UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 1, 2016 (June 30, 2016)
The Williams Companies, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 1-4174 | 73-0569878 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| One Williams Center, Tulsa, Oklahoma |
74172 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s Telephone Number, Including Area Code: (918) 573-2000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.02 | Termination of a Material Definitive Agreement. |
Effective on June 30, 2016, Eric W. Mandelblatt and Keith A. Meister resigned from the Board of the Company. As a result of this resignation, the Settlement Agreement (the “Settlement Agreement”) dated February 25, 2014, by and among the Company, Corvex Management LP and Keith Meister and Soroban Master Fund LP, Soroban Capital Partners LLC and Eric W. Mandelblatt, was terminated effective June 30, 2016.
The Settlement Agreement was filed as Exhibit 99.1 to the Company’s Form 8-K filed February 25, 2014 and is incorporated herein by reference.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(a) Effective on June 30, 2016, Ralph Izzo, Eric W. Mandelblatt, Keith A. Meister, Steven W. Nance, and Laura A. Sugg resigned from the Board of Directors (the “Board”) of The Williams Companies, Inc. (the “Company”). Recognizing that it is in the best interests of the Company’s stockholders and the Company to concentrate on the future, the Board has thoroughly evaluated the Company’s leadership structure and determined that Alan Armstrong is the right Chief Executive Officer for the Company as the Company works to continue enhancing stockholder value. Frank T. MacInnis, Mr. Izzo, Mr. Mandelblatt, Mr. Meister, Mr. Nance and Ms. Sugg disagreed with this strategic decision of the Board. Mr. Izzo, Mr. Mandelblatt, Mr. Meister, Mr. Nance and Ms. Sugg decided, in the best interest of stockholders, to resign from the Board. Each of Mr. Mandelblatt and Mr. Meister delivered a letter to the Board regarding their resignations, copies of which are attached hereto as Exhibit 17.1 and Exhibit 17.2 respectively.
Mr. Izzo was a member of the Audit Committee and the Finance Committee. Mr. Mandelblatt was a member of the Finance Committee and the Nominating and Governance Committee. Mr. Meister was a member of the Audit Committee and the Compensation Committee. Mr. Nance was the Chair of the Special Safety Committee and a member of the Compensation Committee. Ms. Sugg was a member of the Compensation Committee and the Special Safety Committee.
(b) Effective on June 30, 2016, Mr. MacInnis also resigned from the Board of the Company. Mr. MacInnis was the independent Chairman of the Board, the Chair of the Nominating and Governance Committee and a member of the Compensation Committee. Mr. MacInnis’ resignation was for personal reasons.
A copy of the press release announcing the above changes to the Board is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| 17.1 | Letter, dated July 1, 2016, from Eric W. Mandelblatt to the Board. | |
| 17.2 | Letter, dated July 1, 2016, from Keith A. Meister to the Board. | |
| 99.1 | Press release of the Company dated July 1, 2016. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE WILLIAMS COMPANIES, INC. | ||
| By: | /s/ Sarah C. Miller | |
| Name: | Sarah C. Miller | |
| Title: | Senior Vice President, General Counsel & Corporate Secretary | |
DATED: July 1, 2016
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 17.1 | Letter, dated July 1, 2016, from Eric W. Mandelblatt to the Board. | |
| 17.2 | Letter, dated July 1, 2016, from Keith A. Meister to the Board. | |
| 99.1 | Press release of the Company dated July 1, 2016. | |
Exhibit 17.1
July 1, 2016
The Williams Companies, Inc.
One Williams Center
Tulsa, Oklahoma 74172
Attn: Board of Directors
| RE: | Resignation from the Board of Directors of |
| The Williams Companies. Inc. (the “Company”) |
Ladies and Gentlemen:
It is with deep regret and sadness that after a long history with the Company I have resigned from the Board of Directors of The Williams Companies, Inc., following the Board’s decision to continue forward with Alan Armstrong as CEO. I am resigning alongside five of my fellow Directors: the Chairman of the Board; the Head of the Safety Committee; the Head of the Strategic Review Committee; the very well respected CEO of a large energy company and key member on the Finance Committee; and one of the largest and longest-standing shareholders of the Company. I joined the Board with the goal and intention of partnering with management and my fellow Board members to create value for all of the Company’s shareholders, and have invested significant time and resources to this endeavor. But it has unfortunately become evident that the CEO of the Company, Alan Armstrong, is incapable of maximizing shareholder value and, instead, is primarily focused on maintaining his role as CEO. Now that the Company is no longer in the midst of its past strategic review process, or bound by a merger agreement, I cannot serve on a Board that continues to empower a CEO with an abysmal operational and financial track record, and who in my opinion lacks the necessary judgment and character to lead the Company forward.
While I regretfully have resigned my seat on the Board of Directors along with five of my fellow Directors, I retain all options going forward to protect shareholders from further value destruction.
| Sincerely, |
| /s/ Eric W. Mandelblatt |
| Eric W. Mandelblatt |
Exhibit 17.2
| The Williams Companies, Inc. | July 1, 2016 | |
| One Williams Center Tulsa, Oklahoma 74172 Attn: Board of Director |
| RE: | Resignation from the Board of Directors of The Williams Companies, Inc. |
Dear Board Members:
This letter confirms my resignation from the Board of Directors of The Williams Companies, Inc. which was effective yesterday.
I have resigned because I can no longer in good conscience serve on a Board where a majority of that Board was unwilling to make a change that I felt was critical to the future direction of the Company—replacing Alan Armstrong as CEO. At our Board meeting yesterday, there was discussion of the substantial business and operational failures that have occurred over the last five years on Alan’s watch as CEO, many of which I, Eric Mandelblatt or other directors have often raised in the past. I did not hear a credible defense of Mr. Armstrong’s track record of business performance. As Williams now charts its future at this crucial juncture, I feel that those failures compelled a change for the good of our shareholders.
Six directors, including the Chairman of the Board, the Chair of the Strategic Review Administrative Committee and large shareholder Eric Mandelblatt, supported a change in the CEO, and when the remaining directors refused to make this change, all six directors resigned at the same time. It is clear that I was not the only director who felt strongly on this issue.
The determination as to the leader of a company is among the most important matters a Board can undertake, and I do not see any basis for concluding that that change was not required. Indeed, to my mind the issue is so clear that I can only conclude that those directors who were unwilling to support this change have acted more out of a personal loyalty to Alan Armstrong, rather than permitting the facts of his performance to take them to the correct answer.
I am simply not prepared to remain on the Board with the possibility that shareholders could think, by my continued participation on the Board, that I support or can have a meaningful influence on Alan and his management of the Company. It is far better in my view to make it clear that I fundamentally disagree with the course of action. Ironically, given the current CEO and Board leadership, I believe I will be more effective from outside the Company than within, and will seek to protect our interests and the interest of other shareholders from outside this diminished Boardroom.
During the period that I am on the outside, it is on your shoulders alone to oversee the development of a credible business plan, communicate transparently with shareholders and hold our CEO accountable for any failure to execute against those plans. I urge you to engage with institutional investors who undoubtedly will seek to engage with you on all of the issues raised in this letter.
I expect that this letter will be filed with the Company’s 8-K reflecting the reasons I resigned from the Williams Board.
| Very Truly Yours, |
| /s/ Keith Meister |
| Keith Meister |
Exhibit 99.1
WILLIAMS CHAIRMAN FRANK T. MACINNIS STEPS DOWN FOR PERSONAL REASONS;
ANNOUNCES ADDITIONAL BOARD RESIGNATIONS
Board Determines that Alan Armstrong is the Right Leader for Williams Going Forward
TULSA, Okla. – July 1, 2016 – The Williams Companies, Inc. (NYSE: WMB) (“Williams”) today announced that Frank T. MacInnis is stepping down as Chairman of the Board of Directors due to personal reasons, effective immediately. Dr. Kathleen Cooper, a current director and Audit Committee member has been appointed Chairman of the Board of Directors.
“Frank’s contributions to Williams over the years have been instrumental to our growth and he has personally been a trusted counselor to me,” said Alan Armstrong, President and Chief Executive Officer. “Frank has indicated that, due to personal reasons, he does not believe that he can dedicate the time and attention he believes necessary to fulfill the role of Chairman as Williams pursues a standalone strategy. On behalf of the entire Williams team, we send him our deepest gratitude for his many years of service.”
Williams Leadership and Strategic Direction
Recognizing that it is in the best interests of the stockholders and the Company to concentrate on the future, the Board of Directors has thoroughly evaluated the Company’s leadership structure and determined that Alan Armstrong is the right Chief Executive Officer for Williams as the Company works to continue enhancing stockholder value.
The Company also today announced that Ralph Izzo, Frank T. MacInnis, Eric W. Mandelblatt, Keith A. Meister, Steven W. Nance and Laura A. Sugg disagreed with this strategic direction of the Williams Board of Directors. Ralph Izzo, Eric W. Mandelblatt, Keith A. Meister, Steven W. Nance and Laura A. Sugg decided, in the best interests of stockholders, to resign from the Williams Board of Directors, effective immediately. Williams will evaluate the appropriate size and composition of the Board going forward in accordance with its standard Nominating and Governance procedures.
The Board of Directors of Williams issued the following statement:
Since Alan was appointed CEO in 2011, Williams has become a best-in-class operator that is extremely well-positioned to meet the rapidly growing demand for natural gas and experience significant fee-based growth. Williams’ focus on fee-based revenue has produced strong cash flow, and looking forward, Williams expects continued growth from its portfolio of large scale demand driven projects and a fully contracted natural gas transmission business coming on in the balance of 2016, 2017 and 2018.
Williams has seen the success of its strategy reflected quarter after quarter. With significant growth projects underway, the Company expects to continue its positive trajectory as natural gas continues to grow market share both at home and abroad.
The Board will continue to take appropriate actions to position the Company for the future and enhance value for Williams stockholders.
Additional details on the Company’s strategic plan will be disclosed in the coming weeks.
Williams (WMB) is a premier provider of large-scale infrastructure connecting North American natural gas and natural gas products to growing demand for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams owns approximately 60 percent of Williams Partners L.P. (WPZ) (“WPZ”), including all of the 2 percent general-partner interest. WPZ is an industry-leading, large-cap master limited partnership with operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins. With major positions in top U.S. supply basins and also in Canada, WPZ owns and operates more than 33,000 miles of pipelines system wide – including the nation’s largest volume and fastest growing pipeline – providing natural gas for clean-power generation, heating and industrial use. WPZ’s operations touch approximately 30 percent of U.S. natural gas.
Portions of this document may constitute “forward-looking statements” as defined by federal law. Although the company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the “safe harbor” protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the company’s annual reports filed with the Securities and Exchange Commission.
Contact:
The Williams Companies, Inc.
Investor Relations:
John Porter, 918-573-0797
or
Brett Krieg, 918-573-4614
or
Media Relations:
Lance Latham, 918-573-9675
or
Joele Frank, Wilkinson Brimmer Katcher
Dan Katcher, Andrew Siegel or Dan Moore, 212-355-4449