8-KShareholder MattersExhibits & Filings

WILLIAMS COMPANIES, INC. 8-K Report, Rights Modification (Oct 15, 2007)

Filed October 15, 2007For Securities:WMB

Summary

The Williams Companies, Inc. (WMB) filed an 8-K on October 15, 2007, detailing an amendment to its stockholder rights agreement, specifically concerning the definition of an 'Acquiring Person.' This amendment, dated October 12, 2007, modifies the conditions under which a shareholder exceeding a certain ownership threshold may avoid being classified as an 'Acquiring Person' and triggering the rights plan. The key change allows individuals who acquire beneficial ownership of less than 20% of outstanding common stock, and who report this ownership on Schedule 13G or 13D without intent to control the company, to not be considered an 'Acquiring Person' if they certify inadvertent acquisition above 14.9% and divest excess shares within a specified timeframe upon request from the Company. This provides a mechanism for unintended large shareholders to rectify their position without activating the full consequences of the rights plan.

Key Highlights

  • 1Williams Companies amended its Amended and Restated Rights Agreement on October 12, 2007.
  • 2The amendment specifically modifies the definition of an 'Acquiring Person' within the Rights Agreement.
  • 3Shareholders who beneficially own less than 20% of common stock and report on Schedule 13G or 13D without intent to control may be excluded from 'Acquiring Person' status.
  • 4The amendment includes provisions for shareholders to certify inadvertent acquisition above 14.9%.
  • 5Such shareholders are required to divest excess shares within 10 business days of a company request to avoid being deemed an 'Acquiring Person'.
  • 6Failure to certify or divest within the specified timeframe will result in the person being immediately classified as an 'Acquiring Person'.
  • 7The filing includes Exhibit 4.1, the text of Amendment No. 2 to the Rights Agreement.

Frequently Asked Questions

The primary purpose of the amendment is to refine the definition of an 'Acquiring Person' under the company's stockholder rights plan. It provides a pathway for certain shareholders who inadvertently acquire a significant stake in the company, but do not intend to control it, to avoid triggering the rights plan by certifying their inadvertent ownership and divesting excess shares.

The amendment discusses two key thresholds: one is beneficial ownership of less than 20% of the shares of Common Stock outstanding, and the other is acquiring beneficial ownership of shares in excess of 14.9% inadvertently. If a shareholder exceeds 14.9% and does not properly certify and divest as per the amendment's conditions, they can become an 'Acquiring Person'.

If a shareholder acquires beneficial ownership of shares of Common Stock in excess of 14.9% inadvertently, and reports this on a Schedule 13G or 13D without intent to control the company, they must, within 10 business days of being requested by the Company, certify the inadvertent acquisition. Additionally, they must, within 10 business days of being requested by the Board (or a shorter period determined by the Board), divest a sufficient number of shares to no longer be deemed an 'Acquiring Person'.

If the shareholder fails to provide the required certification or divest shares within the specified timeframes after being requested by the Company or the Board, they will immediately become an 'Acquiring Person' for the purposes of the Rights Agreement, which would likely trigger the anti-takeover provisions of the plan.