exv10w5






Exhibit 10.5




1/5/11




			
	TO:	 	<@Name@>




FROM:Alan S. Armstrong





			
	SUBJECT: 2011 Performance-Based Restricted Stock Unit Award




You have been selected to receive a performance-based restricted stock unit award to be paid if the
Company exceeds the Threshold goal for Total Shareholder Return, as established by the Committee,
over the Performance Period. This award, which is subject to adjustment under the 2011
Performance-Based Restricted Stock Unit Agreement (the “Agreement”), is granted to you in
recognition of your role as a key employee whose responsibilities and performance are critical to
the attainment of long-term goals. This award and similar awards are made on a selective basis and
are, therefore, to be kept confidential. It is granted and subject to the terms and conditions of
The Williams Companies, Inc. 2007 Incentive Plan, as amended and restated from time to time, and
the Agreement.



Subject to all of the terms of the Agreement, you will become entitled to payment of the award if
you are an active employee of the Company on [February 24] of the third year following the year in
which this award is made, and performance measures are certified for the three-year period
beginning January 1 of the year in which this award is made to you. The termination provisions
associated with this award are included in the Agreement.



If you have any questions about this award, you may contact a dedicated Fidelity Stock Plan
Representative at 1-800-544-9354.






 









 








2011 PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT




     THIS 2011 PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”), which contains
the terms and conditions for the Restricted Stock Units (“Restricted Stock Units” or “RSUs”)
referred to in the 2011 Performance-Based Restricted Stock Unit Award Letter delivered in hard copy
or electronically to Participant (“2011 Award Letter”), is by and between THE WILLIAMS COMPANIES,
INC., a Delaware corporation (the “Company”), and the individual identified on the last page hereof
(the “Participant”).


1. Grant of RSUs. Subject to the terms and conditions of The Williams Companies, Inc. 2007
Incentive Plan, as amended and restated from time to time (the “Plan”), this Agreement, and the
2011 Award Letter, the Company hereby grants to the Participant an award (the “Award) of <@Num+C
@> RSUs effective <@GrDt+C@> (the “Effective Date”). The Award, which is subject to
adjustment under the terms of this Agreement, gives the Participant the opportunity to earn the
right to receive the number of shares of the Common Stock of the Company equal to the number of
RSUs shown in the prior sentence if the Target goal, as established by the Committee, is achieved
by the Company over the Performance Period. These shares, together with any other shares that are
payable under this Agreement, are referred to in the Agreement as “Shares.” Until the Participant
both becomes vested in the Shares under the terms of Paragraph 5 and is paid such Shares under the
terms of Paragraph 6, the Participant shall have no rights as a stockholder of the Company with
respect to the Shares.



2. Incorporation of Plan and Acceptance of Documents. The Plan is hereby incorporated
herein by reference and all capitalized terms used herein which are not defined in this Agreement
shall have the meaning set forth in the Plan. The Participant acknowledges that he or she has
received a copy of, or has online access to, the Plan, and hereby automatically accepts the RSUs
subject to all the terms and provisions of the Plan and this Agreement. The Participant hereby
further agrees that he or she has received a copy of, or has online access to, the prospectus and
hereby acknowledges his or her automatic acceptance and receipt of such prospectus electronically.



3. Committee Decisions and Interpretations; Committee Discretion. The Participant hereby
agrees to accept as binding, conclusive and final all actions, decisions and/or interpretations of
the Committee, its delegates, or agents, upon any questions or other matters arising under the Plan
or this Agreement.



4. Performance Measures; Number of Shares Payable to the Participant.





(a) Performance measures established by the Committee shall be based on targeted levels of
both absolute and relative Total Shareholder Return The Committee establishes (i)
“Threshold,” “Target” and “Stretch” goals for Total Shareholder Return (both for absolute
and relative Total Shareholder Return) during the Performance Period and (ii) the designated
numbers of Shares that may be received by a Participant based upon the achievement of each
such goal during the Performance Period, all as more fully described in Subparagraphs 4(b)
through 4(c) below. The number of Shares that may be received by the Participant if the
Target goal is reached is equal to the number of RSUs set forth in Paragraph 1 above.




(b) The RSUs awarded to Participant and subject to this Agreement as reflected in Paragraph
1 above represents Participant’s opportunity to earn the right to payment of an equal number
of Shares (“Target Number of Shares”) upon (i) certification by the Committee that 100% of
the Target goal for Total Shareholder Return for the Performance Period has been met and
(ii) satisfaction of all the other conditions set forth in Paragraph 5 below.




(c) Subject to the Committee’s discretion as set forth in Subparagraph 4(d) below and to
satisfaction of all other conditions set forth in Paragraph 5 below, the actual number of
Shares earned by and payable to Participant upon certification of Total Shareholder Return
results and satisfaction of all other conditions set forth in Paragraph 5 below will be
determined on a continuum ranging from 0% (at the Threshold goal) to 200% (at the Stretch
goal) of the Target Number of Shares depending on the level of Total Shareholder Return
certified by the Committee at the end of the Performance Period.




(d) Notwithstanding (i) any other provision of this Agreement or the Plan or (ii)
certification by the Committee that targets for Total Shareholder Return above the Threshold
goal have been achieved during the Performance Period, the Committee may in its sole and
absolute discretion reduce, but not below zero



 









 






(0), the number of Shares payable to the Participant based on such factors as it deems
appropriate, including but not limited to the Company’s performance. Accordingly, any
reference in this Agreement to Shares that (i) become payable, (ii) may be received by a
Participant or (iii) are earned by a Participant, and any similar reference, shall be
understood to mean the number of Shares that are received, payable or earned after any such
reduction is made.


5. Vesting; Legally Binding Rights.





(a) Notwithstanding any other provision of this Agreement, a Participant shall not be
entitled to any payment of Shares under this Agreement unless and until such Participant
obtains a legally binding right to such Shares and satisfies applicable vesting conditions
for such payment.




(b) Except as otherwise provided in Subparagraphs 5(c) — 5(g) below and subject to the
provisions of Subparagraph 4(d) above, the Participant shall vest in Shares under this
Agreement only if and at the time that both of the following conditions are fully satisfied:




(i) The Participant remains an active employee of the Company or any of its
Affiliates on [February 24] of the third year following the year that contains the
Effective Date (the “Maturity Date”); and




(ii) The Committee certifies that the Company has met Total Shareholder Return
targets above the Threshold goal as defined by the Committee for the three-year
performance period beginning January 1, 2011 (the “Performance Period”).
Certification, if any, by the Committee for the Performance Period shall be made by
the Maturity Date or as soon thereafter as is administratively practicable.




(c) If a Participant dies, becomes Disabled (as defined below) or qualifies for Retirement
(as defined below) prior to the Maturity Date while an active employee of the Company or
any of its Affiliates, at but not prior to the Maturity Date, and only to the extent and at
the time that the Committee certifies that the performance measures for the Performance
Period are satisfied under Subparagraph 5(b)(ii) above, upon such certification, the
Participant shall vest in that number of Shares the Participant might otherwise have
received for the Performance Period in accordance with Paragraph 4 above pro rated to
reflect that portion of the Performance Period prior to such Participant’s ceasing being an
active employee of the Company and its Affiliates. The pro rata number of Shares in which
the Participant may become vested in such case shall equal that number determined by
multiplying (i) the number of Shares the Participant might otherwise have received for the
Performance Period in accordance with Paragraph 4 above times (ii) a fraction, the
numerator of which is the number of full and partial months in the period that begins the
month following the month that contains the Effective Date and ends on (and includes) the
date of the Participant ceases being an active employee of the Company and its Affiliates,
and the denominator of which is the total number of full and partial months in the period
that begins the month following the month that contains the Effective Date and ends on (and
includes) the Maturity Date.




(d) As used in this Agreement, the terms “Disabled,” “qualify for Retirement”, “Separation
from Service” and “Affiliate” shall have the following respective meanings:




(i) A Participant shall be considered Disabled if such Participant (A) is unable to
engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, or (B)
is, by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous period of
not less than twelve (12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan covering
employees of the Participant’s employer. Notwithstanding the forgoing, all
determinations of whether a Participant is Disabled shall be made in accordance with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and
guidance thereunder.



 









 






(ii) A Participant “qualifies for Retirement” only if such Participant experiences a
Separation from Service (as defined in (iii) below) after attaining age fifty-five
(55) and completing at least three (3) years of service with the Company or any of
its Affiliates.




(iii) “Separation from Service” means a Participant’s termination or deemed
termination from employment with the Company and its Affiliates (as defined in (iv)
below). For purposes of determining whether a Separation from Service has occurred,
the employment relationship is treated as continuing intact while the Participant is
on military leave, sick leave or other bona fide leave of absence if the period of
such leave does not exceed six (6) months, or if longer, so long as the Participant
retains a right to reemployment with his or her employer under an applicable statute
or by contract. For this purpose, a leave of absence constitutes a bona fide leave
of absence only if there is a reasonable expectation that the Participant will
return to perform services for his or her employer. If the period of leave exceeds
six (6) months and the Participant does not retain a right to reemployment under an
applicable statute or by contract, the employment relationship will be deemed to
terminate on the first date immediately following such six (6) month period.
Notwithstanding the foregoing, if a leave of absence is due to any medically
determinable physical or mental impairment that can be expected to result in death
or can be expected to last for a continuous period of not less than six (6) months,
and such impairment causes the Participant to be unable to perform the duties of the
Participant’s position of employment or any substantially similar position of
employment, a twenty-nine (29) month period of absence shall be substituted for such
six (6) month period. For purposes of this Agreement, a Separation from Service
occurs at the date as of which the facts and circumstances indicate either that,
after such date: (A) the Participant and the Company reasonably anticipate the
Participant will perform no further services for the Company and its Affiliates
(whether as an employee or an independent contractor or (B) that the level of bona
fide services the Participant will perform for the Company and its Affiliates
(whether as an employee or independent contractor) will permanently decrease to no
more than twenty (20%) of the average level of bona fide services performed over the
immediately preceding thirty-six (36) month period or, if the Participant has been
providing services to the Company and its Affiliates for less than thirty-six (36)
months, the full period over which the Participant has rendered services, whether as
an employee or independent contractor. The determination of whether a Separation
from Service has occurred shall be governed by the provisions of Treasury Regulation
§ 1.409A-1, as amended, taking into account the objective facts and circumstances
with respect to the level of bona fide services performed by the Participant after a
certain date.




(iv) As used in this Agreement, “Affiliate” means all persons with whom the Company
would be considered a single employer under Section 414(b) of the Code, and all
persons with whom such person would be considered a single employer under Section
414(c) of the Code.




(e) If a Participant experiences a Separation from Service prior to the Maturity Date
within two years following a Change in Control, either voluntarily for Good Reason or
involuntarily (other than due to Cause), the Participant shall vest in that number Shares
equal to the number of Shares that might otherwise be received by the Participant upon
achievement of the Target goal.




(f) If the Participant experiences an involuntary Separation from Service prior to the
Maturity Date and the Participant either receives benefits under a severance pay plan or
program maintained by the Company or receives benefits under a separation agreement with the
Company, at but not prior to the Maturity Date and only to the extent the Committee
certifies that the performance measures for the Performance Period are satisfied under
Subparagraph 5(b)(ii) above, the Participant shall, on the date of such certification,
become vested in that number of Shares the Participant might otherwise have received for the
Performance Period in accordance with Paragraph 4 above pro rated to reflect that portion of
the Performance Period prior to the Participant’s ceasing being an active employee of the
Company and its Affiliates. The pro rata number of Shares which may be payable to
Participant on but not prior to the Maturity Date in such case shall equal that number
determined by multiplying (i) the number of Shares the Participant might otherwise have
received for the Performance Period in accordance with Paragraph 4 above times (ii)
a fraction, the numerator of which is the number of full and partial months in the period
that begins the month following the month that includes the Effective Date and ends on (and
includes) the



 









 







date the Participant ceases being an active employee of the Company and its Affiliates, and
the denominator of which is the number of full and partial months in the period that begins
the month following the month that contains the Effective Date and ends on (and includes)
the Maturity Date.




(g) If (i) the Participant experiences an involuntary Separation from Service prior to the
Maturity Date due to a sale of a business or the outsourcing of any portion of a business,
and (ii) the Company or any of its Affiliates fails to make an offer of comparable
employment, as defined a severance plan or program maintained by the Company, to the
Participant, then at the time and to the extent the Committee certifies that the performance
measures for the Performance Period are satisfied under Subparagraph 5(b)(ii) above, upon
such certification, the Participant shall become vested in that number of Shares the
Participant might otherwise have received for the Performance Period in accordance with
Paragraph 4 above pro rated to reflect that portion of the Performance Period prior to the
Participant’s ceasing being an active employee of the Company and its Affiliates. The pro
rata number of Shares in which the Participant may become vested on, but not prior to, the
Maturity Date in such case shall equal that number of Shares determined by multiplying (i)
the number of Shares the Participant might otherwise have received for the Performance
Period in accordance with Paragraph 4 above times (ii) a fraction, the numerator of
which is the number of full and partial months in the period that begins the month following
the month that contains the Effective Date and ends on (and includes) the date the
Participant ceases being an active employee of the Company and its Affiliates, and the
denominator of which is the total number of full and partial months in the period that
begins the month following the month that contains the Effective Date and ends on (and
includes) the Maturity Date.




For purposes of this Subparagraph 5(g), a Termination of Affiliation shall constitute an
involuntary Separation from Service.


6. Payment of Shares.





	 	(a)	 	(i) The payment date for all Shares in which a Participant becomes vested
pursuant to Subparagraph 5(e) above shall be the thirtieth (30th) day after
such Participant’s Separation from Service, provided that if the Participant was a
“key employee” within the meaning of Section 409A(a)(B)(i) of the Code immediately
prior to his or her Separation from Service, payment shall not be made sooner than six
(6) months following the date of such Separation from Service.






(ii) For purposes of this Subparagraph 6(a), “key employee” means an employee
designated on an annual basis by the Company as of December 31 (the “Key Employee
Designation Date”) as an employee meeting the requirements of Section 416(i) of Code
utilizing the definition of compensation under Treasury Regulation §
1.415(c)-2(d)(2). A Participant designated as a “key employee” shall be a “key
employee” for the entire twelve (12) month period beginning on April 1 following the
Key Employee Designation Date.




(b) The payment date for all Shares in which the Participant becomes vested pursuant to
Paragraph 5 above, other than Subparagraph 5(e) (as to which the payment date is determined
in accordance with Subparagraph 6(a) above), shall be the calendar year containing the
Maturity Date.




(c) Upon conversion of RSUs into Shares under this Agreement, such RSUs shall be
cancelled. Shares that become payable under this Agreement will be paid by the Company by
the delivery to the Participant, or the Participant’s beneficiary or legal representative,
one or more certificates (or other indicia of ownership) representing Shares of Williams
Common Stock equal in number to the number of Shares otherwise payable under this Agreement
less the number of Shares having a Fair Market Value, as of the date the withholding tax
obligation arises, equal to the minimum statutory withholding requirements. Notwithstanding
the foregoing, to the extent permitted by Section 409A of the Code and the guidance
thereunder, if federal employment taxes become due upon the Participant’s becoming entitled
to payment of Shares, the number of Shares necessary to cover minimum statutory withholding
requirements may, in the Company’s discretion, be used to satisfy such requirements upon
such entitlement.



 









 




7. Other Provisions.





(a) The Participant understands and agrees that payments under this Agreement shall not be
used for, or in the determination of, any other payment or benefit under any continuing
agreement, plan, policy, practice or arrangement providing for the making of any payment or
the provision of any benefits to or for the Participant or the Participant’s beneficiaries
or representatives, including, without limitation, any employment agreement, any change of
control severance protection plan or any employee benefit plan as defined in Section 3(3) of
ERISA, including, but not limited to qualified and non-qualified retirement plans.




(b) The Participant agrees and understands that, subject to the limit expressed in clause
(iii) of the following sentence, stock certificates (or other indicia of ownership) issued
may be held as collateral for monies he/she owes to Company or any of its Affiliates,
including but not limited to personal loan(s), Company credit card debt, relocation
repayment obligations or benefits from any plan that provides for pre-paid educational
assistance. In addition, the Company may accelerate the time or schedule of a payment of
vested Shares, and/or deduct from any payment of Shares to the Participant under this
Agreement, or to his or her beneficiaries in the case of the Participant’s death, that
number of Shares having a Fair Market Value at the date of such deduction to the amount of
such debt as satisfaction of any such debt, provided that (i) such debt is incurred in the
ordinary course of the employment relationship between the Company or any of its Affiliates
and the Participant, (ii) the aggregate amount of any such debt-related collateral held or
deduction made in any taxable year of the Company with respect to the Participant does not
exceed $5,000, and (iii) the deduction of Shares is made at the same time and in the same
amount as the debt otherwise would have been due and collected from the Participant.




(c) Except as provided in Subparagraphs 5(c) through 5(g) above, in the event that the
Participant’s employment with the Company or any of its Affiliates terminates prior to the
Maturity Date, RSUs subject to this Agreement and any right to Shares issuable hereunder
shall be forfeited.




(d) The Participant acknowledges that this Award and similar awards are made on a selective
basis and are, therefore, to be kept confidential.




(e) RSUs, Shares, and Participant’s interest in RSUs and Shares, may not be sold, assigned,
transferred, pledged or otherwise disposed of or encumbered at any time prior to both (i)
the Participant’s becoming vested in Shares and (ii) payment of Shares under this
Agreement.




(f) If the Participant at any time forfeits any or all of the RSUs pursuant to this
Agreement, the Participant agrees that all of the Participant’s rights to and interest in
such RSUs and in Shares issuable thereunder shall terminate upon forfeiture without payment
of consideration.




(g) The Committee shall determine whether an event has occurred resulting in the forfeiture
of the RSUs and any Shares issuable thereunder in accordance with this Agreement, and all
determinations of the Committee shall be final and conclusive.




(h) With respect to the right to receive payment of Shares under this Agreement, nothing
contained herein shall give the Participant any rights that are greater than those of a
general creditor of the Company.




(i) The obligations of the Company under this Agreement are unfunded and unsecured. Each
Participant shall have the status of a general creditor of the Company with respect to
amounts due, if any, under this Agreement.




(j) The parties to this Agreement intend that this Agreement meet the requirements of
Section 409A of the Code and recognize that it may be necessary to modify this Agreement
and/or the Plan to reflect guidance under Section 409A of the Code issued by the Internal
Revenue Service. Participant agrees that the Committee shall have sole discretion in
determining (i) whether any such modification is desirable or appropriate and (ii) the terms
of any such modification.




(k) The Participant hereby automatically becomes a party to this Agreement whether or not he
or she



 









 







accepts the Award electronically or in writing in accordance with procedures of the
Committee, its delegates or agents.




(l) Nothing in this Agreement or the Plan shall interfere with or limit in any way the right
of the Company or an Affiliate to terminate the Participant’s employment or service at any
time, nor confer upon the Participant the right to continue in the employ of the Company
and/or Affiliate.




(m) The Participant hereby acknowledges that nothing in this Agreement shall be construed as
requiring the Committee to allow a Domestic Relations Order with respect to this Award.


8. Notices. All notices to the Company required hereunder shall be in writing and delivered
by hand or by mail, addressed to The Williams Companies, Inc., One Williams Center, Tulsa, Oklahoma
74172, Attention: Stock Administration Department. Notices shall become effective upon their
receipt by the Company if delivered in the foregoing manner. To direct the sale of any Shares
issued under this Agreement, contact Fidelity at http://netbenefits.fidelity.com or by telephone at
800-544-9354.



9. Tax Consultation. You understand you will incur tax consequences as a result of
acquisition or disposition of the Shares. You agree to consult with any tax consultants you think
advisable in connection with the acquisition of the Shares and acknowledge that you are not
relying, and will not rely, on the Company for any tax advice.




	 	 	 	 	 
	 	THE WILLIAMS COMPANIES, INC.

 	 
	 	By:  	/s/ Alan S. Armstrong
 	 
	 	 	Alan S. Armstrong 	 
	 	 	President and CEO 	 
	 



Participant: <@Name

SSN: <@SSN @>