Date: 06-14-2006

Case Style: Cali, et al v. Williams Companies, et al.

Case Number: 4:02-cv-00072-SPF-FHM

Judge: Stephen P Friot

Court: United States District Court for the Northern District of Oklahoma, Tulsa County

Plaintiff's Attorney:

Jeffrey C. Zwerling and Robin F. Zwerling of Zwerling Schachter & Zwerling, LLP, New York, New York

Zev B. Zysman of Weiss & Yourman, Los Angeles, California for WCG Plaintiff

Brian Barry, Brian Barry Law Office, Los Angeles, California representing Michael Ackerman, et al.

Eric James Belfi of Murray Frank & Sailer, LLP, New York, New York representing Gary Kosseff, et al.

Laurie Bernice Ashton of Keller Rohrback LLP, Phoenix, Arizona for ERISA plaintiffs.

Michael I. Behn of Behn & Wyetzner Chartered, Chicago, Illinios and R. Robyn Assaf of Kirby McInerney & Squire, Oklahoma City, Oklahoma representing Local 710 Pension Fund

Donald M. Bingham of Riggs, Abney, Neal, Turpen, Orbison & Lewis, Tulsa, Oklahoma representing District Attorney' Retirement System of the State of Louisiana, et al.

Javier Bleichmar of C. Chad Johnson of Bernstein Litowitz Berger & Grossman, New York, New York representing Arkansas Teacher Retirement System

David B. Kahn of David B. Kahn & Associates, Ltd., Northfield, Illinois for Lawrence M. Cohen Ira, et al.

Ashley Kim of Schoengold Sporn Laitmain & Lometti, P.C., New York, New York

Michael D. Braun, Jules Brody, Tzivia Brody, and Aaron Brody of Stull Stull & Brody, New York, New York

Kent A. Bronson, Jennifer K. Hirsh, Dael Cohen and Deborah Clark-Weintraub of Milberg Weiss Bershad & Schulman, LLP, New York, New York and Los Angeles, California

Peter D. Bull of Bull & Lifshitz, LLP, New York, New York

Michael Burrage of Burrage Law Firm, Durant, Oklahoma for Ontario Teachers' Pension Plan Board, et al. (Interested Party)

Charles Robert Burton, IV and Scott Alan Graham of the Seymour Law Firm, Tulsa, Oklahoma for HGK Asset Management, et al. (Movants)

Christopher Collins and Frank J. Janecek, Jr. of Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, San Diego, California of PACE Industry Union-Management Pension Fund

Karnit Daniel of Weiss & Yourman, Los Angeles, California

Reuben Davis and Charles Greenough of Boone Smith Davis Hurst & Dickman, Tulsa, Oklahoma for Douglas E. Miller

Geata Gocyk-Farber of Bernstein Litowitz Berger & Grossman, LLP, New York, New York for Arkansas Teacher Retirement System

Lynda J. Grant of Goodkind Labaton Rudoff & Sucharow, LLP, New York, New York for Elaine Katz, et al.

Susan R. Gross of Bernard M. Gross, P.C., Philadelphia, Pennsylvania for Michael Sheiak, et al.

Karen M. Hanson of Lockridge Grindal Nauen, PLLP, Minneapolis, Minnesota for Westmonte Plaza, Inc., et al.

Robert I. Harwood of Wechsler Harwood Halebian & Feffer, LLP, New York, New York

Marc S. Henzel of Marc S. Henzel Law Office, Bala Cynwyd, Pennsylvania

Theodore M. Hess-Mahan of Shapiro Haber & Urmy, LLP, Boston, Massachusetts for Jeffrey S. Jordan, et al.

James Rouse Hicks of Morrell West Saffa Craige & Hicks, Inc., Tulsa, Oklahoma for Thomas Ingoglia, et al.

Jerold B. Hoffman, Hoffman & Edelson, LLC, Doylestown, Pennsylvania

Fred Taylor Isquith and Michael Jaffe of Wolf Haldenstein Adler Freeman & Herz, New York, New York for Market Street Securities, Inc., et al.

Defendant's Attorney:

Sally J. Berens, Jayesh Sanatkumar Hines-Shah, Alexa L. Green, Lori Ginex and Joseph Peter Busch, III of Gibson Dunn & Crutcher LLP, Palo Alto, California

Scott L. Adkins of Skadden Arps Slate Meagher & Flom, Wilmington, Delaware

Joe Michael Hampton of Ryan Whaley Coldiron and Shandy, PC., Oklahoma City, Oklahoma for Ernst & Young, LLP

Richard Todd Archibad and Bance L. Beagles of Weil Gotshal & Manges LLP, Dallas, Texas representing outside directory defendants.

Burk Bailey, John Barnes Heatly and Warren Franklin Bickford, IV of Fellers Snider Blankenship Bailey & Tippen, Oklahoma City, Oklahoma representing Banc of American Securities LLC

James L. Kincaid, Geraold Lee Jackson, Michael J. Gibbens, Susan E. Hunstman, Charles B. Goodwin, and Jennifer Ann Blankenship of Crowe & Dunlevy, Oklahoma City, Oklahoma and Tulsa, Oklahoma representing Bob F. McCoy, et al.

Dennis J. Block, Jonathan M. Hoff, Isaac Greaney, and Israel Dahan of Cadwalader Wickersham & Taft, New York, New York representing Banc of America Securities, LLC

Sarah J. Gillett and Stephanie Ann Horton of Hall Estill Hardwick Gable Golden & Nelson, Tulsa, Oklahoma for The Williams Companies, et al.

Phillip Gardner Whaley and Timothy James Bomhoff of Ryan Whaley Coldiron and Shandy P.C., Oklahoma City, Oklahoma for Ernst & Young, LLP

Sheila Miller Bradley of Graham & Freeman, PLLC, Tulsa, Oklahoma for Bank of America NA (Intervenor)

Ethan J. Brown, Christopher Harris, and Charles Cox of Latham & Watkins, Los Angeles, California for Ernst & Young, LLP

John Daniel Clayman, Fred Dorwart Lawyers, Tulsa, Oklahoma for Charles M. Lillis, et al.

Alex Anton Gildberg, Williams Companies, Inc., Tulsa, Oklahoma

Tony Michael Graham, Graham & Freeman, PLLC, Tulsa, Oklahoma for Bank of America, N.A. (Intervenor)

Alexander Floyd King, Dollar Thrifty Automotive Group, Inc., Tulsa, Oklahoma for Bob B. McCoy, et al.

Description:

Williams (NYSE:WMB) today announced that it has reached an agreement in principle to settle class-action shareholder litigation filed on behalf of purchasers of Williams securities between July 24, 2000, and July 22, 2002.

Under the terms of the agreement, Williams will pay $290 million to plaintiffs, subject to court approval. The settlement will be funded through a combination of insurance proceeds and cash on hand, and will not have a material effect on the company's liquidity position. Of the total settlement, Williams expects to pay approximately $145 million to $220 million in cash to fund the settlement, while it expects the balance to be funded by its insurers.

Williams plans to record a second-quarter, pre-tax charge in the same dollar range as its expected cash outlay. On an after-tax basis, the charge is estimated to be approximately $98 million to $148 million, or 16 cents to 24 cents per diluted share. The exact amount of the charge within the aforementioned range is subject to final determination and timing of certain insurer coverage allocations. The company considers the charge a non-recurring item.

Williams noted that it chose to settle this litigation as part of the company's efforts to resolve legacy issues and move forward with its plans for profitable growth.

Williams and the plaintiffs plan to file definitive settlement agreements in early August with the U.S. District Court for the Northern District of Oklahoma. The settlement would be funded within 30 days of the court's preliminary approval of the agreement, which could occur as soon as mid-August.

Williams and various other parties to the agreements do not admit to any liability by the company, its directors or officers. In addition, there were no findings of any violation of federal securities laws.

Today's agreement is exclusive of the company's litigation with plaintiffs representing a class of Williams Communications securities purchasers. That suit is pending in U.S. District Court for the Northern District of Oklahoma.

About Williams (NYSE:WMB)

Williams, through its subsidiaries, primarily finds, produces, gathers, processes and transports natural gas. The company also manages a wholesale power business. Williams' operations are concentrated in the Pacific Northwest, Rocky Mountains, Gulf Coast, Southern California and Eastern Seaboard. More information is at www.williams.com.

# # #

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.

Outcome: Settled for $290 million.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None