Document:

exv10w10

Exhibit 10.10

 

 

FORM OF EMPLOYEE MATTERS AGREEMENT

by and between

THE WILLIAMS COMPANIES, INC.

and

WPX ENERGY, INC.

Dated as of           

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Table of Definitions
	 	 	1	 
	Section 1.2 Certain Defined Terms
	 	 	2	 
	Section 1.3 Other Capitalized Terms
	 	 	5	 
	 
	 	 	 	 
	ARTICLE II GENERAL PRINCIPLES; EMPLOYEE TRANSFERS
	 	 	5	 
	 
	 	 	 	 
	Section 2.1 Assumption of WPX Employee Liabilities
	 	 	              5	 
	Section 2.2 Allocation of Liabilities With Respect to Benefit
Plans, Employment Agreements and Equity Compensation Awards
	 	 	5	 
	Section 2.3 WPX Benefit Plans and WPX Employment Agreements
	 	 	6	 
	Section 2.4 Plan-Related Litigation
	 	 	7	 
	Section 2.5 Paid Time Off
	 	 	7	 
	Section 2.6 FMLA
	 	 	7	 
	Section 2.7 Employee Transfers
	 	 	7	 
	Section 2.8 Annual Bonuses
	 	 	8	 
	 
	 	 	 	 
	ARTICLE III SERVICE CREDIT
	 	 	8	 
	 
	 	 	 	 
	Section 3.1 Service Credit for Employee Transfers
	 	 	8	 
	Section 3.2 WMB Benefit Plans
	 	 	8	 
	Section 3.3 WPX Benefit Plans
	 	 	8	 
	 
	 	 	 	 
	ARTICLE IV CERTAIN WELFARE BENEFIT PLAN MATTERS
	 	 	9	 
	 
	 	 	 	 
	Section 4.1 WPX Welfare Plans
	 	 	9	 
	Section 4.2 Continuation of Elections
	 	 	9	 
	Section 4.3 Pre-Existing Conditions
	 	 	9	 
	Section 4.4 Long-Term Disability
	 	 	9	 
	Section 4.5 Short-Term Disability
	 	 	10	 
	Section 4.6 Workers’ Compensation
	 	 	10	 
	Section 4.7 Other Welfare Benefits
	 	 	10	 
	 
	 	 	 	 
	ARTICLE V DEFINED BENEFIT PLANS
	 	 	10	 
	 
	 	 	 	 
	Section 5.1 WMB DB Plans
	 	 	10	 
	Section 5.2 Vesting of Benefits
	 	 	11	 
	Section 5.3 Section 409A
	 	 	11	 

i

 

TABLE OF CONTENTS

(Continued)

	 	 	 	 	 
	 	 	Page	 

	ARTICLE VI TAX-QUALIFIED DEFINED CONTRIBUTION PLANS
	 	 	11	 
	 
	 	 	 	 
	Section 6.1 WMB DC Plan
	 	 	11	 
	Section 6.2 Vesting of Benefits
	 	 	11	 
	Section 6.3 WPX DC Plan
	 	 	11	 
	Section 6.4 Contributions Due
	 	 	12	 
	 
	 	 	 	 
	ARTICLE VII EQUITY COMPENSATION
	 	 	12	 
	 
	 	 	 	 
	Section 7.1 General Treatment of Outstanding WMB Equity
Compensation Awards
	 	 	12	 
	Section 7.2 Tax Withholding and Reporting
	 	 	14	 
	Section 7.3 Employee Stock Purchase Plan
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VIII BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD-PARTY CLAIMS
	 	 	14	 
	 
	 	 	 	 
	Section 8.1 General Principles
	 	 	14	 
	Section 8.2 Benefit Plan Third-Party Claims
	 	 	14	 
	 
	 	 	 	 
	ARTICLE IX COOPERATION
	 	 	15	 
	 
	 	 	 	 
	Section 9.1 Cooperation
	 	 	15	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	15	 
	 
	 	 	 	 
	Section 10.1 Further Assurances
	 	 	15	 
	Section 10.2 Employment Tax Reporting Responsibility
	 	 	15	 
	Section 10.3 Data Privacy
	 	 	15	 
	Section 10.4 Third Party Beneficiaries
	 	 	16	 
	Section 10.5 Effect if Distribution Does Not Occur
	 	 	16	 
	Section 10.6 Incorporation of Separation Agreement Provisions
	 	 	16	 
	Section 10.7 No Representation or Warranty
	 	 	16	 

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EMPLOYEE MATTERS AGREEMENT

     EMPLOYEE MATTERS AGREEMENT, dated as of            (the “Employee Matters
Agreement”), by and between The Williams Companies, Inc., a Delaware corporation
(“WMB”), and WPX Energy, Inc., a Delaware corporation (“WPX”), which Employee
Matters Agreement shall become effective at the same time as the Separation Agreement (as defined
below).

RECITALS

     A. The parties to this Employee Matters Agreement have entered into the Separation and
Distribution Agreement (the “Separation Agreement”), dated as of the date hereof, pursuant
to which WMB intends to separate into two publicly traded companies: (i) WMB, which will continue
to own and conduct, directly and indirectly, the WMB Business, and (ii) WPX, which will own and
conduct, directly and indirectly, the WPX Business.

     B. The parties wish to set forth their agreements as to certain matters regarding employment,
compensation and employee benefits.

AGREEMENT

     In consideration of the foregoing and the mutual covenants and agreements herein contained,
and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Table of Definitions. The following terms have the meanings set forth on the pages
referenced below:

	 	 	 	 	 	 	 	 	 	 	 
	Definition	 	Page	 	 	Definition	 	Page	 
	Applicable Transfer Date
	 	 	8	 	 	Welfare Plan
	 	 	2	 
	Benefit Plan
	 	 	2	 	 	WMB
	 	 	1	 
	Benefits Commencement Date
	 	 	2	 	 	WMB Benefit Plan
	 	 	3	 
	Converted WPX Equity Compensation
	 	 		 	 	WMB DB Plans
	 	 	3	 
	Award
			12			WMB DC Plan
	 	 	3	 
	Delayed Transfer Employee
	 	 	7	 	 	WMB Employee
	 	 	3	 
	Employee Matters Agreement
	 	 	1	 	 	WMB Employee Liabilities
	 	 	3	 
	Employment Agreement
	 	 	2	 	 	WMB Employment Agreement
	 	 	3	 
	Equity Compensation Awards
	 	 	2	 	 	WMB Equity Compensation Award
	 	 	12	 
	ERISA
	 	 	2	 	 	WMB Group
	 	 	4	 
	Fiscal 2011 Employee Bonuses
	 	 	8	 	 	WMB Option
	 	 	12	 
	Former Employee
	 	 	2	 	 	WMB RSUs
	 	 	12	 
	Plan Payee
	 	 	2	 	 	WMB Welfare Plan
	 	 	4	 
	Pre-2006 Options
	 	 	13	 	 	Workers’ Compensation Event
	 	 	4	 
	Separation Agreement
	 	 	1	 	 	WPX
	 	 	1	 

 

 

Table of Definitions (cont.)

	 	 	 	 	 	 	 	 	 	 	 
	Definition	 	Page	 	 	Definition	 	Page	 
	WPX Benefit Plans
	 	 	4	 	 	WPX Employment Agreement
	 	 	4	 
	WPX DC Plan
	 	 	12	 	 	WPX Exchange Ratio
	 	 	3, 5	 
	WPX Employee
	 	 	4	 	 	WPX Group
	 	 	5	 
	WPX Employee Liabilities
	 	 	4	 	 	WPX Welfare Plan
	 	 	5	 

     Section 1.2 Certain Defined Terms. For the purposes of this Employee Matters
Agreement:

          “Benefit Plan” means, with respect to an entity, each plan, program, policy,
agreement, arrangement or understanding that is a deferred compensation, executive compensation,
incentive bonus or other bonus, pension, profit sharing, savings, retirement, severance pay, salary
continuation, life, death benefit, health, hospitalization, paid time off, disability or accident
insurance or other employee benefit plan, program, agreement or arrangement, including any
“employee benefit plan” (as defined in Section 3(3) of ERISA) sponsored, maintained or contributed
to by such entity or to which such entity is a party or under which such entity has any obligation;
provided that no WMB Equity Compensation Award, nor any plan under which any such WMB Equity
Compensation Award is granted, shall constitute a “Benefit Plan” under this Employee Matters
Agreement. In addition, no Employment Agreement shall constitute a Benefit Plan for purposes
hereof.

          “Benefits Commencement Date” means January 1, 2012, or such later date prior to the
Distribution Date as the parties may agree on which WPX Employees shall commence participation in
the WPX Benefit Plans.

          “Employment Agreement” means any individual employment, retention, relocation, change
in control, incentive bonus, signing bonus or other individual compensatory agreement between any
current or former employee of WMB or a member of the WMB Group or the WPX Group, but excluding any
Equity Compensation Award.

          “Equity Compensation Awards” means, collectively, the WMB Equity Compensation Award
and the Converted WPX Equity Compensation Awards.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

          “Former Employee” means each former employee of WMB, any of its Affiliates and the WMB
Group, but does not include any WMB Employees or WPX Employees.

          “Plan Payee” means, as to an individual who participates in a Benefit Plan, such
individual’s dependents, beneficiaries, alternate payees and alternate recipients, as applicable
under such Benefit Plan.

2

 

          “Welfare Plan” means each Benefit Plan that provides life insurance, health care,
dental care, vision care, employee assistance programs (EAP), accidental death and dismemberment
insurance, disability, severance, or other group welfare or fringe benefits and is an “employee
welfare benefit plan” as described in Section 3(1) of ERISA, whether or not subject to ERISA.

          “WMB Benefit Plan” means any Benefit Plan sponsored or maintained by any member of the
WMB Group or WMB. For the avoidance of doubt, no member of the WMB Group shall be deemed to
sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to
administer such Benefit Plan or provide to WPX any reimbursement in respect of such Benefit Plan.
The WMB Benefit Plans shall be those Benefit Plans sponsored solely by one or more members of the
WMB Group following the Benefits Commencement Date.

          “WMB DB Plans” means Williams Pension Plan, Williams Inactive Employees Pension Plan,
and The Williams Retirement Restoration Plan. The WMB DB Plans shall be the responsibility of one
or more members of the WMB Group following the Benefits Commencement Date.

          “WMB DC Plan” means The Williams Investment Plus Plan. The WMB DC Plan shall be the
responsibility of one or more members of the WMB Group following the Benefits Commencement Date.

          “WMB Employee” means each individual who is employed by a member of the WMB Group
(including, for the avoidance of doubt, any individual who is on a leave of absence, whether paid
or unpaid, from which such employee is entitled to return to active employment with a member of the
WMB Group (in accordance with WMB’s applicable personnel policies)), who is not a WPX Employee.

          “WMB Employee Liabilities” means all potential or actual employment and employee
benefits-related or other Liabilities, whether arising before, on or after the Benefits
Commencement Date, with respect to: (a) WMB Employees, any other persons employed by the WMB Group
and Former Employees (and their respective Plan Payees); (b) any other individuals asserting rights
or obligations stemming from their services to or in connection with WMB’s business (excluding the
WPX Business); (c) WMB Employment Agreements; and (d) the WMB Benefit Plans (including providing
COBRA continuation coverage and long-term disability benefits). WMB Employee Liabilities shall
also include any deferred vested benefits of or other Liabilities with respect to WPX Employees
(and their Plan Payees) under the WMB DB Plans and the WMB DC Plan, and any obligations to issue
WMB common stock under Equity Compensation Awards as provided in Article VII below, but shall exclude the WPX
Employee Liabilities.

          “WMB Employment Agreement” means any Employment Agreement to which any member of the
WMB Group or WMB is a party. The WMB Employment Agreements shall be the responsibility of one or
more members of the WMB Group following the Benefits Commencement Date.

3

 

“WMB Exchange Ratio” means a ratio equal to the last per share trading price of WMB
Common Stock on the Distribution Date (or, if the Distribution Date is not a trading day, the
immediately preceding trading day) based on “regular way” trading divided by an amount equal to the
last per share trading price of WMB Common Stock on the Distribution Date (or, if the Distribution
Date is not a trading day, the immediately preceding trading day) based on “regular way” trading
reduced by the product of the last per share trading price of WPX Common Stock on the Distribution
Date (or, if the Distribution Date is not a trading day, the immediately preceding trading day)
based on “when-issued” trading multiplied by the Distribution Ratio.

          “WMB Group” means WMB and each direct or indirect Subsidiary of WMB, other than
Persons in the WPX Group.

          “WMB Welfare Plan” means each WMB Benefit Plan that is a Welfare Plan.

          “Workers’ Compensation Event” means the event, injury, illness or condition giving
rise to a workers’ compensation claim.

          “WPX Benefit Plans” means any Benefit Plan sponsored or maintained by any member of
the WPX Group or WPX.

          “WPX Employee” means each individual who, as of the earlier of the Distribution or the
Benefits Commencement Date, is employed by a member of the WPX Group (including, for the avoidance
of doubt, (i) any Delayed Transfer Employee, (ii) any individual who is on a leave of absence,
whether paid or unpaid, from which such employee is entitled to return to active employment with a
member of the WPX Group (in accordance with applicable personnel policies) and (iii) any individual
who, at the time of the Distribution (or, if earlier, on the Benefits Commencement Date), is
receiving short-term disability benefits under a WMB Benefit Plan and who, if actively-employed at
the time of the Distribution (or, if earlier, on the Benefits Commencement Date), would have been
or become a WPX Employee on that date).

          “WPX Employee Liabilities” means all potential or actual employment and employee
benefits-related or other Liabilities, whether arising before, on or after the Benefits
Commencement Date, with respect to: (a) WPX Employees and any other persons employed by the WPX Group (and their respective Plan Payees);
(b) any other individuals asserting rights or obligations stemming from their services to or in
connection with the WPX Business; (c) WPX Employment Agreements; or (d) the WPX Benefit Plans, but
excluding, in all cases, any such Liabilities (including, without limitation, for any deferred
vested benefits) arising under any WMB Benefit Plan, including the WMB DB Plans or the WMB DC Plan.
WPX Employee Liabilities shall also include any obligations to issue WPX common stock under Equity
Compensation Awards as provided in Article VII below and any obligations specifically assumed by
WPX in Article IV below, but shall exclude the WMB Employee Liabilities.

          “WPX Employment Agreement” means any Employment Agreement to which any member of the
WPX Group is a party and to which no member of the WMB Group is a party. WPX Employment Agreements
shall also include cash retention

4

 

agreements between any WPX Employee and any member of the WMB
Group, but shall not include any change in control agreements to which any member of the WMB Group
is a party or any other WMB Employment Agreements. The WPX Employment Agreements shall be the sole
responsibility of one or more members of the WPX Group following the Benefits Commencement Date.

          “WPX Exchange Ratio” means a ratio equal to the last per share trading price of WMB
Common Stock on the Distribution Date (or, if the Distribution Date is not a trading day, the
immediately preceding trading day) based on “regular way” trading divided by the last per share
trading price of WPX Common Stock on the Distribution Date (or, if the Distribution Date is not a
trading day, the immediately preceding trading day) based on “when-issued” trading.

          “WPX Group” means WPX and each direct or indirect Subsidiary of WPX. For the purposes
of this Employee Matters Agreement, WMB shall not be deemed to be a member of the WPX Group.

          “WPX Welfare Plan” means each WPX Benefit Plan that is a Welfare Plan.

          Section 1.3 Other Capitalized Terms. Capitalized terms not defined in this Employee Matters
Agreement shall have the meanings ascribed to them in the Separation Agreement.

ARTICLE II

GENERAL PRINCIPLES; EMPLOYEE TRANSFERS

     Section 2.1 Assumption of WPX Employee Liabilities. Effective as of the Benefits Commencement
Date, except as otherwise specifically provided in this Employee Matters Agreement, (a) the WPX
Group shall be solely responsible for all WPX Employee Liabilities and the WMB Group shall not
retain any WPX Employee Liabilities and (b) the WMB Group shall be solely responsible for all WMB Employee Liabilities and the WPX Group shall
not retain any WMB Employee Liabilities.

     Section 2.2 Allocation of Liabilities With Respect to Benefit Plans, Employment Agreements and Equity
Compensation Awards. Except as otherwise specifically provided in this Employee Matters
Agreement, effective immediately prior to the Benefits Commencement Date, each WPX Employee (and
each such individual’s Plan Payees) shall cease active participation in all WMB Benefit Plans,
other than the WMB DB Plans, the WMB DC Plan and, as of such time, WPX shall or shall cause another
member of the WPX Group to have in effect such WPX Benefit Plans as are necessary to comply with
its obligations pursuant to this Employee Matters Agreement. Effective immediately prior to the
Benefits Commencement Date, each WPX Employee who participates in any of the WMB DB Plans and/or
the WMB DC Plan shall cease active participation in each such plan and, after the Distribution
Date, shall be treated as a participant whose employment with the WMB Group has terminated
(effective as of the Distribution) for all purposes thereunder to the extent consistent with
applicable Law (including Code Section 409A).

5

 

          (a) Effective as of the Benefits Commencement Date, except as otherwise specifically provided
in this Employee Matters Agreement, WMB shall, or shall cause one or more members of the WMB Group
to, retain, pay, perform, fulfill and discharge in due course all Liabilities arising out of or
relating to all WMB Employment Agreements and all other WMB Employee Liabilities.

          (b) Effective as of the Benefits Commencement Date, except as otherwise specifically provided
in this Employee Matters Agreement, WPX shall, or shall cause one or more members of the WPX Group
to, retain, pay, perform, fulfill and discharge in due course (i) all Liabilities arising out of or
relating to all WPX Benefit Plans, (ii) all Liabilities arising out of or relating to all WPX
Employment Agreements, (iii) all Liabilities (other than the WMB Employee Liabilities) with respect
to the employment or termination of employment of all WPX Employees and their Plan Payees to the
extent arising in connection with or as a result of employment with or the performance of services
for any member of the WPX Group, and (iv) all other WPX Employee Liabilities.

          (c) Effective as of the Distribution, except as otherwise specifically provided in this
Employee Matters Agreement, WPX shall, or shall cause one or more members of the WPX Group to,
retain, pay, perform, fulfill and discharge in due course all Liabilities arising out of or
relating to the Converted WPX Equity Compensation Awards (including, without limitation, any and
all Liabilities with respect to any equity award of WMB that, through assumption and conversion,
becomes a Converted WPX Equity Compensation Award, as well as any and all Liabilities with respect
to the assumption and conversion of such an award).

          (d) All Liabilities arising out of any Equity Compensation Awards shall be allocated and
handled in accordance with the provisions of Article VII below. For the avoidance of doubt, from
and after the Distribution, in no event will WPX be required to issue, grant or award any
compensation relating to WPX Common Stock to any employee who is a member of the WMB Group other
than pursuant to any Pre-2006 Options as provided for in Section 7.1, and, subject to the treatment
of the WMB Equity Compensation Awards that are outstanding as of the Distribution and held by any
WPX Employee as provided in Section 7.1, in no event will WMB be required to issue, grant or award
any compensation relating to WMB Common Stock to any employee who is a member of the WPX Group
other than pursuant to any Pre-2006 Options as provided for in Section 7.1.

          Section 2.3 WPX Benefit Plans and WPX Employment Agreements. Effective as of the Benefits
Commencement Date, WPX or another member of the WPX Group shall, in a manner not inconsistent with
this Employee Matters Agreement, assume, adopt, continue or, to the extent necessary, assume
sponsorship of each WPX Benefit Plan and WPX Employment Agreement, and the WMB Group shall use
reasonable efforts to transfer or cause to be transferred to WPX all plan documents, trust
agreements, insurance policies, administrative agreements, and other agreements and instruments
reasonably required for the maintenance and administration of the WPX Benefit Plans and the WPX
Employment Agreements.

6

 

     Effective on the Benefits Commencement Date, the WPX Group shall be exclusively
responsible for administering each WPX Benefit Plan and each WPX Employment Agreement in accordance
with its terms and for all obligations and liabilities with respect to the WPX Benefit Plans and
WPX Employment Agreements and all benefits or rights owed to participants in the WPX Benefit Plans
and individuals who are parties to the WPX Employment Agreements, whether arising before, on or
after the Distribution Date. WPX shall not assume sponsorship, maintenance or administration of
any Benefit Plan or Employment Agreement that is not a WPX Benefit Plan or a WPX Employment
Agreement or receive any assets or assume any liabilities in connection with any such Benefit Plan
or Employment Agreement. For the avoidance of doubt, WPX shall not assume sponsorship,
maintenance, administration of or any Liability under any WMB DB Plan or the WMB DC Plan.

     Section 2.4 Plan-Related Litigation. Notwithstanding anything herein to the contrary, the
management of the defense of all litigation related to the WMB Benefit Plans, the WMB Employment
Agreements, the WPX Benefit Plans and the WPX Employment Agreements shall be governed by the
Separation Agreement, and this Employee Matters Agreement shall govern the allocation of
Liabilities related to any such litigation.

     Section 2.5 Paid Time Off. WPX shall assume responsibility for accrued paid time off attributable
to WPX Employees upon the earlier of the Distribution or the Benefits Commencement Date (or, with
respect to Delayed Transfer Employees, upon the Applicable Transfer Date).

     Section 2.6 FMLA. Effective as of the earlier of the Benefits Commencement Date (or, with respect
to Delayed Transfer Employees, the Applicable Transfer Date), WPX shall assume responsibility for
and make available to the WPX Employees the existing eligibility and rights to leave under the
Family and Medical Leave Act of 1993 that such WPX Employees were entitled to from WMB immediately
prior to the Benefits Commencement Date (or, with respect to Delayed Transfer Employees, the
Applicable Transfer Date, but without giving effect to any leave taken between the Benefits
Commencement Date and the Applicable Transfer Date).

     Section 2.7 Employee Transfers.

          (a) Upon mutual agreement of WPX and WMB any employee whose employment transfers after the
earlier of the Distribution or the Benefits Commencement Date, but on or before the first
anniversary of the Distribution, from the WMB Group to the WPX Group and who was continuously
employed by a member of the WMB Group from the Benefits Commencement Date through the date such
employee commences active employment with a member of the WPX Group (as applicable) shall be a
“Delayed Transfer Employee.” Except as otherwise specifically provided in this Employee
Matters Agreement, such Delayed Transfer Employees transferring from the WMB Group to the WPX Group
shall be treated in the same manner as the individuals who were WPX Employees on the Benefits
Commencement Date, to the extent practicable in compliance with applicable Law and the
Benefit Plans and without duplicating benefits for the same period of service. For purposes
of this Employee Matters Agreement, the date on which a

7

 

Delayed Transfer Employee actually
commences employment with the WPX Group (as applicable) is referred to as such individual’s
“Applicable Transfer Date”. Notwithstanding anything herein to the contrary, the mutual
agreement with respect to, and Applicable Transfer Date of, any Delayed Transfer Employee must
occur on or before the first anniversary of the Distribution.

          (b) In no event shall the transfer of employment from the WMB Group to the WPX Group or the
occurrence of the Distribution be considered a change in control for purposes of the Benefit Plans,
Employment Agreements or Equity Compensation Awards.

     Section 2.8 Annual Bonuses. At the time that annual bonuses are paid generally to WMB Employees
for the 2011 fiscal year, WMB shall inform WPX in writing of the bonus (if any) payable to each WPX
Employee (other than Delayed Transfer Employees whose Applicable Transfer Date occurs after the
date bonuses are paid for the 2011 fiscal year) under the applicable annual incentive plan or
arrangement of a member of the WMB Group with respect to the 2011 fiscal year (collectively, the
“Fiscal 2011 Employee Bonuses”), determined as if the WPX Employee had remained employed by
the WMB Group through the bonus payment date. WPX shall, or shall cause its Affiliates to, pay
each WPX Employee such bonus (if any) promptly following such notice and within the time period set
forth in the applicable annual incentive plan or arrangement,
and WMB shall promptly reimburse WPX for the gross amount of such bonus payments, plus the
employer portion of any employment or social insurance taxes paid by WPX in connection with
such bonus payments,
but in no event later than March 15,
2012. WPX shall be solely responsible for payment of all annual bonuses earned by WPX Employees
with respect to periods ending after the Benefits Commencement Date.

ARTICLE III

SERVICE CREDIT

     Section 3.1 Service Credit for Employee Transfers. The Benefit Plans shall provide the following
service crediting rules effective as of the Benefits Commencement Date: if a Delayed Transfer
Employee becomes employed by a member of the WMB Group or WPX Group after the Benefits Commencement
Date and on or before the first anniversary of the Distribution then such Delayed Transfer
Employee’s service with the WPX Group or the WMB Group (as applicable) following the Benefits
Commencement Date shall be recognized for purposes of eligibility and vesting under the appropriate
Benefit Plans, subject to the terms of those plans.

     Section 3.2 WMB Benefit Plans. Service from and after the Benefits Commencement Date of WPX
Employees with any member of the WPX Group or any other employer other than any member of the WMB
Group shall not be taken into account for any purpose under the WMB Benefit Plans.

     Section 3.3 WPX Benefit Plans. From and after the Benefits Commencement Date, WPX shall, and
shall cause the other members of the WPX Group and their
respective successors to, provide credit under the WPX Benefit Plans to WPX Employees for
their service with WPX and its predecessors and affiliates (including but not limited to

8

 

the WPX
Group, WMB, the WMB Group and, to the extent applicable, any business previously acquired by the
WMB Group or the WPX Group) to the same extent that such service was recognized prior to the
Benefits Commencement Date under the relevant WMB Benefit Plans. For avoidance of doubt, service
shall be credited for purposes of determining eligibility to participate and vesting;
provided, however, that service shall not be recognized to the extent that such
recognition would result in the duplication of benefits or duplication of credit for the same
period of service.

ARTICLE IV

CERTAIN WELFARE BENEFIT PLAN MATTERS

     Section 4.1 WPX Welfare Plans. Effective on the Benefits Commencement Date, WPX shall, or shall
cause another member of the WPX Group to, have in effect the WPX Welfare Plans to provide welfare
benefits to the WPX Employees participating in any WMB Welfare Plans immediately prior to the
Benefits Commencement Date. Each WPX Welfare Plan shall have terms and features (including benefit
coverage options and employer contribution provisions) as determined by WPX in its sole discretion.
From and after the Benefits Commencement Date, WPX and the WPX Group shall be solely and
exclusively responsible for all obligations and liabilities with respect to, or in any way related
to, the WPX Welfare Plans.

     Section 4.2 Continuation of Elections. As of the Benefits Commencement Date, WPX shall, to the
extent applicable, cause the WPX Welfare Plans to recognize and maintain all elections and
designations (including, without limitation, all coverage and contribution elections and
beneficiary designations) in effect with respect to WPX Employees prior to the Benefits
Commencement Date under the comparable WMB Welfare Plan and apply such elections and designations
under the WPX Welfare Plans for the remainder of the period or periods for which such elections or
designations are by their original terms effective, unless superseded by new elections made under
the WPX Welfare Plans.

     Section 4.3 Pre-Existing Conditions. As of the Applicable Transfer Date with respect to Delayed
Transfer Employees, the WPX Welfare Plans will not impose any limitations on coverage for
preexisting conditions other than such limitations as were applicable under the comparable WMB
Welfare Plans prior to the Applicable Transfer Date.

     Section 4.4 Long-Term Disability. Notwithstanding anything herein to the contrary, any individual
receiving long-term disability benefits under a WMB Welfare Plan as of immediately prior to the
Benefits Commencement Date shall continue to receive such benefits under such WMB Welfare Plan (in
accordance with and subject to the terms and conditions thereof) regardless of whether such
individual would become a WPX Employee if such individual returned to active employment after the
Benefits Commencement Date. For the avoidance of doubt, any WPX Employee who first becomes
eligible for long-term disability benefits on or after the Benefits Commencement Date shall receive
such benefits
pursuant to the terms and conditions of the applicable WPX Welfare Plan and shall not be
eligible for such benefits under a WMB Welfare Plan.

9

 

     Section 4.5 Short-Term Disability. Notwithstanding anything herein to the contrary, WPX shall
have sole responsibility for providing short-term disability benefits to any individual who, on the
Benefits Commencement Date, qualifies for short-term disability benefits under a WMB Benefit Plan
and who, if actively-employed at the time of the Distribution (or, if earlier, on the Benefits
Commencement Date), would have been or become a WPX Employee on that date. In addition, effective
as of the Benefits Commencement Date (or, with respect to Delayed Transfer Employees, the
Applicable Transfer Date), WPX shall assume responsibility for and make available to the WPX
Employees the existing eligibility and rights to short-term disability benefits that such WPX
Employees were entitled to from WMB immediately prior to the Benefits Commencement Date (or, with
respect to Delayed Transfer Employees, the Applicable Transfer Date, but without giving effect to
any short-term disability leave taken between the Benefits Commencement Date and the Applicable
Transfer Date).

     Section 4.6 Workers’ Compensation. Notwithstanding anything herein to the contrary, WPX shall
have sole responsibility for processing, and shall have sole liability with respect to, any
workers’ compensation claims of WPX Employees, regardless of when the event leading to such claims
occurred.

     Section 4.7 Other Welfare Benefits. Notwithstanding anything herein to the contrary, WPX shall,
as of the Benefits Commencement Date, assume all liability for providing adoption benefits,
educational reimbursement and reimbursement for relocation expenses to WPX Employees, regardless of
when the events leading to the entitlement of such benefits and/or reimbursements occurred.

ARTICLE V

DEFINED BENEFIT PLANS

     Section 5.1 WMB DB Plans. Effective as of the Benefits Commencement Date (or, with respect to
Delayed Transfer Employees, the Applicable Transfer Date), each WPX Employee and Delayed Transfer
Employee who is a participant, as of the Benefits Commencement Date (or, if applicable the
Applicable Transfer Date), in one or more of the WMB DB Plans shall cease active participation in
such WMB DB Plans and service with any member of the WPX Group or any other employer other than any
member of the WMB Group from and after the Benefits Commencement Date (or, with respect to Delayed
Transfer Employees, the Applicable Transfer Date) shall not be taken into account for any purpose
under such WMB DB Plans, except for purposes of determining the timing of the payment of
compensation or the provision of benefits under any WMB DB Plan, to the extent that such payment or
provision is triggered under such WMB DB Plan by a WPX Employee’s separation from service from the
WPX Group. Notwithstanding any provision of this Agreement to the contrary, from and after the
Benefits Commencement Date, the WMB Group shall remain and be exclusively responsible for all
obligations and Liabilities with respect to the WMB DB Plans, all assets of the WMB DB Plans, and
all benefits owed to participants in the WMB DB Plans (including the WPX Employees,
Former Employees and Delayed Transfer Employees), whether accrued before, on or after the
Benefits Commencement Date. In no event shall WMB transfer or cause to be
transferred to WPX or
any member of the WPX Group sponsored any of the WMB DB Plans or any Assets or Liabilities
maintained or accrued thereunder.

10

 

     Section 5.2 Vesting of Benefits. Notwithstanding anything herein to the contrary, WMB shall take
all steps necessary, including amending any WMB DB Plan, so that, as of the Benefits Commencement
Date, each WPX Employee (other than the Delayed Transfer Employees) who is a participant in a WMB DB Plan shall
be fully vested in his or her benefits under each WMB DB Plan in which such WPX Employee
participated while an employee of a member of the WMB Group.

     Section 5.3 Section 409A. WMB and WPX shall cooperate in good faith so that the Distribution and
the transactions contemplated by this Employee Matters Agreement will not result in adverse tax
consequences under Code Section 409A to any current or former employee of any member of the WMB
Group or any member of the WPX Group, or their respective Plan Payees, in respect of his or her
benefits under any WMB DB Plan that is subject to Code Section 409A.

ARTICLE VI

TAX-QUALIFIED DEFINED CONTRIBUTION PLANS

     Section 6.1 WMB DC Plan. Effective as of the Benefits Commencement Date (or, with respect to
Delayed Transfer Employees, the Applicable Transfer Date), each WPX Employee or Delayed Transfer
Employee who is a participant, as of the Benefits Commencement Date (or, if applicable the
Applicable Transfer Date), in the WMB DC Plan shall cease active participation in the WMB DC Plan
(and, for all purposes, be treated as a terminated participant) and service with any member of the
WPX Group or any other employer other than any member of the WMB Group from and after the Benefits
Commencement Date (or, with respect to Delayed Transfer Employees, the Applicable Transfer Date)
shall not be taken into account for any purpose under the WMB DC Plan. Notwithstanding any
provision of this Agreement to the contrary, from and after the Benefits Commencement Date, the WMB
Group shall be exclusively responsible for all obligations and Liabilities with respect to the WMB
DC Plan, all assets of the WMB DC Plan, and all benefits owed to participants in the WMB DC Plan
(including the WPX Employees, Former Employees and Delayed Transfer Employees), whether accrued
before, on or after the Benefits Commencement Date. In no event shall WMB transfer or cause to be
transferred to WPX or any member of the WPX Group sponsorship of the WMB DC Plan or any Assets or
Liabilities maintained or accrued thereunder (except pursuant to an eligible rollover
distribution).

     Section 6.2 Vesting of Benefits. Notwithstanding anything herein to the contrary, WMB shall take
all steps necessary, including amending the WMB DC Plan, so that, as of the Benefits Commencement
Date, each WPX Employee (other than the Delayed Transfer Employees) shall be fully vested in his or her benefits
under the WMB DC Plan in which such WPX Employee participated while an employee of a member of the
WMB Group.

11

 

     Section 6.3 WPX DC Plan. Effective as of the Benefits Commencement Date, WPX or another member of
the WPX Group shall establish a defined contribution plan that qualifies under Code Section 401(a),
(such plan, the “WPX DC Plan”). The WPX DC Plan shall have terms and features (including
employer contribution provisions) that are determined by WPX in its sole discretion. WPX or a
member of the WPX Group shall be solely responsible for taking all necessary, reasonable, and
appropriate actions (including the submission of the WPX DC Plan to the Internal Revenue Service
for a determination of tax-qualified status) to establish, maintain and administer the WPX DC Plan
so that it is qualified under Section 401(a) of the Code.

     Section 6.4 Contributions Due. All contributions payable to the WMB DC Plan with respect to
employee deferrals, matching contributions and employer contributions for WPX Employees up to the
Benefits Commencement Date (and, with respect to the Delayed Transfer Employees, the Applicable
Transfer Date), determined in accordance with the terms and provisions of the WMB DC Plan, ERISA
and the Code, shall be paid by (and be the sole liability of) WMB or a member of the WMB Group to
the WMB DC Plan.

ARTICLE VII

EQUITY COMPENSATION

     Section 7.1 General Treatment of Outstanding WMB Equity Compensation Awards.

          (a) Notwithstanding any other provision of this Employee Matters Agreement or the Separation
Agreement to the contrary, from and after the Distribution, each outstanding option to purchase WMB
Common Stock (“WMB Option”) or each outstanding restricted stock unit with respect to WMB
Common Stock (whether or not subject to performance-based vesting criteria) (“WMB RSUs”),
in each case that was granted under or pursuant to any equity compensation plan or arrangement of
WMB (each such WMB Option or WMB RSU, a “WMB Equity Compensation Award”), that, as of the
Distribution, is held by any WPX Employee (which, for purposes of this Article VII, shall not
include any Delayed Transfer Employees whose Applicable Transfer Date occurs after the
Distribution) or non-employee member of the WPX board of directors, other than the portion of each
Pre-2006 Option allocated to WMB, shall be assumed by WPX (each such assumed WMB Equity
Compensation Award, a “Converted WPX Equity Compensation Award”).

          (b) In connection with the assumption by WPX, each Converted WPX Equity Compensation Award,
other than the Pre-2006 Options, shall be adjusted into an option or restricted stock unit award,
as applicable, with respect to shares of WPX Common Stock having the same intrinsic value as the
applicable WMB Equity Compensation Award, with the number of shares of WPX Common Stock subject to
each such award equal to the number of shares of WMB Common Stock subject to each such award as in
effect immediately prior to the Distribution multiplied by the WPX Exchange Ratio, rounded down to the nearest
whole share and effective upon the Distribution. The per share exercise price of any Converted WPX
Equity Compensation Award, other than the
Pre-2006 Options, that is a stock option shall also be adjusted effective upon the
Distribution by dividing the applicable per share exercise price of the stock option as in
effect
immediately prior to the Distribution by the WPX Exchange Ratio, with the result rounded up to the
nearest whole cent.

12

 

          (c) The Converted WPX Equity Compensation Awards that relate to WMB Options granted prior to
January 1, 2006, along with each other WMB Option granted prior to January 1, 2006 that, as of the
Distribution, is held by any WMB Employee, Former Employee or non-employee member of the WMB board
of directors (collectively, the “Pre-2006 Options”), shall be adjusted, in part, into an
option to acquire WPX Common Stock (with the number of shares of WPX Common Stock subject to such
portion of the option equal to the number of shares of WMB Common Stock subject to the original WMB
Option as in effect immediately prior to the Distribution multiplied by the Distribution Ratio) and shall
remain, in part, an option to acquire WMB Common Stock (with the number of shares of WMB Common
Stock subject to such portion of the option equal to the number of shares of WMB Common Stock
subject to the original WMB Option as in effect immediately prior to the Distribution), in each
case, having an aggregate same intrinsic value as the original WMB Option, rounded down to the
nearest whole share and effective upon the Distribution. The per share exercise price of the
Pre-2006 Options shall also be adjusted effective upon the Distribution by (i) with respect to the
portion of the Pre-2006 Option that is allocated to WPX, dividing the per share exercise price of
the stock option as in effect immediately prior to the Distribution by the WPX Exchange Ratio and
(ii) with respect to the portion of the Pre-2006 Option that is allocated to WMB, dividing the per
share exercise price of the stock option as in effect immediately prior to the Distribution by the
WMB Exchange Ratio, in each case, with the results rounded up to the nearest whole cent. For the
avoidance of doubt, the portion of the Pre-2006 Options held by any WMB Employee, Former Employee
or non-employee member of the WMB board of directors allocated to WPX shall be assumed by WPX upon
the Distribution.

          (d) The performance criteria applicable to any Converted WPX Equity Compensation Awards issued in 2010 or 2011 that
are performance-based restricted stock units shall also be modified so that “total stockholder
return” for purposes of such performance-based restricted stock units shall be based on the sum of
the 20-day average closing price of WMB Common Stock at the end of the performance period and the
20-day average closing price of WPX Common Stock, multiplied by the Distribution Ratio, at the end
of the performance period.

          (e) Prior to the Distribution, WPX shall establish equity compensation plans, so that upon the
Distribution, WPX shall have in effect an equity compensation plan containing substantially the
same terms as each original WMB equity compensation plan under which any Converted WPX Equity
Compensation Award was granted. From and after the Distribution, each Converted WPX Equity
Compensation Award shall be subject to the terms of the applicable WPX equity compensation plan and
the award agreement governing such Converted WPX Equity Compensation Award. From and after the
Distribution, WPX shall retain, pay, perform, fulfill and discharge all Liabilities arising out of
or relating to the Converted WPX Equity Compensation Awards. Effective as of the
Distribution, each WPX Employee and non-employee member of the WPX board of directors shall
cease participation in all WMB equity compensation plans other than with respect to the Pre-2006
Options.

13

 

          (f) In all events, the adjustments to the Converted WPX Equity Compensation Awards provided
for in this Section 7.1 shall be made in a manner that, as determined by WMB and WPX, avoids
adverse tax consequences under Code Section 409A.

     Section 7.2 Tax Withholding and Reporting. Effective from and after the Distribution, WPX shall
be solely responsible for all Tax withholding obligations with respect to the equity compensation
awards applicable to WPX Employees, and WMB shall be solely responsible for all Tax withholding
obligations with respect to equity compensation awards applicable to WMB Employees.

     Section 7.3 Employee Stock Purchase Plan. All WPX Employees shall cease active participation in
The Williams Companies Employee Stock Purchase Plan with respect to offering periods ending after
the Benefits Commencement Date. For the avoidance of doubt, the WPX Employees who participated in
The Williams Companies Employee Stock Purchase Plan prior to the Benefits Commencement Date shall
continue to participate in the offering period under The Williams Companies Employee Stock Purchase
Plan ending prior to the Benefits Commencement Date.

ARTICLE VIII

BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD-PARTY CLAIMS

     Section 8.1 General Principles. From and after the Distribution, any services that a member of
the WMB Group shall provide to the members of the WPX Group relating to any Benefit Plans shall be
set forth in the Transition Services Agreement.

     Section 8.2 Benefit Plan Third-Party Claims. In the event of any conflict or inconsistency
between the following provision on the one hand, and the Separation Agreement or any of the other
Ancillary Agreements on the other hand, the following provision shall control over the inconsistent
provisions to the extent of the inconsistency:

     If a Third-Party Claim (as defined in Section 7.5(a) of the Separation Agreement) relates
solely to the Benefit Plan of the Indemnifying Party, WPX and WMB shall take all actions necessary
to substitute the Indemnifying Party and/or the relevant Benefit Plan of the Indemnifying Party as
the proper party for such Third-Party Claim. If the Third-Party Claim relates to both a WPX
Benefit Plan and a WMB Benefit Plan, WPX and WMB shall take all actions necessary to separate or
otherwise partition the Third-Party Claim so as to allow each party to solely defend the claim
relating to its own Benefit Plan (unless the parties mutually agree that such a separation or
partition is unnecessary or inadvisable). If the Third-Party Claim cannot be transferred to the
Indemnifying Party or separated or partitioned so as to allow each party to solely defend the claim
relating to its own Benefit Plan, then WMB shall defend the Third-Party Claim and WPX may elect to
participate in
(but not control) the defense, compromise, or settlement of any such Third-Party Claim at its
own expense (including allocated costs of WPX in-house counsel and other WPX personnel).

14

 

ARTICLE IX

COOPERATION

     Section 9.1 Cooperation. Following the date of this Employee Matters Agreement, WMB and WPX
shall, and shall cause their respective Subsidiaries and Affiliates to, use reasonable best efforts
to cooperate with respect to any employee compensation or benefits matters that the WMB Group or
the WPX Group, as applicable, reasonably determines require the cooperation of both the WMB Group
and the WPX Group in order to accomplish the objectives of this Employee Matters Agreement.
Without limiting the generality of the preceding sentence, (a) the WMB Group and the WPX Group
shall cooperate in coordinating each of their respective payroll systems in connection with the
transfers of WPX Employees and Delayed Transfer Employees to the WPX Group, (b) the WMB Group
shall, to the extent permitted by applicable Law, transfer all employment-related records relating
to WPX Employees to the WPX Group, to the extent such records are in the WMB Group’s possession or
control, and (c) the WMB Group and the WPX Group shall, to the extent permitted by applicable Law,
transfer records to each other as reasonably necessary for the proper administration of all Equity
Compensation Awards (including the Pre-2006 Options), to the extent such records are in the other
party’s possession or control. The obligations of the WPX Group and the WMB Group to cooperate
pursuant to this Section 9.1 shall remain in effect until all audits of all Benefit Plans
(including, for this purpose, any equity compensation plan) with respect to which the other party
may have information have been completed and the applicable statute of limitations with respect to
such audits has expired.

ARTICLE X

MISCELLANEOUS

     Section 10.1 Further Assurances. Prior to the Distribution Date, if either party identifies any
commercial or other service that is needed to ensure a smooth and orderly transition of its
business in connection with the consummation of the transactions contemplated hereby, and that is
not otherwise governed by the provisions of this Employee Matters Agreement, the parties will
cooperate in determining whether there is a mutually acceptable arm’s-length basis on which the
other party will provide such service under the Transition Services Agreement.

     Section 10.2 Employment Tax Reporting Responsibility. WPX and WMB hereby agree to follow the
standard procedure for United States employment tax withholding as provided in Section 4 of Rev.
Proc. 2004-53, I.R.B. 2004-35.

     Section 10.3 Data Privacy. The parties agree that any applicable data privacy Laws and any other
obligations of the WPX Group and the WMB Group to maintain the confidentiality of any employee
information or information held by any Benefit Plans in accordance with applicable Law shall govern
the disclosure of employee information
among the parties under this Employee Matters Agreement. WPX and WMB shall ensure that they
each have in place appropriate technical and organizational security measures to protect the
personal data of the WPX Employees and WMB Employees.

15

 

     Section 10.4 Third Party Beneficiaries. Nothing contained in this Employee Matters Agreement shall
be construed to create any third-party beneficiary rights in any individual, including without
limitation any WPX Employee, WMB Employee or Former Employee (including any dependent or
beneficiary thereof) nor shall this Employee Matters Agreement be deemed to amend any Benefit Plan
or to prohibit WMB, WPX or their respective Affiliates from amending or terminating any Benefit
Plan (including for this purpose, any equity compensation plan).

     Section 10.5 Effect if Distribution Does Not Occur. If the Distribution does not occur, then all
actions and events that are, under this Employee Matters Agreement, to be taken or occur effective
as of the Distribution shall not be taken or occur except to the extent specifically agreed by the
parties.

     Section 10.6 Incorporation of Separation Agreement Provisions. The following provisions of the
Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly
specified herein, such provisions shall apply as if fully set forth herein (references in this
Section 10.6 to an “Article” or “Section” shall mean Articles or Sections of the Separation
Agreement, and references in the material incorporated herein by reference shall be references to
the Separation Agreement): Article V (relating to Exchange of Information; Confidentiality);
Article VI (relating to Additional Covenants and Other Matters); Article VII (relating to Mutual
Releases; Indemnification); Article VIII (relating to Termination); Article IX (relating to Dispute
Resolution); and Article X (relating to Miscellaneous).

     Section 10.7 No Representation or Warranty. WMB makes no representation or warranty with respect
to any matter in this Employee Matters Agreement, including, without limitation, any representation
or warranty with respect to the legal or tax status or compliance of any Benefit Plan, compensation
arrangement or Employment Agreement, and WMB disclaims any and all liability with respect thereto.

[The remainder of this page is intentionally left blank.]

16

 

     IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to be executed by
their duly authorized representatives.

	 	 	 	 	 
	 	THE WILLIAMS COMPANIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WPX ENERGY, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page to Employee Matters Agreement]exv10w1

Exhibit 10.1

 

FORM OF TRANSITION SERVICES AGREEMENT

between

THE WILLIAMS COMPANIES, INC.

and

WPX ENERGY, INC.

Dated as of           , 2011

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Table of Definitions
	 	 	1	 
	Section 1.2 Certain Defined Terms
	 	 	2	 
	Section 1.3 Other Capitalized Terms
	 	 	4	 
	 
	 	 	 	 
	ARTICLE II TERM
	 	 	5	 
	 
	 	 	 	 
	Section 2.1 Term
	 	 	5	 
	Section 2.2 No Extension of Term
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III SERVICES
	 	 	5	 
	 
	 	 	 	 
	Section 3.1 Performance of Services
	 	 	5	 
	Section 3.2 Independent Contractor Status
	 	 	6	 
	Section 3.3 Service Standards
	 	 	6	 
	Section 3.4 Conflict of Interest
	 	 	7	 
	Section 3.5 WPX’s Obligations
	 	 	7	 
	Section 3.6 Third Party Consents
	 	 	7	 
	Section 3.7 Services Provided by WPX
	 	 	8	 
	 
	 	 	 	 
	ARTICLE IV COMPENSATION
	 	 	8	 
	 
	 	 	 	 
	Section 4.1 Charge for Services
	 	 	8	 
	Section 4.2 Taxes
	 	 	8	 
	Section 4.3 Invoicing and Payment
	 	 	8	 
	 
	 	 	 	 
	ARTICLE V WMB SUBCONTRACTORS AND PERSONNEL
	 	 	9	 
	 
	 	 	 	 
	Section 5.1 Subcontractors
	 	 	9	 
	Section 5.2 Compliance
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VI TRANSITION SERVICES MANAGEMENT
	 	 	9	 
	 
	 	 	 	 
	Section 6.1 Transition Services Management Process
	 	 	9	 
	Section 6.2 Books and Records; Audit
	 	 	9	 
	Section 6.3 Audit Rights for Intellectual Property
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VII FACILITIES AND SYSTEMS
	 	 	10	 
	 
	 	 	 	 
	Section 7.1 WPX Facilities
	 	 	10	 
	Section 7.2 WMB Facilities and WMB Systems
	 	 	11	 
	Section 7.3 Physical Security for Facilities
	 	 	11	 

ii

 

TABLE OF CONTENTS
(Continued)

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VIII TECHNOLOGY AND PROPRIETARY RIGHTS
	 	 	11	 
	 
	 	 	 	 
	Section 8.1 Related Agreements
	 	 	11	 
	Section 8.2 Limited License to Use WMB Work Processes and Software
	 	 	12	 
	Section 8.3 No Implied Licenses
	 	 	12	 
	Section 8.4 Managed WPX Contracts
	 	 	12	 
	 
	 	 	 	 
	ARTICLE IX DATA SECURITY
	 	 	12	 
	 
	 	 	 	 
	Section 9.1 Ownership
	 	 	12	 
	Section 9.2 Data Security
	 	 	12	 
	 
	 	 	 	 
	ARTICLE X REPRESENTATIONS AND WARRANTIES
	 	 	12	 
	 
	 	 	 	 
	Section 10.1 Service Warranty
	 	 	12	 
	Section 10.2 Disclaimer
	 	 	13	 
	 
	 	 	 	 
	ARTICLE XI INSURANCE
	 	 	13	 
	 
	 	 	 	 
	Section 11.1 Coverage
	 	 	13	 
	Section 11.2 Subrogation
	 	 	13	 
	Section 11.3 Certificates of Insurance
	 	 	13	 
	Section 11.4 Risk of Loss
	 	 	13	 
	 
	 	 	 	 
	ARTICLE XII TERMINATION
	 	 	14	 
	 
	 	 	 	 
	Section 12.1 Early Termination of the Services
	 	 	14	 
	Section 12.2 WMB’s Right to Terminate for Compliance Issues
	 	 	14	 
	Section 12.3 Survival
	 	 	14	 
	Section 12.4 Effect of Termination
	 	 	14	 
	 
	 	 	 	 
	ARTICLE XIII GENERAL PROVISIONS
	 	 	14	 
	 
	 	 	 	 
	Section 13.1 Limitation of Liability; Indemnification
	 	 	14	 
	Section 13.2 Compliance With Laws
	 	 	15	 
	Section 13.3 Further Action
	 	 	15	 
	Section 13.4 Expenses
	 	 	15	 
	Section 13.5 Authorization
	 	 	15	 
	Section 13.6 Assignment
	 	 	15	 
	Section 13.7 Force Majeure
	 	 	15	 
	Section 13.8 Acknowledgment
	 	 	16	 
	Section 13.9 Order of Precedence
	 	 	16	 

iii

 

TABLE OF CONTENTS
(Continued)

	 	 	 	 	 
	 	 	Page	 
	Section 13.10 References
	 	 	16	 
	Section 13.11 Incorporation of Separation Agreement Provisions
	 	 	16	 
	 
	 	 	 	 
	Schedule A Statements of Work (by Functional Service Area)
	 	 	 	 
	 
	 	 	 	 
	Schedule A-1 Payroll and Human Resources Administration
	 	 	 	 
	Schedule A-2 Information Technology
	 	 	 	 
	Schedule A-3 Finance and Accounting, Cash Management and Treasury
	 	 	 	 
	Schedule A-4 Tax Services
	 	 	 	 
	Schedule A-5 Enterprise Business Services
	 	 	 	 
	Schedule A-6 Internal Audit Services
	 	 	 	 
	Schedule A-7 Corporate Communications and Investor Relations
	 	 	 	 
	Schedule A-8 Legal, Regulatory, Government Affairs and Records Management
	 	 	 	 
	Schedule A-9 Real Estate and Facilities Management
	 	 	 	 
	Schedule A-10 Insurance and Claims Administration
	 	 	 	 
	 
	 	 	 	 
	Schedule B Managed WPX Contracts
	 	 	 	 
	Schedule C Service Management Model
	 	 	 	 
	Schedule D List of Supported Facilities
	 	 	 	 

iv

 

TRANSITION SERVICES AGREEMENT

     TRANSITION SERVICES AGREEMENT, dated as of                       (this “Agreement”), by and
between The Williams Companies, Inc., a Delaware corporation (“WMB”), and WPX Energy, Inc.,
a Delaware corporation (“WPX”).

RECITALS

     A. Pursuant to the Separation and Distribution Agreement, dated as of the date hereof, by and
between WMB and WPX (the “Separation Agreement”), the parties are agreeing to separate the
exploration and production business and operations of WMB from the remainder of WMB.

     B. The parties also desire that the WMB Entities provide the WPX Entities with certain
services related to the WPX Business described in this Agreement on and after the Distribution
Date, as more fully set forth herein.

AGREEMENT

     In consideration of the foregoing and the mutual covenants and agreements herein contained,
and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Table of Definitions. The following terms have the meanings set forth on the pages
referenced below:

	 	 	 	 	 
	Definition	 	 	Page	 
	Agreement 
	 	 	1	 
	Charges 
	 	 	5	 
	Equipment 
	 	 	2	 
	Force Majeure Event 
	 	 	2	 
	Functional Service Areas 
	 	 	2	 
	Intellectual Property Rights 
	 	 	3	 
	Managed WPX Contracts 
	 	 	3	 
	Pricing 
	 	 	5	 
	Separation Agreement 
	 	 	1	 
	Services 
	 	 	3	 
	Software 
	 	 	3	 
	Subcontractors 
	 	 	3	 
	Systems 
	 	 	3	 
	Term 
	 	 	5	 
	Third Party Consents 
	 	 	3	 
	Transition Service Managers 
	 	 	3	 
	WMB 
	 	 	1	 

 

 

	 	 	 	 	 
	Definition	 	 	Page	 
	WMB Equipment 
	 	 	3	 
	WMB Facilities 
	 	 	3	 
	WMB Personnel 
	 	 	3	 
	WMB Service Manager 
	 	 	3	 
	WMB Software 
	 	 	4	 
	WMB Systems 
	 	 	4	 
	WPX 
	 	 	1	 
	WPX Data 
	 	 	4	 
	WPX Equipment 
	 	 	4	 
	WPX Facilities 
	 	 	4	 
	WPX Personnel 
	 	 	4	 
	WPX Service Manager 
	 	 	4	 
	WPX Software 
	 	 	4	 
	WPX Systems 
	 	 	4	 

     Section 1.2 Certain Defined Terms. For the purposes of this Agreement:

          “Equipment” means computer and telecommunications equipment (without regard to the
entity owning or leasing such equipment) including: (a) servers, personal computers, and
associated attachments, accessories, peripheral devices, printers, cabling and other equipment; and
(b) private branch exchanges, multiplexors, modems, CSUs/DSUs, hubs, bridges, routers, switches and
other telecommunications equipment.

          “Force Majeure Event” means any riot, war, public disturbance, strike, lockout, labor
dispute, fire explosion, storm, flood, acts of God, major breakdown or failure of transportation,
manufacturing, distribution or storage facilities, or any other event which is not within the
control of the party whose performance is interfered with and which by the exercise of reasonable
diligence such party is unable to prevent.

          “Functional Service Areas” means the following categories of services, each of which
are set forth in more detail in the following statements of work: Payroll and Human Resources
Administration (Schedule A-1), Information Technology (Schedule A-2), Finance and Accounting, Cash
Management and Treasury (Schedule A-3), Tax Services (Schedule A-4), Enterprise Business Services
(Schedule A-5), Internal Audit Services (Schedule A-6), Corporate Communications and Investor
Relations (Schedule A-7), Legal, Regulatory, Government Affairs and Records Management (Schedule
A-8), Real Estate and Facilities Management (Schedule A-9) and Insurance and Claims Administration
(Schedule A-10).

          “Intellectual Property” means (a) patents and pending patent applications; (b)
trademarks, service marks, trade names and trade dress; (c) copyrights, including copyrights in
computer Software; (d) confidential and proprietary information, including trade secrets; (e) data
base rights; (f) design rights and rights in designs; (g) rights in domain names; (h) rights in
know-how; (i) all other intellectual property rights subsisting
now or in the future, anywhere in the world; and (j) registrations, right to register and
pending applications for registration of the foregoing.

2

 

          “Intellectual Property Rights” means any and all common law, statutory and other
Intellectual Property rights honored and/or enforceable under any laws.

          “Managed WPX Contracts” means, collectively, the WPX Entity contracts that are (a)
identified on Schedule B as of the date hereof or (b) subsequently added thereto by
agreement of the parties as additional contracts with respect to which WMB will have management
responsibility.

          “Pricing” means cost information provided by WMB for each Functional Service Area
based on actual monthly cost allocations for the prior twelve months as set forth in Schedule A.

          “Services” means the services provided in the Functional Service Areas pursuant to
Schedule A.

          “Software” means programs and programming (including the supporting documentation,
media, on-line help facilities and tutorials).

          “Subcontractors” means the WMB Entities’ contractors or other agents that perform a
portion of the Services.

          “Systems” means WPX Systems and the WMB Systems or either of them.

          “Third Party Consents” means the consents required from third parties in connection
with the WMB Entities’ provision, and WPX Entities’ receipt, of the Services and/or Managed WPX
Contracts.

          “Transition Service Managers” means the WPX Service Manager and the WMB Service
Manager.

          “WMB Equipment” means Equipment owned or leased by any WMB Entity or Subcontractor and
used in connection with the Services, but excluding WPX Equipment.

          “WMB Facilities” means the facilities maintained by the WMB Entities and the
Subcontractors providing Services on behalf of the WMB Entities.

          “WMB Personnel” means those employees, representatives, contractors, subcontractors
and agents of the WMB Entities who perform any Services under this Agreement.

          “WMB Service Manager” means the individual appointed by WMB to represent WMB and be
primarily responsible for the management of the WMB/WPX relationship under this Agreement.

          “WMB Software” means all Software programs and programming owned by, or provided under
license to, WMB and used to provide the Services (and all modifications, replacements, upgrades,
enhancements, documentation, materials and media relating to the foregoing), but excluding WPX
Software.

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          “WMB Systems” means the WMB IT platform used to provide the Services, plus any other
interconnected grouping of WMB Equipment and/or WMB Software used in connection with the Services,
and all additions, modifications, substitutions, upgrades or enhancements thereto.

          “WPX Data” means (a) any data or information of the WPX Entities, or their respective
vendors or other business partners, that is provided to or obtained by the WMB Entities solely in
the performance of their obligations under this Agreement, including data and information regarding
the WPX Business (including without limitation WPX products, consumer markets, assets and finances)
or the WPX Facilities, and (b) any data or information collected or processed in connection with
the Services.

          “WPX Equipment” means all Equipment owned or leased by any WPX Entity and used in
connection with the Services, but excluding WMB Equipment.

          “WPX Facilities” means the locations where the WPX Entities will receive Services as
set forth on Schedule D.

          “WPX Personnel” means the employees, representatives, contractors, subcontractors and
agents of the WPX Entities.

          “WPX Service Manager” means the individual appointed by WPX to represent WPX and be
primarily responsible for the management of the WMB/WPX relationship under this Agreement.

          “WPX Software” means all Software owned by, or provided under license to, the WPX
Entities and used in connection with the Services (and all modifications, replacements, upgrades,
enhancements, documentation, materials and media relating to the foregoing), but excluding WMB
Software.

          “WPX Systems” means an interconnected grouping of WPX Equipment and/or WPX Software
used in connection with the Services, and all additions, modifications, substitutions, upgrades or
enhancements thereto.

         Section 1.3 Other Capitalized Terms. Capitalized terms not defined in this Agreement shall have
the meanings ascribed to them in the Separation Agreement.

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ARTICLE II

TERM

     Section 2.1 Term. The term of this Agreement will begin on, and include, the Distribution Date
and continue in effect for one year, unless terminated earlier in accordance with the terms of this
Agreement (the “Term”).

     Section 2.2 No Extension of Term. There will be no extension of Services beyond the Term.

ARTICLE III

SERVICES

     Section 3.1 Performance of Services.

          (a) Performance. During the Term of this Agreement, WMB shall provide (or shall cause
one or more of the WMB Entities to provide) the Services to the WPX Entities. Any Service to be
provided under this Agreement may be provided by WMB directly or through any of the WMB Entities.
WMB shall not be relieved of any of its obligations under this Agreement as a result of the
provision of Services by any other WMB Entity pursuant to this Section 3.1(a).

          (b) Identification of Services Requested and Charges.

               (i) The parties agree to make available appropriate subject matter experts to meet to identify
the specific tasks that are an inherent, necessary, and customary part of the Services for each
Functional Service Area. WPX will agree to pay the Pricing plus WMB’s actual expenses (including
retention payments payable to WMB Personnel primarily engaged in providing Services or otherwise
agreed by the Parties to be critical to the Parties’ obligations under this Agreement), plus an
administrative reimbursement fee of 8.5% of costs and expenses (together, the “Charges”).

               (ii) In the event that the parties fail to agree in writing upon Charges or a description of
Services for a Functional Service Area prior to the Distribution Date, then the WMB Entities may,
in the sole discretion of WMB, either (A) be excused from performing any or all of the Services
during the Term or (B) provide any or all of the Services in substantially similar scope, quality
and nature as those provided by the WMB Entities as of the date immediately prior to the
Distribution Date for the Charges proposed by WMB.

          (c) Subsequent Adjustments. The parties acknowledge that certain items of Equipment
or Software or certain contracts existing as of the date hereof may have been inadvertently omitted
from, included in or mischaracterized under, the applicable Schedules. Accordingly, the parties
agree that to the extent any such omitted, included or mischaracterized item is discovered, the
discovering party shall promptly notify the other party and the parties shall promptly amend the
relevant Schedule. However, if such discovered information (i) could reasonably result in a
material increase
or material decrease in the cost of providing Services, (ii) would require any WMB Entity

5

 

to
retain additional employees or resources, (iii) creates a conflict of interest or other adverse
consequence for any WMB Entity, or (iv) becomes impracticable due to reasons outside the control of
WMB, then the WMB Entities will have no obligation to perform such Services, and WMB will have no
obligation to amend the relevant Schedule.

          (d) WPX Input. To the extent a WMB Entity responsibility set forth in a statement of
work on Schedule A relies upon input, instructions or policies from any WPX Entity in
performing such Services, the WMB Entities will comply with WPX’s reasonable input, instructions or
policies, provided, that until the relevant WPX Entity provides such input, instructions or
policies, the WMB Entities may, in the sole discretion of WMB, either (i) be excused from
performing the relevant Services or (ii) provide the relevant Services in accordance with the WMB
Entities’ applicable practices as of the date the relevant Services are to be delivered.

     Section 3.2 Independent Contractor Status.

          (a) Each Person (including any employee or agent of the WMB Entities) that provides Services
hereunder is an independent contractor, with all of the attendant rights and liabilities of an
independent contractor, and not an agent or employee of any WPX Entity. Any provision in this
Agreement, or any action by any WPX Entity, that may appear to give any WPX Entity the right to
direct or control any WMB Entity in performing under this Agreement means that such WMB Entity
shall follow the desires of such WPX Entity in results only. Nothing in this Agreement shall be
construed to create the relationship of partnership, principal and agent, joint venture, or
fiduciary and beneficiary between or among any WMB Entity, on the one hand, and any WPX Entity, on
the other hand.

          (b) Each WMB Entity shall withhold and pay any contribution measured by wages of its employees
required by the Federal Insurance Corporation Act and all other contributions, taxes and other
charges required to be withheld or paid pursuant to any state or federal statute and shall accept
exclusive liability therefore.

     Section 3.3 Service Standards. Unless otherwise specified in this Agreement (including the
Schedules), the Services under this Agreement will initially be performed in substantially the same
scope, quality and nature (including historical usage levels) that such Services were generally
performed by the WMB Entities for the WPX Businesses as of the date immediately prior to the
Distribution Date, and thereafter will continue to be performed in substantially the same scope,
quality and nature (including usage levels) as WMB generally performs such services for the WMB
Businesses, except to the extent such Services differ because of the need to follow legal corporate
formalities and to keep WPX Data separate from WMB data. In no event will any WMB Entity be
required to make any customization to the Services (or the WMB Systems or work processes) that are
unique to the WPX Entities, beyond the customizations that WMB elects to make to support the WMB
Systems and work processes. To the extent WPX requests Services that exceed the historical usage
levels of the WPX Businesses, and WMB agrees in its sole discretion to provide such Services, the
parties will determine pricing as described in Section 3.1(b).

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The WPX Entities shall comply with the WMB Entities’ applicable work processes, policies and
procedures and any applicable terms and conditions of third party suppliers.

     Section 3.4 Conflict of Interest. In the event that WMB determines there is a conflict of
interest (other than a conflict of interest described in Section 12.2(b), which shall be
governed by that Section) between any WMB Entity and any WPX Entity related to the performance of
the Services on an issue that could reasonably have an adverse impact on any WMB Entity with regard
to such entity’s code of business conduct or public relations, or with regard to a Governmental
Authority, WMB shall notify WPX of such issue. The parties will then work together, through the
Transition Service Managers, to resolve such issue. If the parties are unable to resolve such
issue to their mutual satisfaction within 30 days, the WMB Entities will not be obligated to
perform the Services giving rise to the conflict of interest, and the WPX Entities shall have the
right to perform such Services for themselves solely to the extent necessary to avoid the conflict
of interest.

     Section 3.5 WPX’s Obligations.

          (a) The WPX Entities shall (i) use the Services in substantially the same manner and for the
same purposes (and for no other purpose) as such Services were used by the WPX Entities as of the
date immediately prior to the Distribution Date and (ii) endeavor in good faith to cease using such
Services as soon as practicable following the Distribution Date but in any event no later than the
termination date set forth for any particular Service in Schedule A. No WPX Entity shall,
directly or indirectly, resell or permit the use of any of the Services to or by any third party.

          (b) WMB’s failure to perform its obligations under this Agreement shall be excused if and to
the extent such non-performance is caused by (i) the actions or inactions of any WPX Entity or a
third party contractor performing obligations on behalf of any WPX Entity under this Agreement, or
(ii) the failure of any WPX Entity or such a third party contractor to perform the WPX Entities’
obligations under this Agreement or otherwise comply with the WMB Entities’ work processes,
policies and procedures and any requirements under the WMB Entities’ third party contracts. WPX
shall be responsible for any additional costs incurred by any WMB Entity in connection with
providing the Services as a result of (i) or (ii) above.

     Section 3.6 Third Party Consents.

          (a) Responsibility. Each party will be responsible for obtaining the Third Party
Consents required under its, and its Affiliates’, third party contracts pertaining to any Software,
Equipment, Systems or other materials or associated services required in connection with the
Services under this Agreement. Such responsibility shall include the administrative activities
necessary to obtain the Third Party Consents and payment of the fees and/or expenses associated
with obtaining the Third Party Consents. For the avoidance of doubt, WPX will be responsible for
the cost of obtaining Third Party Consents necessary for any Managed WPX Contracts.

          (b) Contingent Arrangements. If, despite using commercially reasonable efforts,
either party is unable to obtain a Third Party Consent for which it is

7

 

responsible, the parties will consider such third party contract to be a transfer not effected
on or before the Effective Time as described in Section 2.4 of the Separation Agreement, or may
agree that such third party contract will be a Managed WPX Contract. Nothing in this Section
3.6 obligates any WMB Entity to provide any Service to any WPX Entity after the Term.

     Section 3.7 Services Provided by WPX. In the event that WMB determines that it will require
services related to the WMB Business from WPX on or after the Distribution Date, then WMB shall
provide WPX with a written notice requesting such services. WPX agrees that, upon delivery of any
such notice, it will use commercially reasonable efforts to provide such services on the same terms
and conditions as the Services provided hereunder.

ARTICLE IV

COMPENSATION

     Section 4.1 Charge for Services. WPX shall pay to WMB the Charges set forth in Section
3.1, and any other charges provided for elsewhere in this Agreement, for the Services in
accordance with the terms set forth in this Agreement.

     Section 4.2 Taxes. In addition to the other sums payable under this Agreement, WPX shall pay, and
hold each WMB Entity harmless against, all sales, use or other taxes, or other fees or assessments
imposed by law in connection with the provision of the Services, other than income, franchise or
margin taxes measured by WMB’s net income or margin and other than any gross receipts or other
privilege taxes imposed on WMB. WMB and WPX shall cooperate with each other and use commercially
reasonable efforts to assist the other in entering into such arrangements as the other may
reasonably request in order to minimize, to the extent lawful and feasible, the payment or
assessment of any taxes relating to the transactions contemplated by this Agreement; provided,
however, that nothing in this Section 4.2 shall obligate WMB to cooperate with, or assist,
WPX in any arrangement proposed by WPX that would, in WMB’s sole discretion, have a detrimental
effect on any WMB Entity.

     Section 4.3
Invoicing and Payment. WMB will invoice WPX by the 8th Business Day of  the month following the month in which Services were performed; or,
for Services priced at an hourly rate, the month following  the month in which hours of effort have been reported to WMB. WPX will pay undisputed invoiced amounts
(including any undisputed amount of an invoice where only a portion
is in dispute) by the 28th calendar day of the month in which such invoice is received, and any disputed
portion of an invoiced amount shall be resolved in accordance with Section 6.1 below. If
the 28th calendar day does not fall on a Business Day, WPX will pay invoiced amounts on the next
Business Day. Payments for amounts past due shall bear interest calculated on a per annum basis
from the due date to the date of actual payment at a fluctuating interest rate equal at all times
to the prime rate of interest published from time to time in The Wall Street Journal plus 2%, but
in no case higher than the maximum rate permitted by law. WPX shall make payments under this
Agreement by electronic funds transfer in accordance with payment instructions provided by WMB from
time to time.

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ARTICLE V

WMB SUBCONTRACTORS AND PERSONNEL

     Section 5.1 Subcontractors. WMB shall have the right to use Subcontractors to provide, or assist
the WMB Entities in the provision of, the Services. WMB will be responsible for the Services
performed by itself and the other WMB Entities, and responsible for the Services performed by
Subcontractors to the extent that WMB has contractual remedies pursuant to the applicable
subcontractor agreement. In the event any such Subcontractor fails to meet expected levels of
quality or timeliness with respect to the Services, WMB will be WPX’s sole point of contact
regarding such Services.

     Section 5.2 Compliance. WMB shall cause its and the other WMB Entities’ employees, agents and
Subcontractors, while at WPX Facilities, to (a) comply with reasonable personnel, operational,
safety and security procedures, policies, rules and regulations applicable to WPX Personnel and the
WPX Facilities provided in advance to WMB from time to time, and (b) comply with reasonable
requests of WPX Personnel pertaining to personal and professional conduct. WPX shall have the
right to require WMB to remove any employee, agent or Subcontractor of the WMB Entities from a WPX
Facility in an emergency or potential emergency situation arising from any failure to comply with
this provision. In any other situation in which any employee, agent or Subcontractor of the WMB
fails to comply with this provision, WMB shall consult with WPX and take appropriate action to
remedy such failure, including removal of such employee, agent or Subcontractor from the WPX
Facilities. Notwithstanding the foregoing, WMB retains the sole right to hire and fire its
employees, and to manage contractual relationships with its agents and Subcontractors.

ARTICLE VI

TRANSITION SERVICES MANAGEMENT

     Section 6.1 Transition Services Management Process. Each party will appoint an individual who
will serve as its Transition Services Manager, and the names of such appointed individuals shall be
set forth in Schedule C. The parties, including their respective Transition Services
Managers, shall conduct meetings and manage interactions in accordance with Schedule C.
The Transition Services Managers shall meet as expeditiously as possible to resolve any dispute
hereunder. Any dispute that is not resolved by the Transition Services Managers within 45 days
shall be resolved in accordance with the dispute resolution procedures set forth in Article IX of
the Separation Agreement.

     Section 6.2 Books and Records; Audit. In addition to the rights and obligations of the parties in
Article V of the Separation Agreement, WMB shall keep books of account and other records, in
reasonable detail and in accordance with GAAP, consistently applied, for any charges for which WPX
is required to reimburse WMB and for any charges which are priced on an consumption (e.g., hourly)
basis pursuant to this Agreement. Such books of account and other records shall be open for WPX’s
inspection during normal business hours for 24 months following the end of the calendar year in
which the expense was incurred or the applicable Services were rendered to enable WPX to verify
that the charges comply with the terms of this Agreement; provided, however, that any such
inspection or

9

 

audit may be performed only by an independent third party auditing firm of national standing
that has been informed of the confidential nature of such information and that has entered into a
written confidentiality agreement with WMB requiring it to treat such information confidentially.
In no event will WPX or such independent auditing firm have access to any information regarding the
WMB Entities’ cost of performing the Services.

     Section 6.3 Audit Rights for Intellectual Property. In addition to the rights and obligations of
the parties in Article V of the Separation Agreement, where the WMB Entities have given any one or
more of the WPX Entities access to Intellectual Property in connection with the Services, WPX will
provide to WMB or, at WMB’s request, to the third party licensors of such Intellectual Property or
an independent auditor, access at reasonable hours to WPX Personnel, WPX Facilities, WPX records
and other pertinent information, as WMB or such third party licensor or independent auditor may
reasonably request, to verify that the use of the Intellectual Property meets applicable licensing
requirements. If any such audit or inspection results in a discovery that the WPX Entities have
failed to comply with any WMB or third party contract limitations or requirements of which WPX has
been given notice, WPX shall be responsible for any costs associated with remedying such failure,
including without limitation the purchase of additional licenses.

ARTICLE VII

FACILITIES AND SYSTEMS

     Section 7.1 WPX Facilities.

          (a) General. Subject to Section 7.1(b) and Article XII, the WMB
Entities will provide the Services to the WPX Entities only at the locations for which such
Services are provided as of the date immediately prior to the Distribution Date or, with respect to
any particular Services, such other locations as may be specifically identified in Schedule
A. The WPX Entities will provide to the WMB Entities, at the WPX Facilities and at no charge,
the space, office furnishings, janitorial service, telephone service, utilities (including air
conditioning) and office-related equipment, supplies, and duplicating services that the WMB
Entities may reasonably need to provide the Services. WMB Personnel will have reasonable access to
the WPX Facilities 24 hours a day, 7 days a week; provided, however, that in times of emergency,
turnaround or significant maintenance or construction activity, access may be restricted or denied
if required in connection with such emergency, turnaround, maintenance or construction. In such an
event, the WMB Entities shall be excused from performing the Services to the extent affected by
such restricted access.

          (b) Relocation. WPX shall promptly notify WMB of any contemplated or planned
alteration or relocation of any WPX Facility that could reasonably be expected to impact the
Services (including any impact on any WMB Entity’s cost to perform, timing or ability to perform),
and will promptly review such contemplated or planned alteration or relocation with WMB. WPX’s
notice to WMB must be sufficiently in advance of any such alteration or relocation to allow a
reasonable amount of time for the parties, but in no event less than 90 days prior to such
alteration or relocation, to (i) agree on any changes to the Services that may be required as a
result of the alteration or relocation and the corresponding changes to the Charges, and (ii)
prepare for and

10

 

implement the agreed upon changes to the Services. WMB’s obligation to proceed with the
planning for providing Services to a relocated WPX Facility will depend upon WMB’s confirmation (in
its sole discretion) that it can perform Services for the new location. For the avoidance of
doubt, if the parties cannot agree on changes to the Services and Charges as described in this
Section 7.1(b), then the WMB Entities shall not be obligated to provide any (y) new or
additional Services, or (z) existing Services to new or additional WPX Facilities.

     Section 7.2 WMB Facilities and WMB Systems.

          (a) WMB Facilities. The WMB Entities may perform the Services in WMB Facilities as
WMB reasonably deems appropriate. While at WMB Facilities, WPX Personnel shall comply with the WMB
Entities’ reasonable safety and security requirements and other relevant policies.

          (b) Access to the WMB Systems. WPX will, and will require that all WPX Personnel who
have access to any WMB Systems to, limit their access to those portions of such systems for which
they are authorized in connection with their receipt and use of the Services. WPX will (i) limit
such access to those WPX Personnel who are authorized to use the Services, (ii) upon WMB’s request,
provide to WMB a written list of the names of all of the WPX Personnel who have been granted such
access, and (iii) adhere to the applicable WMB Entities’ (or any applicable Subcontractors’)
security rules and procedures for use of WMB Systems and other computer or electronic data storage
systems. All user identification numbers and passwords disclosed to any WPX Entity to permit WPX
Personnel to access the WMB Systems will be deemed to be, and will be treated as, “Information” for
purposes of Article V of the Separation Agreement (relating to Exchange of Information;
Confidentiality). WPX will cooperate with WMB in the investigation of any apparent unauthorized
access by WPX Personnel to the WMB Systems. If any WPX Personnel’s access to the WMB Systems and
other computer or electronic data storage systems could technically enable such personnel to obtain
access to systems or data which they are not authorized to access, WMB may require such personnel
to execute agreements or otherwise confirm their agreement to comply with the limits of their
authorization as a condition of their right to obtain such access.

     Section 7.3 Physical Security for Facilities. WMB (or any applicable Subcontractor) will be
responsible for all security procedures at the WMB Facilities. WPX will be responsible for all
security procedures at the WPX Facilities.

ARTICLE VIII

TECHNOLOGY AND PROPRIETARY RIGHTS

     Section 8.1 Related Agreements.

          (a) Ownership of Intellectual Property. Except as expressly provided in Section
8.2, nothing in this Agreement shall grant or transfer any rights, title or interests in any
Intellectual Property invented or created before or after the Distribution Date by or on behalf of
any WMB Entity or otherwise controlled by or licensed to any WMB Entity.

11

 

          (b) Development of Intellectual Property. Subject to Articles IX of this
Agreement and Article V of the Separation Agreement (relating to Exchange of Information;
Confidentiality), as between the parties, all Intellectual Property provided, developed or acquired
by or for any WMB Entity in connection with providing the Services shall be owned by such WMB
Entity.

     Section 8.2 Limited License to Use WMB Work Processes and Software. WMB grants to WPX a limited,
non-exclusive, non-assignable license to use the work processes and Software owned by the WMB
Entities that are provided to the WPX Entities in connection with the Services solely to the extent
necessary for the WPX Entities to receive Services and execute its responsibilities under this
Agreement. THE WMB ENTITIES’ WORK PROCESSES AND SOFTWARE ARE PROVIDED TO THE WPX ENTITIES ON AN
AS-IS BASIS. EACH WMB ENTITY EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, AS TO SUCH WORK PROCESSES AND SOFTWARE.

     Section 8.3 No Implied Licenses. Except as expressly specified in this Agreement, nothing in this
Agreement will be deemed to grant to any WPX Entity, by implication, estoppel or otherwise, license
rights, ownership rights or any other Intellectual Property Rights in any technology, work
processes or Software owned by any WMB Entity. However, nothing in this Section 8.3 is
intended to alter the terms of any grant of any rights, title or interests in any Intellectual
Property from WMB to WPX pursuant to the Separation Agreement.

     Section 8.4 Managed WPX Contracts. To the extent there are any Managed WPX Contracts, WMB will be
responsible for: (a) notifying WPX of any performance obligations; (b) communicating directly with
the third parties with respect to their performance obligations under such Managed WPX Contracts;
and (c) providing WPX timely notice of any renewal, termination or cancellation dates and charges
in respect of such Managed WPX Contracts.

ARTICLE IX

DATA SECURITY

     Section 9.1 Ownership. As between WPX and WMB, WPX owns and will continue to own all right, title
and interest in and to all WPX Data. For the avoidance of doubt, WMB retains ownership of data
pertaining to its performance of the Services, including data pertaining to the volume and quality
of the Services.

     Section 9.2 Data Security. WPX may establish backup security for data and keep backup data files
in its possession if it so chooses, but WMB will have access to the backup data files as WMB
reasonably needs to provide the Services.

ARTICLE X

REPRESENTATIONS AND WARRANTIES

     Section 10.1 Service Warranty. WMB warrants to WPX that it will use, and will cause the other WMB
Entities to use, the same level of care in providing the Services as

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WMB and the other WMB Entities use for themselves and in no event less than a reasonable level
of care.

     Section 10.2 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE X, NEITHER THE WMB
ENTITIES NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES MAKE OR HAVE MADE ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE SERVICES, INCLUDING WITH
RESPECT TO (A) MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR USE OR PURPOSE, (B) THE USE OF THE
SERVICE BY ANY WPX ENTITY AFTER THE RECEIPT THEREOF, OR (C) THE PROBABLE SUCCESS OR PROFITABILITY
OF ANY WPX BUSINESS AFTER THE RECEIPT OF THE SERVICES.

ARTICLE XI

INSURANCE

     Section 11.1 Coverage. At all times during the Term and in addition to the rights and obligations
of the parties in Article VII of the Separation Agreement, both parties shall (or shall cause their
respective Affiliates to) procure and maintain, at their own expense and for their own benefit:

          (a) Commercial General Liability insurance with a combined single limit of $1,000,000 each
occurrence for bodily injury and property damage;

          (b) Comprehensive Automobile Liability insurance covering owned, hired and non-owned vehicles
with minimum limit of $1,000,000 per occurrence for bodily injury and property damage combined; and

          (c) Workers’ Compensation insurance complying with the laws of the states or states having
jurisdiction over each employee and Employer’s Liability insurance with minimum limit of $1,000,000
per occurrence.

For the policies described in (a) and (b) above, and to the extent of the indemnifications herein,
each party shall name the other party as an additional insured. The insurance provided to the
additional insured party shall be primary.

     Section 11.2 Subrogation. For all policies listed in Section 11.1, and to the extent of
the indemnifications herein, each party will agree to waive all rights of subrogation they may have
against the other party.

     Section 11.3 Certificates of Insurance. Upon request, each party shall furnish the other with a
certificate(s) of insurance evidencing the above coverages. Such insurance may be cancelled or
materially altered only after 30 days advance written notice is given to the other party.

     Section 11.4 Risk of Loss. Each party shall be responsible for the risk of loss of, or damage to,
such party’s own property when situated on the other party’s site, regardless

13

 

of cause. The risk of loss of, or damage to, property in transit will remain with the party
arranging the shipment.

ARTICLE XII

TERMINATION

     Section 12.1 Early Termination of the Services. Except as specifically provided in a Statement of
Work for Services related to PeopleSoft application development and maintenance, either party may,
in its sole discretion, terminate any Functional Service Area by providing 60 days prior written
notice to the other party, provided that WPX’s right to terminate Services shall not in any event
entitle any WPX Entity or any third party to use the WMB Systems or any Intellectual Property owned
or licensed by any WMB Entity and supplied to the WPX Entities under this Agreement after the
termination date, nor shall it entitle any WPX Entity or third party to, or require any WMB Entity
to disclose, any of WMB’s Information. The Charges shall be equitably adjusted for any Functional
Service Area terminated under this Section 12.1.

     Section 12.2 WMB’s Right to Terminate for Compliance Issues. WMB shall have the right to
immediately terminate the provisions of any Services if, and to the extent, WMB determines that it
must do so because (a) the provision of such Services would cause WMB to violate applicable law or
(b) a change in WPX’s or any other WPX Entity’s method of doing business creates a conflict of
interest for any WMB Entity.

     Section 12.3 Survival. In addition to the rights and obligations of Section 8.2 of the Separation
Agreement (which is hereby incorporated into this Agreement), the parties further agree that upon
termination of this Agreement, all rights and obligations of the parties under this Agreement shall
cease except for (a) obligations that expressly survive termination of this Agreement and (b)
liabilities and obligations that have accrued prior to such termination, including the obligation
to pay any Charges or other amounts accrued, even if such Charges or amounts have not become due
and payable prior to termination.

     Section 12.4 Effect of Termination. Within 90 days after the termination or expiration of this
Agreement, WMB shall deliver a final invoice to WPX invoicing all amounts accrued for Services and
work performed prior to termination that have not already been paid. WPX shall pay such amount to
WMB within 30 days of its receipt of such final invoice.

ARTICLE XIII

GENERAL PROVISIONS

     Section 13.1 Limitation of Liability; Indemnification.

          (a) Notwithstanding (i) WMB’s agreement to perform, or cause to be performed, the Services in
accordance with the provisions hereof, or (ii) any term or provision of the Schedules to the
contrary, WPX acknowledges that performance by the WMB Entities of the Services pursuant to this
Agreement will not subject any WMB Entity, its Affiliates, or their respective stockholders,
directors, officers, members, agents or employees to any Liability whatsoever, except as directly
caused by the gross

14

 

negligence or willful misconduct on the part of such WMB Entity or such other Persons;
provided, however, that WMB’s Liability as a result of such gross negligence or willful misconduct
will be limited to an amount not to exceed the lesser of (A) WPX’s price paid for the particular
Service, (B) WPX’s cost of performing the Service itself during the remainder of the Term or (C)
WPX’s cost of obtaining the Service from a third party during the remainder of the Term; provided
further that the WPX will (and will cause the other WPX Entities to) exercise its and their
commercially reasonable efforts to minimize the cost of any such alternatives to the Services by
selecting the most cost effective alternatives which provide the functional equivalent of the
Services replaced.

          (b) Except as specifically set forth in this Agreement, WPX hereby releases, and agrees to
indemnify and hold harmless, each WMB Entity, its Affiliates and their respective stockholders,
directors, officers, members, agents or employees from any and all Liabilities arising from or
relating to the provision or use of any Service or product provided hereunder to the extent not
directly caused by the gross negligence or willful misconduct of such WMB Entity or such other
Persons.

     Section 13.2 Compliance With Laws. WPX will be solely responsible for (a) compliance with all Laws
affecting the WPX Business and (b) any use the WPX Entities may make of the Services to assist it
in complying with such Laws.Further Action. The parties shall use their reasonable best
efforts to take, or cause to be taken, all appropriate action to do, or cause to be done, all
things necessary, proper or advisable under applicable law, and to execute and deliver such
documents and other papers, as may be required to carry out the provisions of this Agreement and to
consummate and make effective the transactions contemplated by this Agreement.Expenses.
Except as otherwise specified in this Agreement, all costs and expenses, including fees and
disbursements of counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be borne by the party incurring
such costs and expenses.Authorization. WPX appoints the WMB Entities, their officers,
employees and agents, or any of them, as agents for the WPX Entities to take all actions necessary
or appropriate to perform the Services. To the extent the parties remain part of a consolidated
group as determined by GAAP, WPX and WMB agree that, in connection with the provision of Services,
any officer of WMB is authorized to take any action on behalf of any WPX Entity under the same
authorities and limitations that would apply to his or her actions as an officer of WMB based upon
the WMB Delegation of Authority policy or similar document then in force and effect at WMB; WPX
shall, and shall cause the other WPX Entities to, execute such other instruments and take such
further action as may be required in order to effectuate the foregoing authorization. WPX
expressly waives, on its own behalf and on behalf of the other WPX Entities, any defense of lack of
authorization that might asserted against WMB or any third party as to any transaction entered into
on behalf of any WPX Entity by the WMB Entities, or any of their officers, employees or agents
under the terms of this Section 13.5.Assignment. This Agreement may not be
assigned by operation of law or otherwise by WPX without the express written consent of WMB (which
consent may be granted or withheld in the sole discretion of WMB), and any attempted assignment
without such consent shall be null and void.

15

 

     Section 13.7 Force Majeure.

          (a) If a Force Majeure Event is claimed by either party, the party making such claim shall
orally notify the other party as soon as reasonably possible after the occurrence of such Force
Majeure Event and, in addition, shall provide the other party with written notice of such Force
Majeure Event within five days after the occurrence of such Force Majeure Event.

          (b) Except for a party’s obligations to make payments hereunder (including, but not limited
to, those obligations under Article IV), neither party will be liable for any
nonperformance or delay in performance of the terms of this Agreement when such failure is due to a
Force Majeure Event. If either party relies on the occurrence of a Force Majeure Event as a basis
for being excused from performance of its obligations hereunder, such party relying on the Force
Majeure Event shall (i) provide an estimate of the expected duration of the Force Majeure Event and
its probable impact on performance of such party’s obligations hereunder and (ii) provide prompt
notice to the other party of the cessation of the Force Majeure Event.

          (c) Upon the occurrence of a Force Majeure Event, the same will, so far as possible, be
remedied as expeditiously as possible using commercially reasonable efforts. It is understood and
agreed that nothing in this Section 13.7(c) shall require the settlement of strikes,
lockouts or labor disputes by acceding to the demands of any opposing party therein when such
course is inadvisable in the discretion of the party having the difficulty.

     Section 13.8 Acknowledgment. The parties acknowledge that the terms and conditions of this
Agreement have been the subject of active and complete negotiations, and that this Agreement shall
be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring either party by virtue of the authorship of any provision of this
Agreement.

     Section 13.9 Order of Precedence. In the event of a conflict between Articles I through
XIII of this Agreement and the Schedules hereto, Articles I through XIII of
this Agreement shall take precedence over the Schedules.

     Section 13.10 References. References to any Schedule includes all subparts, schedules, exhibits,
attachments, appendices and annexes to such Schedule. For example, a reference to Schedule
A-1 will be deemed to reference any attachments to such Schedule, and references to
Schedule A will be deemed to include Schedules A-1 through A-10 and their
respective subparts, schedules, exhibits, attachments, appendices and annexes.

     Section 13.11 Incorporation of Separation Agreement Provisions. The following provisions of the
Separation Agreement are hereby incorporated herein by reference, and
unless otherwise expressly specified herein, such provisions shall apply as if fully set forth
herein (references in this Section 13.12 to an “Article” or “Section” shall mean Articles
or Sections of the Separation Agreement, and references in the material incorporated herein by
reference shall be references to the Separation Agreement): Article V (relating to Exchange of
Information; Confidentiality), Article VII (relating to Mutual Releases; Indemnification); and
Article X (Miscellaneous) (excluding Sections 10.3 (Expenses) and 10.12 (Assignment)). In
the event of any conflict or inconsistency between any of the

16

 

foregoing provisions of the
Separation Agreement and any provision of this Agreement, this Agreement shall prevail with respect
to matters governed by this Agreement.

[The remainder of this page is intentionally left blank.]

17

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the date first set forth above.

	 	 	 	 	 
	 	THE WILLIAMS COMPANIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	WPX ENERGY, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page to Transition Services Agreement]

 

 

Schedule A-1

Payroll and Human Resources Administration

Payroll, recruiting, staffing, and human resources administration and other related services
as described behind this page or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-1 to Transition Services Agreement]

 

 

Schedule A-2

Information Technology

Infrastructure, security, application support, end user and other information
technology-related services as described behind this page or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-2 to Transition Services Agreement]

 

 

Schedule A-3

Finance and Accounting, Cash Management and Treasury

Finance, accounting, cash management, treasury, credit, accounts payable and accounts
receivable and related services as described behind this page or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-3 to Transition Services Agreement]

 

 

Schedule A-4

Tax Services

Tax-related services as described behind this page or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-4 to Transition Services Agreement]

 

 

Schedule A-5

Enterprise Business Services

General business services, sourcing and procurement and related services as described behind this
page or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-5 to Transition Services Agreement]

 

 

Schedule A-6

Internal Audit Services

Internal audit and related services as described behind this page or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-6 to Transition Services Agreement]

 

 

Schedule A-7

Corporate Communications and Investor Relations

Corporate communications, investor relations and related services as described behind this page  or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-7 to Transition Services Agreement]

 

 

Schedule A-8

Legal, Regulatory, Government Affairs and Records Management

Government affairs, regulatory services, records management and legal-related administrative
services as described behind this page  or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-8 to Transition Services Agreement]

 

 

Schedule A-9

Real Estate and Facilities Management

Real estate and facilities management and related services as described behind this page or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-9 to Transition Services Agreement]

 

 

Schedule A-10

Insurance and Claims Administration

Insurance, claims administration and related services as described behind this page or as may be subsequently agreed by the parties hereto in a writing signed by each party’s Transition Services Manager.

[Schedule A-10 to Transition Services Agreement]

 

 

Schedule B

Managed WPX Contracts

None.

[Schedule B to Transition Services Agreement]

 

 

Schedule C

Service Management Model

The WMB and WPX Transition Service Managers will be identified in the notices provided pursuant to
 this Agreement.

The Transition Service Managers will meet weekly, or as otherwise required, at a time and location
to be agreed between the Transition Service Managers. Either Party may call an extraordinary
meeting of the Transition Service Managers on giving two (2) business days prior written notice
where there are circumstances which the notifying Party reasonably considers exceptional. Any such
notice will specify the reasons and background to the calling of an extraordinary meeting.

Any issues that cannot be resolved by the Transition Service Managers will be escalated according
to the dispute resolution process identified in Article IX of the Separation Agreement.

[Schedule C to Transition Services Agreement]

 

 

Schedule D

List of Supported Facilities

WPX offices located at the following addresses:

One Williams Center

Tulsa, OK 74172

1001 17th Street Suite 1200,

Denver, CO 80202

[Schedule D to Transition Services Agreement]

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