") exchanges, assigns and transfers such shares of the Preferred
Stock to the Company and irrevocably constitutes and appoints the Exchange Agent
as the Transferor's agent and attorney-in-fact to cause the shares of the
Preferred Stock to be assigned, transferred and exchanged. The Transferor
represents and warrants that it has the full power and authority to tender,
exchange, assign and transfer the shares of the Preferred Stock and to acquire
the Debentures issuable upon the exchange of such tendered shares of the
Preferred Stock in accordance with the terms of the Exchange Offer, and that,
when the same are accepted for exchange, the Company will acquire good and
unencumbered title to the shares of the Preferred Stock free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim. The Transferor also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Company to be necessary or
desirable to complete the exchange, assignment and transfer of shares of the
Preferred Stock or transfer ownership of such shares of the Preferred Stock on
the account books maintained by DTC. All authority conferred by the Transferor
will survive the death, bankruptcy or incapacity of the Transferor and every
obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of such
Transferor.
WITHDRAWAL RIGHTS
Tenders of shares of the Preferred Stock pursuant to the Exchange Offer are
irrevocable, except that shares of the Preferred Stock tendered pursuant to the
Exchange Offer may be withdrawn at any time prior to the Expiration Time and,
unless theretofore accepted for exchange pursuant to the Exchange Offer, may
also be withdrawn at any time after 40 business days from the date of this
Prospectus.
To be effective, a written notice of withdrawal delivered by mail, hand
delivery or facsimile transmission must be timely received by the Exchange Agent
at the addresses set forth in the Letter of Transmittal. The method of
notification is at the risk and election of the holder. Any such notice of
withdrawal must specify (i) the holder named in the Letter of Transmittal as
having tendered shares of the Preferred Stock to be withdrawn, (ii) if the
shares of the Preferred Stock are held in certificated form, the certificate
numbers of the shares of the Preferred Stock to be withdrawn, (iii) that such
holder is withdrawing its election to have such shares of the Preferred Stock
exchanged, and the name of the registered holder of such shares of the Preferred
Stock, and such notice of withdrawal must be signed by the holder in the same
manner as the original signature on the Letter of Transmittal (including any
required signature guarantees) or be accompanied by evidence satisfactory to the
Company that the person withdrawing the tender has succeeded to the beneficial
ownership of the shares of the Preferred Stock being withdrawn.
The Exchange Agent will return the properly withdrawn shares of the
Preferred Stock promptly following receipt of notice of withdrawal. If shares of
the Preferred Stock have been tendered pursuant to the procedure for book-entry
transfer, any notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawn shares of the Preferred Stock
and otherwise comply with DTC's procedures. All questions as to the validity of
a notice of withdrawal, including the time of receipt, will be determined by the
Company, and such determination will be final and binding on all parties.
Withdrawal of tenders of shares of the Preferred Stock may not be rescinded and
any shares of the Preferred Stock withdrawn will not thereafter be deemed to be
validly tendered for the purposes of the Exchange Offer. Properly withdrawn
shares
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of the Preferred Stock, however, may be retendered by following the procedures
therefor described elsewhere herein at any time prior to the Expiration Time.
See "Procedure for Tendering Preferred Stock" above.
ACCEPTANCE OF PREFERRED STOCK; ISSUANCE OF DEBENTURES
The acceptance for exchange of shares of the Preferred Stock validly
tendered and not properly withdrawn will be made as promptly as practicable
after the Expiration Time. The Company expressly reserves the right to terminate
the Exchange Offer and not accept for exchange any of the shares of the
Preferred Stock if the Minimum Condition or any of the conditions set forth
under "Conditions of the Exchange Offer" below shall not have been satisfied or
waived by the Company or to comply, in whole or in part, with any applicable
law. In addition, subject to the rules promulgated pursuant to the Exchange Act,
the Company expressly reserves the right to delay acceptance of any of the
shares of the Preferred Stock for exchange, to comply, in whole or in part, with
any applicable law. For purposes of the Exchange Offer, the Company will be
deemed to have accepted for exchange validly tendered and not properly withdrawn
shares of the Preferred Stock if, as and when the Company gives oral or written
notice thereof to the Exchange Agent. Subject to the terms and conditions of the
Exchange Offer, issuance of Debentures for shares of the Preferred Stock
accepted pursuant to the Exchange Offer will be made by the Exchange Agent on
the Issuance Date. The Exchange Agent will act as agent for the tendering
holders of shares of the Preferred Stock for the purposes of receiving
Debentures from the Company. Tendered shares of the Preferred Stock not accepted
for exchange by the Company, if any, will be returned without expense to the
tendering holder of such shares of the Preferred Stock (or, in the case of
shares of the Preferred Stock tendered by book-entry transfer into the Exchange
Agent's account at DTC, such shares will be credited to an account maintained at
DTC) as promptly as practicable following the Expiration Time.
If the Company extends the Exchange Offer, or for any reason whatsoever,
acceptance for exchange or issuance of Debentures in exchange for any shares of
the Preferred Stock tendered pursuant to the Exchange Offer is delayed, or the
Company is unable to accept for exchange or exchange shares of the Preferred
Stock tendered pursuant to the Exchange Offer, then, without prejudice to the
Company's rights set forth herein, the Exchange Agent may nevertheless, on
behalf of the Company and subject to rules promulgated pursuant to the Exchange
Act, retain tendered shares of the Preferred Stock and such shares may not be
withdrawn except to the extent that the tendering holder of such shares of the
Preferred Stock is entitled to withdrawal rights as described above.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of a Letter of Transmittal, waive any right to
receive notice of acceptance of their shares of the Preferred Stock for
exchange.
ACCRUED DIVIDENDS
Holders of shares of the Preferred Stock accepted for exchange in the
Exchange Offer will receive cash in the amount of the Payment in Lieu of
Accumulated Dividends, payable on the Issuance Date to such holders.
Dividends on shares of the Preferred Stock not exchanged in the Exchange
Offer will continue to accrue and be payable when, as and if declared in
accordance with the terms of the shares of the Preferred Stock.
CONDITIONS OF THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company
shall not be required to accept for exchange or, subject to any applicable rules
and regulations of the Commission, including Rule 13e-4 and Rule 14e-1(c)
(relating to the Company's obligation to exchange and issue Debentures for or
return tendered shares of the Preferred Stock promptly after termination of the
Exchange Offer), exchange and issue Debentures for any shares of the Preferred
Stock tendered and may postpone the acceptance for exchange of or, subject to
the restriction set forth above, postpone the exchange and issuance of,
Debentures for shares of the Preferred Stock tendered and to be exchanged and
may terminate or amend the Exchange Offer if, at any
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time prior to the time of acceptance for exchange of, or exchange and issuance
of Debentures for, any such shares of the Preferred Stock (whether or not any
other shares of the Preferred Stock have theretofore been accepted for exchange
or Debentures have been issued in respect thereof pursuant to the Exchange
Offer), any of the following events shall occur:
(a) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, stockholders' equity,
financial condition, operations, results of operations or prospects of the
Company or any of its subsidiaries, or in the general economic or financial
market conditions in the United States or abroad, which, in the sole
judgment of the Company, is or may be materially adverse to the Company and
its subsidiaries or its stockholders or to the value of the shares of the
Preferred Stock, or there shall have been a significant decrease in the
market prices of or trading in the shares of the Preferred Stock, or the
Company shall have become aware of any fact or occurrence which, in the
sole judgment of the Company, is or may be materially adverse with respect
to the value of the shares of the Preferred Stock or the Exchange Offer's
contemplated benefits to the Company; or
(b) there shall have occurred (1) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or the over-the-counter market, (2) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (3) a declaration of a national emergency or a commencement of a
war, armed hostilities or other national or international calamity directly
or indirectly involving the United States, (4) any limitation (whether or
not mandatory) by any governmental or regulatory authority on, or any other
event which in the sole judgment of the Company might affect, the nature or
extension of credit by banks or other financial institutions, (5) any
significant adverse change in the United States securities or financial
markets, or (6) in the case of any of the foregoing existing at the time of
the commencement of the Exchange Offer, in the sole judgment of the
Company, a material acceleration, escalation or worsening thereof; or
(c) there shall have been any action taken or threatened, or any
statute, rule, regulation, pronouncement, judgment, order or injunction
proposed, sought, promulgated, enacted, entered, enforced or deemed
applicable to the Exchange Offer by any local, state, federal or foreign
government or governmental authority or by any court, domestic or foreign,
that, in the sole judgment of the Company, might, directly or indirectly,
(1) make the acceptance for exchange or issuance of Debentures for some or
all of the shares of the Preferred Stock illegal or otherwise restrict or
prohibit consummation of the Exchange Offer, (2) result in a delay in, or
restrict the ability of the Company, or render the Company unable, to
accept for exchange some or all of the shares of the Preferred Stock or to
issue some or all of the Debentures in exchange therefor, (3) otherwise
adversely affect the Company or (4) result in a material limitation in the
benefits expected to be derived by the Company as a result of the Exchange
Offer; or
(d) there shall be threatened, instituted or pending any action,
proceeding or claim by or before any court or governmental, administrative
or regulatory agency or authority or any other person or tribunal, domestic
or foreign, challenging the making of the Exchange Offer, the acquisition
by the Company of any shares of the Preferred Stock, or seeking to obtain
any material damages as a result thereof, or, in the sole judgment of the
Company, otherwise adversely affecting the Company or the value of the
shares of the Preferred Stock; or
(e) the Debentures fail to meet the requirements of the NYSE for
listing thereon;
which, in the sole judgment of the Company in any such case, and regardless of
the circumstances (including any action or omission by the Company or any of its
respective affiliates or subsidiaries) giving rise to any such condition, makes
it inadvisable to proceed with the Exchange Offer or such acceptance for
exchange of shares of the Preferred Stock or the issuance of the Debentures in
exchange therefor.
All the foregoing conditions are for the sole benefit of the Company and
may be asserted by the Company regardless of the circumstances giving rise to
such condition and may be waived by the Company, in whole or in part, at any
time and from time to time, in the sole discretion of the Company, subject to
any requirements to extend the Exchange Offer as described above under
"Expiration; Extension; Termination; Amendment".
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The failure by the Company at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
Any determination by the Company concerning the foregoing conditions shall be
final and binding.
If any of the foregoing conditions shall not be satisfied (or, with respect
to the above enumerated events, shall have occurred), the Company may, subject
to applicable law, (i) terminate the Exchange Offer and return all shares of the
Preferred Stock tendered pursuant to the Exchange Offer to tendering security
holders; (ii) extend the Exchange Offer and retain all tendered shares of the
Preferred Stock until the Expiration Time for the extended Exchange Offer; or
(iii) waive the unsatisfied conditions with respect to the Exchange Offer and
accept all shares of the Preferred Stock tendered pursuant to the Exchange
Offer.
DEALER MANAGERS
Lehman Brothers, Morgan Stanley & Co. Incorporated and Smith Barney Inc.
are acting as Dealer Managers for the Exchange Offer under a Dealer Managers
Agreement dated , 1995 (the "Dealer Managers Agreement"). The
Company has agreed to pay the Dealer Managers predetermined compensation for
their services in connection with the Exchange Offer and to reimburse the Dealer
Managers for all of their reasonable out-of-pocket expenses, including the
reasonable fees and expenses of their legal counsel.
The Dealer Managers have agreed to use their best efforts to solicit the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer.
The Company has agreed to indemnify the Dealer Managers against certain
liabilities, including certain liabilities under the federal securities laws.
FEES AND EXPENSES; TRANSFER TAXES
The expenses of soliciting tenders of the shares of the Preferred Stock
will be borne by the Company. For compensation to be paid to the Dealer
Managers, see "Exchange Offer -- Dealer Managers".
The Company will pay to a Soliciting Dealer (as hereinafter defined) a
solicitation fee of $.50 per share of the Preferred Stock for any share of the
Preferred Stock tendered and accepted for exchange pursuant to the Exchange
Offer if such Soliciting Dealer has solicited and obtained such tender.
"Soliciting Dealer" includes (i) any broker or dealer in securities, including
the Dealer Managers in their capacity as a broker or dealer, which is a member
of any national securities exchange or of the National Association of Securities
Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for
membership in the NASD which agrees to conform to the NASD's Rules of Fair
Practice in soliciting tenders outside the United States to the same extent as
though it were an NASD member or (iii) any bank or trust company. In order for a
Soliciting Dealer to receive a solicitation fee with respect to the tender of
shares of the Preferred Stock, the Exchange Agent must have received a Letter of
Transmittal with the portion thereof entitled "Notice of Solicited Tenders"
properly completed and duly executed.
No such fee shall be payable to a Soliciting Dealer if such Soliciting
Dealer is required for any reason to transfer the amount of such fee to a
tendering holder (other than itself). Soliciting Dealers are not entitled to a
solicitation fee with respect to shares of the Preferred Stock beneficially
owned by such Soliciting Dealer or with respect to any shares which are
registered in the name of a Soliciting Dealer unless such shares are held by
such Soliciting Dealer as nominee and are tendered for the benefit of beneficial
holders identified in the Letter of Transmittal. The Dealer Managers may not,
until the Expiration Time, buy, sell, deal or trade in the shares of the
Preferred Stock for their own account. No broker, dealer, bank, trust company or
fiduciary shall be deemed to be the agent of the Company, the Exchange Agent,
the Dealer Managers or the Information Agent for purposes of the Exchange Offer.
The Company will pay any transfer taxes with respect to transfer and
exchange of shares pursuant to the Exchange Offer. If, however, the Debentures
due in respect of the shares of the Preferred Stock accepted for exchange are to
be issued to, or (in the circumstances permitted hereby) if certificates for
shares of the Preferred Stock not tendered or not exchanged and paid for are to
be registered in the name of, any person
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other than the person signing the Letter of Transmittal, the amount of any
transfer taxes (whether imposed on the registered holder or such person) payable
on account of the transfer to such person will be deducted from the Debentures
due in respect of the shares of the Preferred Stock accepted for exchange if
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
not submitted.
Assuming all outstanding shares of the Preferred Stock are exchanged
pursuant to the Exchange Offer, it is estimated that the expenses incurred by
the Company in connection with the Offers (other than the solicitation fee of
$.50 per share of the Preferred Stock described above) will aggregate
approximately $ . The Company will be responsible for paying all such
expenses and anticipates that they will be paid from available cash of the
Company.
EXCHANGE AGENT AND INFORMATION AGENT
First Chicago Trust Company of New York will act as exchange agent for the
Exchange Offer. All correspondence in connection with the Exchange Offer, the
Letter of Transmittal and the Notice of Guaranteed Delivery should be addressed
to the Exchange Agent as follows:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY HAND/OVERNIGHT COURIER BY MAIL
Tenders & Exchanges Tenders & Exchanges
Suite 4680-WC P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WCI
New York, NY 10005 Jersey City, NJ 07303
Facsimile Transmission
(For Eligible Institutions Only)
(201) 222-4720
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
Shareholder Inquiries Regarding Lost Certificates:
1-201-324-0137
The Exchange Agent is also the transfer agent for the Preferred Stock and
the common stock of the Company, a lender under the Credit Agreement dated as of
February 23, 1995 among the Company and certain of its subsidiaries and the
banks named therein, and provides cash management services to the Company and
its subsidiaries.
Morrow & Co., Inc. will act as Information Agent for the Exchange Offer. In
such capacity, the Information Agent will assist with the mailing of the
Prospectus and related materials to holders of shares of the Preferred Stock,
respond to inquiries of and provide information to holders of shares of the
Preferred Stock in connection with the Exchange Offer and provide other similar
advisory services as the Company may request from time to time. All inquiries
relating to the Exchange Offer should be directed to the Information Agent as
follows:
MORROW & CO., INC.
909 Third Avenue 14755 Preston Road, Suite 725
New York, New York 10022 Dallas, Texas 75240
Banks and Brokers call toll-free:
1-800-662-5200
All others call toll-free:
1-800-566-9058
The Company will pay the Information Agent and the Exchange Agent their
reasonable and customary compensation for their services in connection with the
Exchange Offer. In addition, the Company will
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reimburse the Exchange Agent and the Information Agent for their reasonable
out-of-pocket expenses, and will indemnify the Exchange Agent and the
Information Agent against certain liabilities and expenses in connection with
their services, including certain liabilities under the federal securities laws.
The Company will also pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
copies of this Prospectus and related documents to beneficial holders of shares
of the Preferred Stock, and in handling or forwarding tenders or consents for
their customers.
Directors, officers and regular employees of the Company, none of whom will
be specifically compensated for such services, may contact holders of shares of
the Preferred Stock by mail, telephone, facsimile transmission, telex, telegraph
and personal interviews regarding the Exchange Offer, and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward this
Prospectus (and all related materials) to beneficial owners of shares of the
Preferred Stock.
MARKET AND TRADING INFORMATION
The shares of the Preferred Stock are listed and traded on the NYSE. The
following table sets forth for the calendar periods indicated the high and low
closing sales prices for the shares of the Preferred Stock per share as reported
in published financial sources and the dividends paid on such shares:
DIVIDENDS
PAID
HIGH LOW PER SHARE(1)
--- --- ------------
1993:
First Quarter........................................ 26 3/4 24 5/8 .5525
Second Quarter....................................... 27 7/8 25 7/8 .5525
Third Quarter........................................ 27 3/8 26 3/8 .5525
Fourth Quarter....................................... 27 1/2 25 7/8 .5525
1994:
First Quarter........................................ 26 7/8 24 7/8 .5525
Second Quarter....................................... 26 1/8 24 1/2 .5525
Third Quarter........................................ 26 1/4 25 .5525
Fourth Quarter....................................... 25 3/8 24 1/8 .5525
1995:
First Quarter........................................ 26 1/8 24 1/8 .5525
Second Quarter....................................... 26 1/2 25 .5525
Third Quarter (through )................... (2)
- ---------------
(1) An annual cash dividend of $2.21 per share is payable in quarterly
installments on March 1, June 1, September 1 and December 1 when and if
declared by the Board of Directors.
(2) The Company expects to pay its regular cash dividend of $.5525 on September
1 to holders of record on August 11, 1995.
On July , 1995, the last full day the shares of the Preferred Stock
traded prior to the commencement of the Exchange Offer, the closing sales price
of the shares of the Preferred Stock on the NYSE as reported on the Composite
Tape was $ per share. There can be no assurance concerning the prices at
which the shares of the Preferred Stock might be traded following the Exchange
Offer. The exchange of shares of the Preferred Stock pursuant to the Exchange
Offer will reduce the number of shares of the Preferred Stock that might
otherwise trade publicly and the number of holders of such shares, and depending
on the number of shares of the Preferred Stock exchanged, could adversely affect
the liquidity and market value of the remaining shares of the Preferred Stock
held by the public. Depending upon the number of shares of the Preferred Stock
exchanged pursuant to the Exchange Offer, the Preferred Stock may no longer meet
the requirements of the NYSE for continued listing and may no longer continue to
be registered under the Exchange Act, either of
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which could adversely affect the market for the Preferred Stock. See "Special
Factors -- Certain Effects of the Exchange Offer; Plans of the Company after the
Exchange Offer".
HOLDERS OF SHARES OF THE PREFERRED STOCK ARE URGED TO OBTAIN CURRENT
INFORMATION WITH RESPECT TO THE SALES PRICES OF SHARES OF THE PREFERRED STOCK.
There has not been any public market for the Debentures. While the Company
intends to list the Debentures on the NYSE, there can be no assurance that an
active market for the Debentures will develop or be sustained in the future on
such exchange. Listing will depend upon the satisfaction of the NYSE's listing
requirements with respect to the Debentures, which require a minimum of 400
beneficial holders and 1,000,000 outstanding securities. Although the Dealer
Managers have indicated to the Company that they intend to make a market in the
Debentures as permitted by applicable laws and regulations, they are not
obligated to do so and may discontinue any such market-making at any time
without notice. Accordingly, no assurance can be given as to the liquidity of,
or trading market for, the Debentures.
TRANSACTIONS AND ARRANGEMENTS CONCERNING
THE SHARES OF THE PREFERRED STOCK
The shares of the Preferred Stock were issued by the Company in an
underwritten public offering for cash which was registered under the Securities
Act. The offering, which closed on September 3, 1992, was for 4,000,000 shares
of the Preferred Stock at a price to the public of $25.00 per share and the
Company received aggregate proceeds of $96,500,000 after deducting the aggregate
underwriting discount of $3,500,000, but before expenses.
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any of
the directors or executive officers of the Company or any of its subsidiaries,
nor any associates of any of the foregoing, has effected any transactions in the
Preferred Stock since the issuance of the Preferred Stock in 1992, except that
the Company has effected open-market purchases of 369,900 shares of Preferred
Stock for an aggregate price (not including commissions) of $9,274,368 (average
per share price of $25.15) and except that the spouse of a former director
purchased 2,000 shares of the Preferred Stock on the open market in 1992 (at a
price of $25 7/8 per share) and 500 shares of the Preferred Stock on the open
market in 1994 (at a price of $25 per share).
Except as set forth in this Exchange Offer, neither the Company nor, to the
best of the Company's knowledge, any of its affiliates, directors or executive
officers or any of the executive officers or directors of its subsidiaries, is a
party to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly, to the Exchange Offer with respect to
any securities of the Company (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer of the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or the giving or withholding
of proxies, consents or authorizations). As of July , 1995, neither the
Company nor any subsidiary or affiliate nor, to the Company's knowledge, any of
their respective directors or executive officers, owns any of the shares of the
Preferred Stock, except for 780 shares of the Preferred Stock owned by Keith E.
Bailey, Chairman of the Board, Chief Executive Officer, President and Director
of the Company, 4,000 shares of the Preferred Stock owned by the spouse of
Robert J. LaFortune, Director of the Company, and 2,000 shares of the Preferred
Stock owned by a trust of which Robert J. LaFortune is a beneficiary. Mr. Bailey
and Mr. LaFortune presently intend to exchange their securities in the Exchange
Offer.
CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES
The following summary, which is based on the opinion by the Company's tax
counsel, Miller & Chevalier, Chartered, addresses the material federal income
tax consequences of the exchange of the Preferred Shares and the ownership of
Debentures. It deals only with Debentures held as capital assets and acquired
pursuant to the Exchange Offer and does not deal with special situations, such
as those of dealers in
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securities or currencies, financial institutions, life insurance companies,
persons holding Debentures as a part of a hedging or conversion transaction or a
straddle, United States Holders (as defined below) whose "functional currency"
is not the U.S. dollar, or Non-United States Holders (as defined below) who own
(actually or constructively) ten percent or more of the combined voting power of
all classes of voting stock of the Company or whose ownership of Debentures is
effectively connected with the conduct of a trade or business in the United
States. Furthermore, the discussion below is based upon the provisions of the
Internal Revenue Code of 1986, as amended (the "Code") and regulations, rulings
and judicial decisions thereunder as of the date hereof, and such authorities
may be repealed, revoked or modified so as to result in federal income tax
consequences different from those discussed below. PERSONS CONSIDERING THE
PURCHASE, OWNERSHIP OR DISPOSITION OF DEBENTURES SHOULD CONSULT THEIR OWN TAX
ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES IN LIGHT OF THEIR
PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY
OTHER TAXING JURISDICTION.
UNITED STATES HOLDERS. As used herein, a "United States Holder" means a
beneficial owner of Debentures that is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof, or an
estate or trust the income of which is subject to United States federal income
taxation regardless of its source. A "Non-United States Holder" means a
beneficial owner of Debentures that is not a United States Holder.
Exchange of Preferred Stock for Debentures. The exchange of Preferred
Stock for Debentures pursuant to the Exchange Offer will be a taxable
transaction. In the case of a United States Holder who owns (actually or
constructively) solely shares of the Preferred Stock, or not more than one
percent of the Preferred Stock and not more than one percent of any other class
of the Company's stock, gain or loss will be recognized in an amount equal to
the difference between (i) the sum of (a) the fair market value of the
Debentures on the Issuance Date and (b) the Payment in Lieu of Accumulated
Dividends and (ii) the exchanging holder's tax basis in the Preferred Stock
exchanged therefor and will be long-term capital gain or loss if the Preferred
Stock has been held for more than one year as of such date. Section 302 of the
Code. A United States Holder's aggregate tax basis in the Debentures will be
equal to the fair market value on the Issuance Date of either the Debentures or
the Preferred Stock, depending on whether the Debentures are traded on an
established market.
United States Holders of Preferred Stock owning (actually or
constructively) more than one percent of any other class of the Company's stock
may be treated either as recognizing gain or loss on the exchange of Preferred
Stock for Debentures or as receiving a dividend distribution from the Company,
depending on such Holders' particular circumstances. Such United States Holders
are advised to consult their own tax advisers as to the income tax consequences
of exchanging Preferred Stock for Debentures.
In determining whether a United States Holder of Preferred Stock owns
solely shares of the Preferred Stock, or not more than one percent of the
Preferred Stock and not more than one percent of any other class of the
Company's stock, the United States Holder must take into account not only the
Preferred Stock and other stock of the Company that such Holder actually owns,
but also Preferred Stock and other stock of the Company that such Holder
constructively owns under Section 318 of the Code. Under Section 318, a United
States Holder may constructively own Preferred Stock and other stock of the
Company actually owned, and in some cases constructively owned, by certain
related individuals or entities, and Preferred Stock and other stock of the
Company that the Holder has the right to acquire by exercise of an option.
United States Holders should consult their own tax advisors about the
application of the constructive ownership rules of Section 318 to their
particular situations.
Interest on Debentures. Under the terms of the Debentures, interest is
unconditionally payable in cash on a quarterly basis at a single fixed rate. Any
late payment of interest will be penalized pursuant to the Late Payment Penalty.
Accordingly, the interest payable under the Debentures is "Qualified Stated
Interest" as defined in Treas. Reg. sec. 1.1273-1(c), and the Debentures will be
issued without any "Original Issue Discount" ("OID"), as defined in Treas. Reg.
sec. 1.1273-1(a). The Company will therefore, when applicable, report all
interest payments on the Debentures to United States Holders on Form 1099-INT.
The Internal Revenue Service could disagree with the conclusion that the
Debentures were issued without any OID. The Company's tax counsel believes that,
if the matter were litigated, the Company's
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position should prevail. If, however, the Internal Revenue Service prevailed, a
United States Holder would be required to include OID in income on a current
basis, in accordance with a constant yield method based on a compounding of
interest, even if such United States Holder generally used the cash method of
accounting. Consequently, if the Company failed to make an interest payment when
due, a United States Holder would be required to include OID in income
notwithstanding the fact that the Company did not make the interest payment on
the Debentures.
Sale, Exchange or Retirement of the Debentures. Upon the sale, exchange or
retirement of Debentures, a United States Holder will recognize gain or loss
equal to the difference between the amount realized upon the sale, exchange or
retirement and the tax basis of the Debentures. Such gain or loss will be
capital gain or loss and will be long-term capital gain or loss if at the time
of sale, exchange or retirement, the Debentures have been held for more than one
year. Under current law, net capital gains of individuals are, under certain
circumstances, taxed at lower rates than items of ordinary income. The
deductibility of capital losses is subject to limitations.
NON-UNITED STATES HOLDERS. The following summary of the United States
federal income tax consequences of ownership of Debentures by Non-United States
Holders does not address (i) a Non-United States Holder who owns (actually or
constructively) ten percent or more of the combined voting power of all classes
of voting stock of the Company or (ii) a Non-United States Holder whose
ownership of Debentures is effectively connected with such Holder's conduct of a
trade or business in the United States. NON-UNITED STATES HOLDERS WHO OWN
(ACTUALLY OR CONSTRUCTIVELY) TEN PERCENT OR MORE OF THE COMPANY'S VOTING POWER
OR WHOSE OWNERSHIP OF DEBENTURES IS EFFECTIVELY CONNECTED WITH A CONDUCT OF A
TRADE OR BUSINESS IN THE UNITED STATES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE UNITED STATES FEDERAL TAX CONSEQUENCES, AS WELL AS
OTHER TAX CONSEQUENCES, OF OWNERSHIP OF DEBENTURES.
Exchange of Preferred Stock for Debentures. Subject to the discussion
below concerning backup withholding, if a Non-United States Holder certifies to
the Company that such Holder owns (actually or constructively) solely shares of
the Preferred Stock, or not more than one percent of the shares of the Preferred
Stock and not more than one percent of any other class of the Company's stock,
the Company will not withhold United States federal income tax on the issuance
of Debentures to such Holder in exchange for Preferred Stock. In determining
whether it can make this certification, a Non-United States Holder must take
into account not only the Preferred Stock and other stock of the Company that
such Holder actually owns, but also Preferred Stock and other stock of the
Company that such Holder constructively owns under Section 318 of the Code. See
"United States Holders -- Exchange of Preferred Stock for Debentures" above.
Non-United States Holders should consult their own United States tax advisors
with respect to the application of the constructive ownership rules of Section
318 to their particular situations.
If a Non-United States Holder makes the certification described above, any
gain recognized by such Holder on the exchange of Preferred Stock for Debentures
will generally not be subject to United States federal income tax unless (i)
such Holder is an individual who is present in the United States for 183 days or
more in the taxable year of the exchange and certain other conditions are met or
(ii) the Company is, or has been at any time during the five-year period ending
on the Issuance Date, a "United States real property holding corporation and, at
any time during such five-year period, such Holder owned (actually or
constructively) more than five percent of the Preferred Stock. The Company has
not determined whether it is, or has been, a United States real property holding
corporation. Non-United States Holders who have owned (actually or
constructively) more than five percent of the Preferred Stock at any time during
the past five years should consult their own United States tax advisors.
If a Non-United States Holder does not provide the certification described
above, the Company will treat the sum of (a) the fair market value of the
Debentures on the Issuance Date and (b) the Payment in Lieu of Accumulated
Dividends as a dividend and will withhold federal income tax at a rate of 30% of
this amount unless such Non-United States Holder is entitled to a reduced rate
of withholding tax under the provisions of an income tax treaty, in which case
the tax will be withheld at the reduced rate. If the Company collects United
States withholding tax on the exchange of Preferred Stock for Debentures, a
Non-United States Holder may be eligible to obtain a refund of such tax from the
Internal Revenue Service if it establishes that
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the exchange does not give rise to dividend income, as described above under
"United States Holders -- Exchange of Preferred Stock for Debentures" or
otherwise establishes a complete or partial exemption from such withholding tax.
Payments on Debentures. Subject to the discussion of backup withholding
below, no withholding of United States federal income tax will be imposed with
respect to the payment by the Company or its paying agent of principal or
interest on Debentures to a Non-United States Holder, provided that (i) such
Non-United States Holder is not a controlled foreign corporation that is related
to the Company through stock ownership, (ii) such Non-United States Holder is
not a bank whose receipt of interest on the Debentures is described in Section
881(c)(3)(A) of the Code and (iii) either (y) such Non-United States Holder
certifies to the Company or its agent, under the penalties of perjury, that it
is not a United States person and provides its name and address on Form W-8 or
its equivalent or (z) a financial institution holding the Debentures on behalf
of such Non-United States Holder certifies to the Company or its agent, under
penalties of perjury, that such statement has been received by it and furnishes
the Company or its agent with a copy thereof.
Sale, Exchange or Retirement of the Debentures. Subject to the discussion
of backup withholding below, no United States federal income tax, including
withholding tax, will be imposed with respect to any gain realized by a
Non-United States Holder upon the sale, exchange or retirement of Debentures
unless such Holder is an individual who is present in the United States for 183
days or more in the taxable year of such sale, exchange or retirement and
certain other conditions are met.
Federal Estate Taxes. Debentures beneficially owned by an individual who
at the time of death is a Non-United States Holder will not be subject to United
States federal estate tax as a result of such individual's death, provided that
the income on such Debentures would not have been, if received at the time of
such individual's death, effectively connected with the conduct of a trade or
business by such individual in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING. In general, information
reporting may apply to (i) the Debentures issued in exchange for Preferred Stock
pursuant to the Exchange Offer and the Payment in Lieu of Accumulated Dividends,
(ii) principal and interest on the Debentures, and (iii) the proceeds of sale of
the Debentures if any such payments are made to United States Holders other than
certain exempt recipients (such as corporations). A 31 percent backup
withholding tax will apply to payments described in the preceding sentence
unless the United States Holder provides a taxpayer identification number and
otherwise complies with applicable backup withholding rules.
No information reporting or backup withholding will be required with
respect to payments of principal and interest on the Debentures made by the
Company or any paying agent to a Non-United States Holder if the statement
described in (iii) under "Non-United States Holders -- Payments on Debentures"
has been received and the payor does not have actual knowledge that the
beneficial owner is a United States person. However, interest on Debentures
owned by Non-United States Holder will be required to be reported annually on
IRS Form 1042S.
Payments of the proceeds of the sale by a Non-United States Holder of
Debentures, and the exchange of Preferred Stock for Debentures pursuant to the
Exchange Offer, made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that if the
broker is, for federal income tax purposes, a United States person, a controlled
foreign corporation or a foreign person that derives 50% or more of its gross
income for a specified three-year period from the conduct of a trade or business
in the United States, such payments will not be subject to backup withholding
but may be subject to information reporting. Any such payments made to or
through the United States office of a broker will be subject to information
reporting and backup withholding unless the Non-United States Holder or the
beneficial owner certifies as to its non-United States status or otherwise
establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against the Holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
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DESCRIPTION OF DEBENTURES
The Debentures will constitute a series of notes issued under the
Subordinated Debt Indenture, dated as of July , 1995 (the "Indenture"),
between the Company and Chemical Bank, as trustee (the "Trustee"). The following
statements with respect to the Debentures are summaries and are subject to the
detailed provisions of the Trust Indenture Act and the Indenture, a copy of the
form of which has been filed as an exhibit to the Registration Statement. The
following summarizes the material provisions of the Indenture. The summaries do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Debentures and the
Indenture, including the definitions therein of certain terms capitalized and
not otherwise defined in this Prospectus. Wherever references are made to
particular provisions of the Indenture or terms defined therein, such provisions
or definitions are incorporated by reference as part of the statements made and
such statements are qualified in their entirety by such references.
The Indenture does not limit the amount of debt securities, debentures,
notes or other evidences of indebtedness that may be issued by the Company or
any of its Subsidiaries. The Indenture defines "Subsidiary" to mean any
corporation at least a majority of the outstanding securities of which having
ordinary voting power shall be owned by the Company and/or another Subsidiary or
Subsidiaries. All of the operating assets of the Company and its Subsidiaries
are owned by its Subsidiaries. Therefore, the Company's rights and the rights of
its creditors, including holders of Debentures, 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 Debentures
is, to a large extent, dependent upon the receipt by it of dividends or other
payments from its Subsidiaries.
The Indenture provides that additional debt securities may be issued from
time to time thereunder in one or more series without limitation as to aggregate
principal amount. The Indenture does not contain any covenant or other provision
which would afford holders of the Debentures protection in the event of a highly
leveraged transaction involving the Company or any Subsidiary.
GENERAL
The Debentures will constitute a series of unsecured, subordinated debt
securities, will be subordinated to Senior Indebtedness of the Company, as
described herein, will be limited in aggregate principal amount to the aggregate
principal amount of Debentures issued in the Exchange Offer and will mature on
July , 2025 (the "Stated Maturity"). The annual interest requirement on the
Debentures (assuming all shares of the Preferred Stock are exchanged) will be
$ .
QUARTERLY PAYMENTS
Interest on the Debentures will accrue from the Issuance Date at a rate of
% per annum and will be unconditionally payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year commencing
September 30, 1995, to the persons in whose names the Debentures are registered
on the relevant record dates, which will be March 15, June 15, September 15 and
December 15, respectively (each a "Record Date").
The amount of interest payable for any period will be computed on the basis
of twelve 30-day months and a 360-day year and, for any period shorter than a
full quarterly interest period, will be computed on the basis of the actual
number of days elapsed in such period. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of the
amount payable on such date will be made on the next succeeding day which is a
Business Day (and without interest or other payment in respect of any such
delay) with the same force and effect as if made on such date, subject to
certain rights of deferral described below. A "Business Day" shall mean any day
other than a day on which banking institutions in the State of New York are
authorized or obligated pursuant to law or executive order to close.
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CONSEQUENCES OF LATE PAYMENT OF INTEREST
If the Company fails to make an interest payment on any Interest Payment
Date, the Company will be subject to the Late Payment Penalty. The Late Payment
Penalty will consist of the following elements: (i) the Company shall be
obligated to pay the holders of Debentures, in addition to the amount of
interest accrued and unpaid which is due on the relevant Interest Payment Date
(the "Overdue Interest"), an amount equal to %, per annum, on the Overdue
Interest, calculated from the relevant Interest Payment Date to the date on
which the Company pays the Overdue Interest (the "Late Payment Period"),
compounded quarterly and payable when such Overdue Interest is paid, and (ii)
the Company shall not make any Capital Stock Payments during such Late Payment
Period. Because of the impact of the Late Payment Penalty, the Company believes
that it is unlikely that it will fail to make any interest payment when due. A
failure by the Company to make interest payments for 20 consecutive quarterly
interest payments periods shall constitute an Event of Default as of the last
day of such 20th consecutive interest payment period.
If the Company expects that interest will not be paid on any Interest
Payment Date, the Company shall give the holders of the Debentures and the
Trustee written notice prior to the earlier of (i) such Interest Payment Date
and (ii) the date the Company is required to give notice of the record date of
such interest payment to the NYSE or other applicable self-regulatory
organization or to the holders of the Debentures, but in any event such notice
shall be given not less than two Business Days prior to such record date. In the
event the Company does not pay interest on an Interest Payment Date, the record
date for any subsequent payment of such interest and the associated Late Payment
Penalty shall be established by the Company but in any event shall be not less
than five Business Days prior to the date of payment of such amounts. The
Company shall provide notice of payment of such amounts to the holders of
Debentures not less than 15 days prior to such record date.
OPTIONAL REDEMPTION
The Debentures will be redeemable at the option of the Company, in whole or
in part, at any time on or after September 1, 1997 and prior to maturity, upon
not less than 30 nor more than 60 days' notice, at a redemption price equal to
100% of the principal amount redeemed plus accrued and unpaid interest to the
date fixed for redemption. If fewer than all the Debentures are redeemed, the
Trustee under the Indenture shall select an appropriate and fair manner pursuant
to which the Debentures shall be redeemed.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or defease its obligations under the Indenture as
set forth below.
Upon satisfaction of certain terms of the Indenture, the Company may
discharge certain obligations to holders of the Debentures which have not
already been delivered to the Trustee for cancellation and which have either
become due and payable or are by their terms due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
Trustee cash or U.S. Government Obligations (as defined in the Indenture) as
trust funds in an amount certified to be sufficient to pay at maturity (or upon
redemption) the principal of and interest on the Debentures.
The Company may also, upon satisfaction of the conditions listed below,
discharge certain obligations to holders of Debentures at any time
("defeasance"). Upon satisfaction of certain terms of the Indenture, the Company
may instead be released with respect to the Debentures from the obligations
imposed by Section 9.1 of the Indenture (which contains the covenant described
below limiting consolidations, mergers and conveyances of assets), and omit to
comply with such Section without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (i) the Company irrevocably deposits with the Trustee cash or U.S.
Government Obligations, as trust funds in an amount certified to be sufficient
to pay at maturity (or upon redemption) the principal of and interest on all
outstanding Debentures; (ii) the Company delivers to the Trustee an opinion of
counsel to the effect that the holders of the Debentures 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
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defeasance or covenant defeasance had not occurred (in the case of a defeasance,
such opinion must be based on a ruling of the Internal Revenue Service or a
change in United States federal income tax law occurring after the date of the
Indenture, since such a result would not occur under current tax law); and (iii)
(a) no event or condition shall exist that, pursuant to certain provisions
described under "Subordination" below, would prevent the Company from making
payments of principal of or interest on the Debentures at the date of the
irrevocable deposit referred to above or at any time during the period ending on
the 91st day after such deposit date and (b) the Company delivers to the Trustee
an opinion of counsel to the effect (1) the trust funds will not be subject to
any rights of holders of Senior Indebtedness and (2) after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, except that if a court were to rule under any such
law in any case or proceeding that the trust funds remained property of the
Company, then the Trustee and the holders of the Debentures would be entitled to
certain rights as secured creditors in such trust funds.
EVENTS OF DEFAULT
An Event of Default is defined under the Indenture with respect to
Debentures as being: (a) default in payment of any principal of the Debentures,
either at maturity, upon any redemption, by declaration or otherwise; (b)
default for 20 consecutive quarterly interest periods in payment of any interest
on the Debentures, effective as of the last day of such interest period; (c)
default for 90 days after written notice in the observance or performance of any
covenant or warranty in the Debentures or the Indenture other than (i) a
covenant or default in the performance of which, or breach of which, is dealt
with otherwise below or, (ii) if the default described in this clause (c) is the
result of changes in generally accepted accounting principles; or (d) certain
events of bankruptcy, insolvency or reorganization of the Company.
The Indenture provides that, (a) if an Event of Default described in
clauses (a), (b) or (c) above (if the Event of Default under clause (c) is with
respect to less than all series of debt securities then outstanding under the
Indenture) occurs, the Trustee or the holders of not less than 25 percent in
principal amount of the outstanding Debentures may then declare the entire
principal of all outstanding Debentures and interest accrued thereon to be due
and payable immediately and (b) if an Event of Default due to a default
described in clause (c) above which is applicable to all series of debt
securities then outstanding under the Indenture or due to certain events of
bankruptcy, insolvency and reorganization of the Company, shall have occurred
and be continuing, the Trustee or the holders of not less than 25 percent in
principal amount of all securities then outstanding under the Indenture (treated
as one class) may declare the entire principal of all outstanding Debentures and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such past defaults or an Event of Default may be waived (except a
continuing default in payment of principal of or interest on such debt
securities) by the holders of a majority in aggregate principal amount of the
outstanding Debentures or by the holders of a majority in aggregate principal
amount of all securities then outstanding (treated as one class), as applicable.
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of care,
to be indemnified by the holders of Debentures issued under the Indenture before
proceeding to exercise any right or power under the Indenture at the request of
such holders. Subject to such provisions in the Indenture for the
indemnification of the Trustee and certain other limitations, the holders of a
majority in aggregate principal amount of the outstanding Debentures issued
under the Indenture may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee.
The Indenture provides that no holder of Debentures issued under the
Indenture may institute any action against the Company under the Indenture
(except actions for payment of overdue principal or interest) unless such holder
previously shall have given to the Trustee written notice of default and
continuance thereof and unless the holders of not less than 25 percent in
principal amount of the outstanding Debentures issued under the Indenture shall
have requested the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity and the Trustee shall not have instituted such
action within 60 days of such request and
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the Trustee shall not have received direction inconsistent with such written
request by the holders of a majority in principal amount of the outstanding
Debentures issued under the Indenture.
The Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any default
that exists.
MODIFICATION AND WAIVER
The Indenture provides that the Company and the Trustee may enter into
supplemental indentures (which conform to the provisions of the Trust Indenture
Act) without the consent of the holders to: (a) secure any debt securities
issued thereunder (including the Debentures); (b) evidence the assumption by a
successor of the obligations of the Company; (c) add further covenants for the
protection of the holders; (d) cure any ambiguity or correct any inconsistency
in the Indenture, so long as such action will not adversely affect the interests
of the holders; (e) establish the form or terms of debt securities of any
series; or (f) evidence the acceptance of appointment by a successor trustee.
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than the majority in
principal amount of debt securities of each series issued under the Indenture
then outstanding and affected (voting as one class) to add any provisions to, or
change in any manner or eliminate any of the provisions of, the Indenture or
modify in any manner the rights of the holders of the debt securities of each
series so affected; provided that such changes conform to provisions of the
Trust Indenture Act and provided that the Company and the Trustee may not,
without the consent of each holder of outstanding debt securities affected
thereby, (a) extend the final maturity or the principal of any debt securities,
or reduce the principal amount thereof or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or change the currency in which the principal thereof (including any amount in
respect of original issue discount) or interest thereon is payable, or reduce
the amount of any original issue discount security payable upon acceleration or
provable in bankruptcy or alter certain provisions of the Indenture relating to
debt securities not denominated in U.S. dollars or for which conversion to
another currency is required to satisfy the judgment of any court, or impair the
right to institute suit for the enforcement of any payment on any debt
securities when due or (b) reduce the aforesaid percentage in principal amount
of debt securities of any series issued under the Indenture, the consent of the
holders of which is required for any such modification.
The Indenture may not be amended to alter the subordination of any
outstanding subordinated debt securities issued thereunder (including the
Debentures) without the consent of each holder of Senior Indebtedness then
outstanding that would be adversely affected thereby.
CONSOLIDATION, MERGER AND CONVEYANCE OF ASSETS
The Indenture provides that the Company will not consolidate with or merge
into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless the corporation formed
by such consolidation or into which the Company is merged or the person which
acquires such assets shall expressly assume the Company's obligations under the
Indenture and the debt securities issued thereunder (including the Debentures)
and immediately after giving effect to such transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would become an Event
of Default, shall have happened and be continuing.
SUBORDINATION
The Debentures will be expressly subordinate and junior in right of
payment, to the extent and in the manner set forth in the Indenture, to all
"Senior Indebtedness" of the Company. The Indenture defines "Senior
Indebtedness" as obligations (other than nonrecourse obligations, the debt
securities issued under the Indenture (including the Debentures) 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.
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In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property or (b) that (i) a
default shall have occurred with respect to the payment of principal, premium,
if any, or interest on or other monetary amounts due and payable on any Senior
Indebtedness or (ii) there shall have occurred an Event of Default (other than a
default in the payment of principal, premium, if any, or interest, or other
monetary amounts due and payable) with respect to any Senior Indebtedness, as
defined therein or in the instrument under which the same is outstanding,
permitting the holder or holders thereof to accelerate the maturity thereof
(with notice or lapse of time, or both), and such Event of Default shall have
continued beyond the period of grace, if any, in respect thereof, and such
default or Event of Default shall not have been cured or waived or shall not
have ceased to exist, or (c) that the principal of and accrued interest on the
subordinated debt securities (including the Debentures) shall have been declared
due and payable upon an Event of Default pursuant to Section 5.1 of the
Indenture and such declaration shall not have been rescinded and annulled as
provided therein, then the holders of all Senior Indebtedness shall first be
entitled to receive payment of the full amount unpaid thereon, or provision
shall be made for such payment in money or money's worth, before the holders of
any of the subordinated debt securities (including the Debentures) are entitled
to receive a payment on account of the principal, premium, if any, or interest
on the indebtedness evidenced by such subordinated debt securities.
On May 2, 1995, approximately $1.5 billion of Senior Indebtedness was
outstanding. The Indenture does not restrict the amount of Senior Indebtedness
that the Company may incur. In addition, the Debentures will also be effectively
subordinate to all existing and future obligations of the Company's
subsidiaries. On May 2, 1995, approximately $1.5 billion of indebtedness of the
Company's subsidiaries not included in Senior Indebtedness was outstanding.
FORM OF DEBENTURES
The Debentures will be issued in fully registered form, without coupons.
Investors may elect to hold Debentures directly or, subject to the rules and
procedures of DTC described below, hold interests in a global certificate (the
"Global Certificate") registered in the name of DTC or its nominee.
Certain of the following information concerning the procedures and record
keeping with respect to ownership interests in the Debentures, payment of
interest and other payments on the Debentures to DTC Participants or Beneficial
Owners (as hereafter defined), confirmation and transfer of ownership interests
in the Debentures and other related transactions by and between DTC, the DTC
Participants and Beneficial Owners is based solely on information contained in a
published report of DTC.
DTC, an automated clearinghouse for securities transactions, will act as
securities depository for the Debentures. DTC is a limited-purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the 1934 Act, as amended. DTC was created to hold securities
of DTC Participants and facilitate the clearance and settlement of securities
transactions among DTC Participants in such securities through electronic
book-entry changes in accounts of DTC Participants, thereby eliminating the need
for physical movement of security certificates. DTC Participants include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations, some of which (and/or their representatives)
own DTC. Access to the DTC system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a DTC Participant, either directly or indirectly.
Upon the issuance of a Global Certificate, DTC will credit on its
book-entry registration and transfer system, the principal amount of the
Debentures represented by such Global Certificate to the accounts of
institutions that have accounts with DTC. The accounts to be credited shall be
designated by the holders that sold such Debentures to such DTC Participants.
Ownership of beneficial interests in a Global Certificate will be limited to DTC
Participants or persons that may hold interests through DTC Participants.
Ownership of beneficial interests in a Global Certificate will be shown on, and
the transfer of that ownership will be effected
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only through, records maintained by DTC for such Global Certificate and on the
records of DTC Participants (with respect to the interest of persons holding
through DTC Participants). So long as DTC, or its nominee, is the owner of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Debentures represented by such Global
Certificate for all purposes under the Indenture.
Each person owning a beneficial interest in a Global Certificate must rely
on the procedures of DTC and, if such person is not a DTC Participant, on the
procedures of the DTC Participant through which such person owns its interest,
to exercise any rights of a holder under the Indenture. The Company understands
that under existing industry practices, if it requests any action of holders or
if an owner of a beneficial interest in a Global Certificate desires to give or
take any action which a holder is entitled to give or take under the Indenture,
DTC would authorize DTC Participants holding the relevant beneficial interests
to give or take such action, and such DTC Participants would authorize
beneficial owners owning through such DTC Participants to give or take such
action or would otherwise act upon the instructions of beneficial owners holding
through them.
Principal and interest payments on the Debentures represented by a Global
Certificate registered in the name of DTC or its nominee will be made to DTC or
its nominee, as the case may be, as the registered owner of such Global
Certificate. The Company understands that it is DTC's practice to credit any DTC
Participant's accounts with payments in amounts proportionate to their
respective beneficial interests in the Debentures represented by the Global
Certificate as shown on the records of DTC on the date payment is scheduled to
be made, unless DTC has reason to believe that it will not receive payment on
such date. The Company expects that payments by DTC Participants to owners of
beneficial interests in such Global Certificate held through such DTC
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such DTC
Participants. Accordingly, although owners who hold Debentures through DTC
Participants will not possess Debentures in certificated form, the DTC
Participants will provide a mechanism by which holders of Debentures will
receive payments and will be able to transfer their interests.
None of the Company, the Trustee or any other agent of the Company will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interest in such Global
Certificate or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
If DTC or a successor depository is at any time unwilling or unable to
continue as depository of the Global Certificates and a successor depository is
not appointed by the Company within ninety days, the Company will issue
certificated Debentures in exchange for the Global Certificates. In addition,
the Company may at any time determine not to have Debentures represented by a
Global Certificate and, in such event, will issue certificated Debentures equal
in principal amount to such beneficial interest registered in its name and will
be entitled to physical delivery of such certificated Debentures.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by a purchaser in immediately
available funds. While the Debentures are in the book-entry system described
above, all payments of principal and interest will be made by the Trustee on
behalf of the Company to DTC in immediately available funds.
Debentures represented by Global Certificates registered in the name of DTC
or its nominee will trade in DTC's Same-Day Fund Settlement System until
maturity. During such period, secondary market trading activity in the
Debentures will settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on the
trading activity in the Debentures.
GOVERNING LAW
The Indenture and the Debentures are governed by and construed in
accordance with the laws of the State of New York.
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CONCERNING THE TRUSTEE
Chemical Bank is one of a number of banks with which the Company and its
subsidiaries maintain ordinary banking relationships and with which the Company
and its subsidiaries maintain credit facilities. Chemical Bank is also Trustee
under that certain Senior Debt Indenture dated as of July 19, 1990 relating to
certain Senior Indebtedness of the Company.
DESCRIPTION OF THE PREFERRED STOCK
GENERAL
The following description relating to the Preferred Stock set forth herein
does not purport to be complete and is subject to, and qualified in its entirety
by, the provisions of the Company's Restated Certificate of Incorporation
("Certificate"). Copies of the Certificate are available from the Company upon
request.
The Preferred Stock ranks equally with all other series of preferred stock
of the Company (the only other preferred stock of the Company currently
outstanding is 2.5 million shares of its series of $3.50 convertible preferred
stock) and senior to the Company's Junior Preferred Stock (none of which is
currently outstanding) and common stock upon liquidation and as to dividends and
redemption. If dividends or amounts payable on liquidation are not paid in full
on the preferred stock of all series, then all series share ratably in the
amount available therefor.
DIVIDENDS
Holders of the shares of the Preferred Stock are entitled to receive, when
and if declared by the Board of Directors, an annual cash dividend of $2.21 per
share, payable in quarterly installments on March 1, June 1, September 1 and
December 1. Dividends on the Preferred Stock are cumulative. Dividends are
payable to holders of record as they appear on the stock books of the Company on
such record dates not more than 60 nor less than 10 days preceding the payment
dates as shall be fixed by the Board of Directors.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution or winding up of the Company,
the holders of shares of the Preferred Stock are entitled to receive out of
assets of the Company available for distribution to shareholders, before any
distribution of assets is made to holders of common stock, liquidating
distributions in the amount of $25 per share plus dividends accrued and
accumulated but unpaid to the redemption date. If upon any liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the Preferred Stock and any other Preferred Stock ranking as to any such
distribution on a parity with the Preferred Stock are not paid in full, the
holders of the Preferred Stock and of any other preferred stock of the Company
will share ratably in any such distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. After payment of the
full amount of the liquidating distribution to which they are entitled, the
holders of shares of the Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Company. Neither a
consolidation or merger of the Company with another corporation nor a sale or
transfer of all or part of the Company's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the Company.
OPTIONAL REDEMPTION
The Preferred Stock is not subject to any mandatory redemption or sinking
fund provision. The Preferred Stock is redeemable on at least 30 but not more
than 60 days' notice, at the option of the Company, as a whole or in part, at
any time on and after September 1, 1997 at a redemption price equal to $25 per
share plus dividends accrued and accumulated but unpaid to the redemption date.
If full cumulative dividends on the Preferred Stock have not been paid, the
Preferred Stock may not be redeemed in part and the Company may not purchase or
acquire any shares of the Preferred Stock otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of the Preferred Stock.
If less than all the outstanding shares of the Preferred Stock are to be
redeemed, the Company will select those to be redeemed by lot or a substantially
equivalent method.
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VOTING RIGHTS
Except as indicated below, the holders of shares of the Preferred Stock
have no voting rights. If the equivalent of six quarterly dividends payable on
the Preferred Stock or on any other preferred stock is in arrears, the number of
directors of the Company will be increased by two and the holders of all
outstanding shares of the Preferred Stock, voting as a single class without
regard to series, will be entitled to elect the additional two directors until
all dividends in arrears have been paid or declared and set apart for payment.
MISCELLANEOUS
The Preferred Stock is not convertible into, or exchangeable for, shares of
common stock of the Company. The Preferred Stock has no preemptive rights. All
of the Preferred Stock is fully paid and nonassessable. The Preferred Stock may
not be called, retired or in any way redeemed, except pursuant to the redemption
provisions set out above.
LEGAL OPINIONS
The validity of the Debentures will be passed upon for the Company by J.
Furman Lewis, Esq., Senior Vice President and General Counsel of the Company,
and for the Dealer Managers by Davis Polk & Wardwell. Miller & Chevalier,
Chartered, special tax counsel to the Company, has passed upon certain United
States federal income tax considerations with respect to the Debentures.
EXPERTS
The consolidated financial statements and schedules included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994,
incorporated by reference in this Prospectus and Registration Statement, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing therein and incorporated herein by reference. The
financial statements and schedules referred to above are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
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Facsimile copies of the Letter of Transmittal will be accepted. Letters of
Transmittal, certificates representing shares of the Preferred Stock, Notices of
Guaranteed Delivery and any other required documents should be sent by each
stockholder or his broker, dealer, commercial bank, trust company or other
nominee to the Exchange Agent at one of the addresses as set forth below:
The Exchange Agent is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY HAND/OVERNIGHT COURIER BY MAIL
Tenders & Exchanges Tenders & Exchanges
Suite 4680-WCI P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WCI
New York, NY 10005 Jersey City, NJ 07303
Facsimile Transmission
(For Eligible Institutions Only)
(201) 222-4720
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
Shareholder Inquiries Regarding Lost Certificates:
1-201-324-0137
Any questions or requests for assistance or additional copies of this
Prospectus, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Managers at their respective
telephone numbers and locations set forth below. You may also contact your
broker, dealer, commercial bank or trust company or other nominee for assistance
concerning the Exchange Offer.
The Information Agent is:
MORROW & CO., INC.
909 Third Avenue 14755 Preston Road, Suite 725
New York, New York 10022 Dallas, Texas 75240
Banks and Brokers call toll-free:
1-800-662-5200
All others call toll-free:
1-800-566-9058
The Dealer Managers for the Exchange Offer are:
Lehman Brothers
Liability Management Group
Three World Financial Center
200 Vesey Street
New York, NY 10285
Contact: David B. Parsons
1-800-438-3242 (toll free)
1-212-528-7581 (collect)
Morgan Stanley & Co.
Incorporated
1221 Avenue of the Americas
New York, New York
1-800-422-6464 ext. 6905 (toll free)
Smith Barney Inc.
Liability Management Group
388 Greenwich Street
New York, NY 10013
Contact: Paul S. Galant
1-800-813-3754 (toll free)
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company, a Delaware corporation, is empowered by Section 145 of the
General Corporation Law of the State of Delaware, subject to the procedures and
limitations stated therein, to indemnify any person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any threatened, pending or
completed action, suit or proceeding in which such person is made party by
reason of their being or having been a director, officer, employee or agent of
the Company. The statute provides that indemnification pursuant to its
provisions is not exclusive of other rights of indemnification to which a person
may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors, or otherwise. The By-laws of the Company provide for
indemnification by the Company of its directors and officers to the fullest
extent permitted by the General Corporation Law of the State of Delaware. In
addition, the Company has entered into indemnity agreements with its directors
and certain officers providing for, among other things, the indemnification of
and the advancing of expenses to such individuals to the fullest extent
permitted by law, and to the extent insurance is maintained, for the continued
coverage of such individuals.
Policies of insurance are maintained by the Company under which the
directors and officers of the Company are insured, within the limits and subject
to the limitations of the policies, against certain expenses in connection with
the defense of actions, suits or proceedings, and certain liabilities which
might be imposed as a result of such actions, suits or proceedings, to which
they are parties by reason of being or having been such directors or officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
NO. DESCRIPTION
- ------- -----------------------------------------------------------------------------------
**1.1 Form of Dealer Managers Agreement between the Company and the Dealer Managers.
*2.1 Agreement and Plan of Merger, dated as of December 12, 1994, among Williams, WC
Acquisition Corp. and Transco (filed as Exhibit (c)(1) to Schedule 14D-1, dated
December 16, 1994).
*2.2 Amendment to Agreement and Plan of Merger, dated as of February 17, 1995 (filed as
Exhibit 6 to Amendment No. 8 to Schedule 13D, dated February 23, 1995).
*4.1 Form of Senior Debt Indenture (filed as Exhibit 4.1 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).
**4.2 Form of Subordinated Debt Indenture.
*4.3 Form of Floating Rate Senior Note (filed as Exhibit 4.3 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).
*4.4 Form of Fixed Rate Senior Note (filed as Exhibit 4.4 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).
*4.5 Form of Floating Rate Subordinated Note (filed as Exhibit 4.5 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).
*4.6 Form of Fixed Rate Subordinated Note (filed as Exhibit 4.6 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).
*4.7 Form of Debt Warrant Agreement (filed as Exhibit 4.7 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).
*4.8 Form of Stock Warrant Agreement (filed as Exhibit 4.8 to the Form S-3 Registration
Statement No. 33-49835 filed July 27, 1993).
II-1
46
EXHIBIT
NO. DESCRIPTION
- ------- -----------------------------------------------------------------------------------
*4.9 Restated Certificate of Incorporation of the Company (filed as Exhibit 4(a) to Form
8-B Registration Statement filed August 20, 1987).
*4.10 Certificate of Amendment of Restated Certificate of Incorporation of the Company,
dated May 20, 1994 (filed as Exhibit 3(d) to Form 10-K for the year ended December
31, 1994).
*4.11 Certificate of designation with respect to the $2.21 Cumulative Preferred Stock
(filed as Exhibit 4.3 to the Registration Statement on Form S-3 filed August 19,
1992).
*4.12 Certificate of Increase of Authorized Number of Shares of Series A Junior
Participating Preferred Stock (filed as Exhibit 3(c) to Form 10-K for the year
ended December 31, 1988).
*4.13 Form of Certificate of Designation Preferences and Rights with respect to the $3.50
Cumulative Convertible Preferred Stock (filed as Exhibit 4.1 to Amendment No. 2 to
Form S-4 Registration Statement No. 33-57639, filed March 30, 1995).
*4.14 Amended and Restated Rights Agreement, dated as of July 12, 1988, between the
Company and First Chicago Trust Company of New York (filed as Exhibit 4(c) to Form
8, dated July 28, 1988).
*4.15 By-laws of the Company (filed as Exhibit 3 to Form 10-Q for the quarter ended
September 30, 1993).
*4.16 U.S. $800,000,000 Credit Agreement, dated as of February 23, 1995, among the
Company and certain of its subsidiaries and the banks named therein and Citibank,
N.A., as agent (filed as Exhibit 4(b) to Form 10-K for the year ended December 31,
1994).
*4.17 6% Convertible Subordinated Debenture Due 2005 and Warrant to Purchase Common Stock
issued to Williams Holdings of Delaware on April 15, 1995 (filed as Exhibit 4.10 to
Form S-8 Registration Statement No. 33-58969, filed May 1, 1995).
*4.18 Form of Senior Debt Indenture between the Company and Chemical Bank, Trustee,
relating to the 10 1/4% Debentures, due 2020; the 9 3/8% Debentures, due 2021; the
8 1/4% Notes, due 1998; and Medium-Term Notes (8.50%-9.31%), due 1996 through 2001;
the 7 1/2% Notes, due 1999, and the 8 7/8% Debentures, due 2012 (filed as Exhibit
4.1 to Form S-3 Registration Statement No. 33-33294, filed February 2, 1990).
**5.1 Opinion and Consent of J. Furman Lewis, Esq., Senior Vice President and General
Counsel of the Company.
8.1 Tax Opinion and Consent of Miller & Chevalier, Chartered.
*12.1 Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements (filed as Exhibit 12 to Form 10-K for the year ended December
31, 1994).
23.1 Consent of Ernst & Young LLP.
**23.2 Consent of J. Furman Lewis, Esq. (contained in Exhibit 5.1).
23.3 Consent of Miller & Chevalier, Chartered (contained in Exhibit 8.1).
**24.1 Directors' Powers of Attorney.
**25.1 Statement of Eligibility of Trustee.
99.1 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other
Nominees.
99.2 Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and other
nominees to their clients.
99.3 Form of Letter to holders of shares of Preferred Stock dated , 1995.
99.4 Form of Letter of Transmittal.
99.5 Form of Notice of Guaranteed Delivery.
99.6 Form of Questions and Answers Sheet to be sent to holders of shares of the
Preferred Stock and to be used by Brokers, Dealers, Commercial Banks, Trust
Companies and other nominees in responding to inquiries from their clients.
II-2
47
- ---------------
* Each such exhibit has heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and is incorporated herein by
reference.
** Previously filed.
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's Annual Report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan annual
report pursuant to Section 15(d) of the Securities Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(2) To respond to requests for information incorporated by reference
into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.
(3) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
48
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 2 to the registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Tulsa, State of Oklahoma, on July 17, 1995.
THE WILLIAMS COMPANIES, INC.
(Registrant)
By: /s/ J. Furman Lewis
------------------------------------
J. Furman Lewis
Senior Vice President
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- --------------
Chairman of the Board, Chief July 17, 1995
- --------------------------------------------- Executive Officer, President
Keith E. Bailey* and Director (principal
executive officer)
Senior Vice President Finance July 17, 1995
- --------------------------------------------- and Chief Financial Officer
Jack D. McCarthy* (principal financial officer)
Controller (principal July 17, 1995
- --------------------------------------------- accounting officer)
Gary R. Belitz*
Director July 17, 1995
- ---------------------------------------------
Harold W. Andersen*
Director July 17, 1995
- ---------------------------------------------
Ralph E. Bailey*
Director July 17, 1995
- ---------------------------------------------
Glenn A. Cox*
Director July 17, 1995
- ---------------------------------------------
Thomas H. Cruikshank*
Director July 17, 1995
- ---------------------------------------------
Ervin S. Duggan
Director July 17, 1995
- ---------------------------------------------
Patricia L. Higgins
II-4
49
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- --------------
Director July 17, 1995
- ---------------------------------------------
Robert J. LaFortune
Director July 17, 1995
- ---------------------------------------------
James C. Lewis*
Director July 17, 1995
- ---------------------------------------------
Jack A. MacAllister*
Director July 17, 1995
- ---------------------------------------------
James A. McClure*
Director July 17, 1995
- ---------------------------------------------
Peter C. Meinig
Director July 17, 1995
- ---------------------------------------------
Kay A. Orr*
Director July 17, 1995
- ---------------------------------------------
Gordon R. Parker*
Director July 17, 1995
- ---------------------------------------------
Joseph H. Williams*
*By: /s/ J. Furman Lewis
--------------------------------------------------------------
J. Furman Lewis
Attorney-in-fact
II-5
50
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------- ------------
**1.1 Form of Dealer Managers Agreement between the Company and the Dealer
Managers.
*2.1 Agreement and Plan of Merger, dated as of December 12, 1994, among
Williams, WC Acquisition Corp. and Transco (filed as Exhibit (c)(1) to
Schedule 14D-1, dated December 16, 1994).
*2.2 Amendment to Agreement and Plan of Merger, dated as of February 17, 1995
(filed as Exhibit 6 to Amendment No. 8 to Schedule 13D, dated February
23, 1995).
*4.1 Form of Senior Debt Indenture (filed as Exhibit 4.1 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).
**4.2 Form of Subordinated Debt Indenture.
*4.3 Form of Floating Rate Senior Note (filed as Exhibit 4.3 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).
*4.4 Form of Fixed Rate Senior Note (filed as Exhibit 4.4 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).
*4.5 Form of Floating Rate Subordinated Note (filed as Exhibit 4.5 to the Form
S-3 Registration Statement No. 33-33294 filed February 2, 1990).
*4.6 Form of Fixed Rate Subordinated Note (filed as Exhibit 4.6 to the Form
S-3 Registration Statement No. 33-33294 filed February 2, 1990).
*4.7 Form of Debt Warrant Agreement (filed as Exhibit 4.7 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).
*4.8 Form of Stock Warrant Agreement (filed as Exhibit 4.8 to the Form S-3
Registration Statement No. 33-49835 filed July 27, 1993).
*4.9 Restated Certificate of Incorporation of the Company (filed as Exhibit
4(a) to Form 8-B Registration Statement filed August 20, 1987).
*4.10 Certificate of Amendment of Restated Certificate of Incorporation of the
Company, dated May 20, 1994 (filed as Exhibit 3(d) to Form 10-K for the
year ended December 31, 1994).
*4.11 Certificate of designation with respect to the $2.21 Cumulative Preferred
Stock (filed as Exhibit 4.3 to the Registration Statement on Form S-3
filed August 19, 1992).
*4.12 Certificate of Increase of Authorized Number of Shares of Series A Junior
Participating Preferred Stock (filed as Exhibit 3(c) to Form 10-K for the
year ended December 31, 1988).
*4.13 Form of Certificate of Designation Preferences and Rights with respect to
the $3.50 Cumulative Convertible Preferred Stock (filed as Exhibit 4.1 to
Amendment No. 2 to Form S-4 Registration Statement No. 33-57639, filed
March 30, 1995).
*4.14 Amended and Restated Rights Agreement, dated as of July 12, 1988, between
the Company and First Chicago Trust Company of New York (filed as Exhibit
4(c) to Form 8, dated July 28, 1988).
*4.15 By-laws of the Company (filed as Exhibit 3 to Form 10-Q for the quarter
ended September 30, 1993).
*4.16 U.S. $800,000,000 Credit Agreement, dated as of February 23, 1995, among
the Company and certain of its subsidiaries and the banks named therein
and Citibank, N.A., as agent (filed as Exhibit 4(b) to Form 10-K for the
year ended December 31, 1994).
51
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------- ------------
*4.17 6% Convertible Subordinated Debenture Due 2005 and Warrant to Purchase
Common Stock issued to Williams Holdings of Delaware on April 15, 1995
(filed as Exhibit 4.10 to Form S-8 Registration Statement No. 33-58969,
filed May 1, 1995).
*4.18 Form of Senior Debt Indenture between the Company and Chemical Bank,
Trustee, relating to the 10 1/4% Debentures, due 2020; the 9 3/8%
Debentures, due 2021; the 8 1/4% Notes, due 1998; and Medium-Term Notes
(8.50%-9.31%), due 1996 through 2001; the 7 1/2% Notes, due 1999, and the
8 7/8% Debentures, due 2012 (filed as Exhibit 4.1 to Form S-3
Registration Statement No. 33-33294, filed February 2, 1990).
**5.1 Opinion and Consent of J. Furman Lewis, Esq., Senior Vice President and
General Counsel of the Company.
8.1 Tax Opinion and Consent of Miller & Chevalier, Chartered.
*12.1 Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividend Requirements (filed as Exhibit 12 to Form 10-K for the
year ended December 31, 1994).
23.1 Consent of Ernst & Young LLP.
**23.2 Consent of J. Furman Lewis, Esq. (contained in Exhibit 5.1).
23.3 Consent of Miller & Chevalier, Chartered (contained in Exhibit 8.1).
**24.1 Directors' Powers of Attorney.
**25.1 Statement of Eligibility of Trustee.
99.1 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
other Nominees.
99.2 Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies
and other nominees to their clients.
99.3 Form of Letter to holders of shares of Preferred Stock dated
, 1995.
99.4 Form of Letter of Transmittal.
99.5 Form of Notice of Guaranteed Delivery.
99.6 Form of Questions and Answers Sheet to be sent to holders of shares of
the Preferred Stock and to be used by Brokers, Dealers, Commercial Banks,
Trust Companies and other nominees in responding to inquiries from their
clients.
- ---------------
* Each such exhibit has heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and is incorporated herein by
reference.
** Previously filed.