SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
THE WILLIAMS COMPANIES, INC.
(Name of Subject Company (issuer) and Filing Person (offeror))
OPTIONS TO PURCHASE COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
969457100
(CUSIP Number of Class of Underlying Securities)
BRIAN K. SHORE, SECRETARY
THE WILLIAMS COMPANIES, INC.
ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(918) 573-2000
(Name, address and telephone number of person authorized to receive notices
and communications on behalf of filing persons)
Copies to:
PAMELA BAKER, ESQ.
STEPHEN E. FOX, ESQ.
SONNENSCHEIN NATH & ROSENTHAL
8000 SEARS TOWER
CHICAGO, ILLINOIS 60606
(312) 876-7934
CALCULATION OF FILING FEE
TRANSACTION VALUATION(1) AMOUNT OF FILING FEE(2)
$16,998,610 $1,376
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(1) Calculated solely for purposes of determining the filing fee. This amount
assumes that options to purchase an aggregate of 13,446,724 shares of
common stock of The Williams Companies, Inc. having an aggregate value of
$16,998,610 as of May 16, 2003 will be exchanged pursuant to this offer.
The aggregate value of such options was calculated based on the
Black-Scholes option pricing model.
(2) The amount of the filing fee, calculated in accordance with Section 13(e)
of the Securities Exchange Act of 1934, as amended, equals $80.90 for each
$1,000,000 of the value of the transaction.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable.
Form of Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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ITEM 1. SUMMARY TERM SHEET.
The information set forth under "Summary of Terms" in the Offer to
Exchange, dated May 27, 2003 (the "Offer to Exchange"), attached hereto as
Exhibit (a)(1), is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) The name of the issuer is The Williams Companies, Inc., a Delaware
corporation (the "Company"), and the address of its principal executive offices
is One Williams Center, Tulsa, Oklahoma 74172. The telephone number of its
principal executive offices is (918) 573-2000.
(b) This Tender Offer Statement on Schedule TO relates to an offer by the
Company to eligible employees to exchange certain options to purchase shares of
the Company's common stock, par value $1.00 per share, having an exercise price
of $10.00 or more that were granted prior to November 27, 2002 under (i) The
Williams Companies, Inc. 1990 Stock Plan, (ii) The Williams Companies, Inc.
Stock Plan for Non-Officer Employees, (iii) The Williams Companies, Inc. 1996
Stock Plan, (iv) The Williams Companies, Inc. International Stock Plan, (v) The
Williams Companies, Inc. 2001 Stock Plan and (vi) The Williams Companies, Inc.
2002 Incentive Plan (collectively, the "Option Plans") for replacement options
to purchase common stock that will be granted under the 2002 Incentive Plan,
upon the terms and subject to the conditions described in the Offer to Exchange
and the related Election Form attached hereto as Exhibit (a)(3).
As of May 16, 2003, there were outstanding options to purchase
36,233,409 shares of the Company's common stock under the Option Plans, of which
options to purchase 13,446,724 shares are eligible for exchange pursuant to the
Offer.
The information set forth in the Offer to Exchange under Section 2
("Eligibility -- Eligible Options") is incorporated herein by reference.
(c) The information set forth in the Offer to Exchange under Section 8
("Price Range of Common Stock") is incorporated herein by reference. No trading
market exists for the options eligible for exchange.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) The Company is also the filing person. The information set forth under
Item 2(a) above is incorporated herein by reference. The information set forth
in the Offer to Exchange under Section 10 ("Information Concerning Williams")
and Section 11 ("Interests of Directors and Executive Officers; Transactions and
Arrangements Concerning the Options and our Common Stock") is incorporated
herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the Offer to Exchange under Section 1
("Purpose of the Offer"), Section 2 ("Eligibility"), Section 3 ("Number of
Options; Exchange Ratios"), Section 4 ("Procedures for Participating in the
Offer"), Section 5 ("Acceptance of Options for
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Exchange and Issuance of Replacement Options"), Section 6 ("Extension of Offer;
Termination; Amendment"), Section 9 ("Terms of Replacement Options; Source and
Amount of Consideration"), Section 12 ("Accounting Consequences of the Offer")
and Section 14 ("Material U.S. Federal Income Tax Consequences") is incorporated
herein by reference.
(b) The information set forth in the Offer to Exchange under Section 11
("Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning the Options and our Common Stock") is incorporated herein by
reference.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(e) The information set forth in the Offer to Exchange under Section 11
("Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning the Options and our Common Stock") is incorporated herein by
reference.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
(a) The information set forth in the Offer to Exchange under Section 1
("Purpose of the Offer") and Section 12 ("Accounting Consequences of the Offer")
is incorporated herein by reference.
(b) The information set forth in the Offer to Exchange under Section 5
("Acceptance of Options for Exchange and Issuance of Replacement Options") and
Section 9 ("Terms of Replacement Options; Source and Amount of Consideration")
is incorporated herein by reference.
(c) The information set forth in the Offer to Exchange under Section 10
("Information Concerning Williams") is incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the Offer to Exchange under Section 9
("Terms of Replacement Options; Source and Amount of Consideration") and Section
15 ("Fees and Expenses") is incorporated herein by reference.
(b) Not applicable.
(d) Not applicable.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in the Offer to Exchange under Section 11
("Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning the Options and our Common Stock") is incorporated herein by
reference.
(b) The information set forth in the Offer to Exchange under Section 11
("Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning the Options and our Common Stock") is incorporated herein by
reference.
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ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) Not applicable.
ITEM 10. FINANCIAL STATEMENTS
(a) The information set forth (i) in the Offer to Exchange under Section
10 ("Information Concerning Williams") and Section 16 ("Additional
Information"), (ii) on pages 94 through 182 of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2002 filed with the Securities
and Exchange Commission on March 19, 2003, (iii) in Exhibit 12 ("Computations of
Ratios to Fixed Charges") to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 filed with the Securities and Exchange
Commission on March 19, 2003 and (iv) on pages 2 through 29 of the Company's
Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2003 filed with
the Securities and Exchange Commission on May 13, 2003, is incorporated herein
by reference, and is available over the internet at the World Wide Web site of
the Securities and Exchange Commission at http://www.sec.gov. Such information
may also be obtained, free of charge, by contacting the Company at (800)
320-8040 or (918) 573-5400.
(b) Not applicable.
ITEM 11. ADDITIONAL INFORMATION.
(a) The information set forth in the Offer to Exchange under Section 11
("Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning the Options and our Common Stock") and Section 13 ("Legal Matters;
Regulatory Approval") is incorporated herein by reference.
(b) Not applicable.
ITEM 12. EXHIBITS.
(a)(1) Offer to Exchange, dated May 27, 2003
(a)(2) E-Mail Message to Employees Announcing Exchange Offer
(a)(3) Form of Election Form, Including Statement of Employee Stock Option Holdings
(a)(4) Form of Notice of Withdrawal
(a)(5) Instructions to Participate in Offer
(a)(6) Form of Confirmation of Election and Grant of Replacement Options (1)
(a)(7) Form of Confirmation of Voided Election (1)
(a)(8) Form of Confirmation of Election to Not Participate (1)
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(a)(9) Reminder E-Mail to Employees (1)
(a)(10) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2002 filed with the Securities and
Exchange Commission on March 19, 2003 (Incorporated by
Reference)
(a)(11) The Company's Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 2003 filed with the Securities and
Exchange Commission on May 13, 2003 (Incorporated by
Reference)
(b) Not applicable
(d)(1) Form of Option Agreement between the Company and its Employees (1)
(d)(2) Form of Option Grant Letter between the Company and its Employees (1)
(g) Not applicable
(h) Not applicable
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(1) To be filed by amendment to this Schedule TO.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
THE WILLIAMS COMPANIES, INC.
By: /s/ Marcia M. MacLeod
---------------------------------------
Name: Marcia M. MacLeod
Title: Vice President Rewards and Policy
Date: May 28, 2003
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INDEX TO EXHIBITS
(a)(1) Offer to Exchange, dated May 27, 2003
(a)(2) E-Mail Message to Employees Announcing Exchange Offer
(a)(3) Form of Election Form, Including Statement of Employee Stock Option Holdings
(a)(4) Form of Notice of Withdrawal
(a)(5) Instructions to Participate in Offer
(a)(6) Form of Confirmation of Election and Grant of Replacement Options (1)
(a)(7) Form of Confirmation of Voided Election (1)
(a)(8) Form of Confirmation of Election to Not Participate (1)
(a)(9) Reminder E-Mail to Employees (1)
(a)(10) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2002 filed with the Securities and
Exchange Commission on March 19, 2003 (Incorporated by
Reference)
(a)(11) The Company's Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 2003 filed with the Securities and
Exchange Commission on May 13, 2003 (Incorporated by
Reference)
(b) Not applicable
(d)(1) Form of Option Agreement between the Company and its Employees(1)
(d)(2) Form of Option Grant Letter between the Company and its Employees(1)
(g) Not applicable
(h) Not applicable
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(1) To be filed by amendment to this Schedule TO.
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