Document:

exv10w16

Exhibit 10.16

AMENDMENT TO

THE WILLIAMS COMPANIES, INC. 2007 EMPLOYEE STOCK PURCHASE 

PLAN

     WHEREAS, The Williams Companies, Inc. (the “Company”) maintains The Williams Companies, Inc.
2007 Employee Stock Purchase Plan, effective as of May 17, 2007, as subsequently amended (the
“Plan”); and

     WHEREAS, in accordance with the terms of the Plan the Compensation Committee may designate the
Designated Subsidiaries that may participate in the Plan; and make certain other Plan amendments

     WHEREAS, at its September 18, 2007 meeting, consistent with the changes below, the
Compensation Committee adopted the following changes to the Plan;

     NOW THEREFORE, the Plan is hereby amended as follows effective as provided herein:

I.

     Section 6(a) of the Plan is amended in its entirety to provide as follows:

     “6. Method of Payment of Contributions.

          (a) Subject to the limitations set forth in Section 3(b), a participant shall elect at the
time and manner prescribed by the Designated Broker to have payroll deductions made on each payday
during the Offering Period in an dollar amount of not less than $10.00 but not to exceed $576 per
payday (or such greater amount as the Compensation Committee may establish from time to time before
an Offering Date) of such participant’s Compensation on each payday during the Offering Period;
provided further that once such election has been made and the Offering Period begins, the
participant may not increase such election amount during such Offering Period and may decrease such
election amount only as detailed in Section 6(b) or elsewhere in this Plan. All payroll deductions
made by a participant shall be credited to his or her account under the Plan. A participant may
not make any additional payments into such account. Further, the maximum payroll deductions that
a participant may elect per Offering Period shall not exceed $7,500 (provided that in the first
offering period from October 1, 2007 through December 31, 2007, the maximum payroll deductions that
a participant may elect per Offering Period shall not exceed $3,456) and the maximum payroll
deductions that a participant may elect for any calendar year shall not exceed $15,000 (or, subject
to the limitations set forth in Section 3(b), such greater amount as the Compensation Committee may
establish from time to time before an Offering Date). Finally, subject to the preceding sentence
and to the limitations set forth in Section 3(b), a participant (i) who has elected to participate
in the Plan pursuant to this Section 6(a) for an Offering Period and (ii) who takes no action to
change or revoke such election, for the next following

 

 

Offering Period and/or for any subsequent
Offering Period prior to the Offering Date for any such respective Offering Period shall be deemed
to have made the same election, including the same attendant payroll deduction authorization, for
such next following and/or subsequent Offering Periods as was in effect immediately prior to such
respective Offering Date; provided further that any participant who has elected to participate in
the Plan for the first Offering Period who takes no action to change or revoke such election,
for the next following Offering Period and/or for any subsequent Offering Period prior to the
Offering Date for any such respective Offering Period shall be deemed to have made the same payroll
deduction authorization for such next following and/or subsequent Offering Periods as was in effect
immediately prior to such respective Offering Date.

II.

     Effective September 18, 2007, Appendix A of the Plan is amended in its entirety to provide as
follows:

“APPENDIX A-DESIGNATED SUBSIDIARIES

The Williams Companies, Inc.

Cardinal Operating Company

Gas Supply, L.L.C.

Williams Express, Inc.

Williams Alaska Petroleum, Inc.

Williams Natural Gas Liquids, Inc.

Marsh Resources, Inc.

Northwest Pipeline Services LLC

Pine Needle Operating Company

TouchStar Technologies L.L.C.

Transco Energy Company

Transco Services LLC

WFS – Liquids Company

WFS – Pipeline Company

Williams Gulf Coast Gathering Company, LLC

Williams Field Services Company, LLC

Williams Production Company, LLC

Williams Energy Services, LLC

Williams Field Services Group, LLC

Williams One-Call Services, Inc.

Williams Headquarters Building Company

Williams Relocation Management, Inc.

Williams Acquisition Holding Company, Inc.

Williams Wireless, Inc.

Williams Information Technology, Inc.

Williams Petroleum Services, LLC

 

 

FT&T

Williams Power Company, Inc.

Williams International Company

Williams Refining & Marketing LLC

Williams Midstream Natural Gas Liquids, Inc.

Williams Exploration Company

Williams Gas Pipeline Company, LLC

MAPCO Inc.

Williams WPC-I, Inc.

Williams WPC-II, Inc.”

III.

     Except as modified herein, the Plan shall remain in full force and effect.exv10w17

Exhibit 10.17

AMENDMENT TO

THE WILLIAMS COMPANIES, INC. 2007 EMPLOYEE STOCK PURCHASE 

PLAN

     WHEREAS, The Williams Companies, Inc. (the “Company”) maintains The Williams Companies, Inc.
2007 Employee Stock Purchase Plan, effective as of May 17, 2007, as subsequently amended (the
“Plan”); and

     WHEREAS, in accordance with the terms of the Plan the Compensation Committee may designate the
Designated Subsidiaries that may participate in the Plan; and make certain other Plan amendments

     WHEREAS, at its January _21st___, 2009 meeting, consistent with the changes below, the
Compensation Committee adopted the following changes to the Plan;

     NOW THEREFORE, the Plan is hereby amended as follows effective as provided herein:

I.

     Effective January 1, 2009, Appendix A of the Plan is amended in its entirety to provide as
follows:

“APPENDIX A-DESIGNATED SUBSIDIARIES

The Williams Companies, Inc.

Cardinal Operating Company (known as Cardinal Operating Company, LLC effective December 31, 2008)

Gas Supply, L.L.C.

Williams Express, Inc.

Williams Alaska Petroleum, Inc.

Williams Natural Gas Liquids, Inc.

Marsh Resources, Inc. (known as Marsh Resources, LLC effective December 31, 2008)

Northwest Pipeline Services LLC

Pine Needle Operating Company (known as Pine Needle Operating Company, LLC effective December 31, 2008)

TouchStar Technologies L.L.C.

Transcontinental Gas Pipe Line Corporation (known as Transcontinental Gas Pipe Line Company, LLC effective December 31, 2008)

Transco Energy Company (known as Transco Energy Company, LLC effective December 30, 2008)

Transco Services LLC

WFS – Liquids Company

WFS – Pipeline Company

 

 

Williams Gulf Coast Gathering Company, LLC

Williams Field Services Company, LLC

Williams Production Company, LLC

Williams Energy Services, LLC

Williams Field Services Group, LLC

Williams One-Call Services, Inc.

Williams Headquarters Building Company

Williams Relocation Management, Inc.

Williams Acquisition Holding Company, Inc.

Williams Wireless, Inc.

Williams Information Technology, Inc.

Williams Petroleum Services, LLC

FT&T, Inc.

Williams Power Company, Inc.

Williams International Company

Williams Refining & Marketing LLC

Williams Midstream Natural Gas Liquids, Inc.

Williams Exploration Company

Williams Gas Pipeline Company, LLC

MAPCO Inc.

Williams WPC-I, Inc.

Williams WPC-II, Inc.”

III.

     Except as modified herein, the Plan shall remain in full force and effect.exv10w18

Exhibit 10.18

The Williams Companies, Inc.

Amended And Restated

Change In Control Severance Agreement

(Tier One Executives)

 

 

The Williams Companies, Inc.

Amended And Restated

Change in Control Severance Agreement

(Tier One Executives)

Table of Contents

	 	 	 	 	 
	Article I  Definitions
	 	 	1	 
	 
	 	 	 	 
	1.1 Accrued Annual Bonus
	 	 	1	 
	1.2 Accrued Base Salary
	 	 	1	 
	1.3 Accrued Obligations
	 	 	2	 
	1.4 Affiliate
	 	 	2	 
	1.5 Agreement Date
	 	 	2	 
	1.6 Agreement Term
	 	 	2	 
	1.7 Annual Bonus
	 	 	2	 
	1.8 Article
	 	 	2	 
	1.9 Base Salary
	 	 	2	 
	1.10 Beneficial Owner
	 	 	3	 
	1.11 Beneficiary
	 	 	3	 
	1.12 Board
	 	 	3	 
	1.13 Cause
	 	 	3	 
	1.14 Cause Determination
	 	 	4	 
	1.15 Change Date
	 	 	4	 
	1.16 Change in Control
	 	 	4	 
	1.17 Code
	 	 	5	 
	1.18 Competitive Business
	 	 	5	 
	1.19 Confidential Information
	 	 	5	 
	1.20 Consummation Date
	 	 	6	 
	1.21 Disability
	 	 	6	 
	1.22 Disqualifying Disaggregation
	 	 	6	 
	1.23 Employer
	 	 	6	 
	1.24 ERISA
	 	 	7	 
	1.25 Exchange Act
	 	 	7	 
	1.26 Good Reason
	 	 	7	 
	1.27 Gross-Up Payment
	 	 	8	 
	1.28 including
	 	 	8	 
	1.29 IRS
	 	 	8	 
	1.30 Legal and Other Expenses
	 	 	8	 
	1.31 Notice of Consideration
	 	 	8	 
	1.32 Notice of Termination
	 	 	8	 
	1.33 Person
	 	 	8	 
	1.34 Post-Change Period
	 	 	8	 
	1.35 Potential Parachute Payment
	 	 	8	 
	1.36 Pro-rata Annual Bonus
	 	 	8	 

i

 

	 	 	 	 	 
	1.37 Reorganization Transaction
	 	 	9	 
	1.38 Restricted Shares
	 	 	9	 
	1.39 SEC
	 	 	9	 
	1.40 Section
	 	 	9	 
	1.41 Separation from Service
	 	 	9	 
	1.42 Stock Options
	 	 	9	 
	1.43 Subsidiary
	 	 	10	 
	1.44 Surviving Corporation
	 	 	10	 
	1.45 Target Annual Bonus
	 	 	10	 
	1.46 Taxes
	 	 	10	 
	1.47 Termination Date
	 	 	10	 
	1.48 Voting Securities
	 	 	10	 
	1.49 Williams
	 	 	11	 
	1.50 Williams Incumbent Directors
	 	 	11	 
	1.51 Williams Parties
	 	 	11	 
	1.52 Work Product
	 	 	11	 
	 
	 	 	 	 
	Article II  Williams’ Obligations Upon Separation from Service
	 	 	11	 
	 
	 	 	 	 
	2.1 If By Executive for Good Reason or By an
Employer Other Than for Cause, Disability or
Disqualifying Disaggregation
	 	 	11	 
	2.2 If by the Employer for Cause
	 	 	13	 
	2.3 If by an Executive Other Than for Good Reason
	 	 	14	 
	2.4 If by Death or Disability
	 	 	14	 
	2.5 Waiver and Release
	 	 	15	 
	2.6 Breach of Covenants
	 	 	15	 
	 
	 	 	 	 
	Article III  Certain Additional Payments by Williams
	 	 	15	 
	 
	 	 	 	 
	3.1 Gross-Up Payment
	 	 	15	 
	3.2 Gross-Up Payment
	 	 	16	 
	3.3 Limitations on Gross-Up Payments
	 	 	16	 
	3.4 Additional Gross-up Amounts
	 	 	16	 
	3.5 Amount Increased or Contested
	 	 	17	 
	3.6 Refunds
	 	 	19	 
	 
	 	 	 	 
	Article IV Expenses and Interest
	 	 	19	 
	 
	 	 	 	 
	4.1 Legal and Other Expenses
	 	 	19	 
	4.2 Interest
	 	 	20	 
	 
	 	 	 	 
	Article V  No Set-off or Mitigation
	 	 	20	 
	 
	 	 	 	 
	5.1 No Set-off by Williams
	 	 	20	 
	5.2 No Mitigation
	 	 	20	 
	 
	 	 	 	 
	Article VI  Restrictive Covenants
	 	 	21	 
	 
	 	 	 	 
	6.1 Confidential Information
	 	 	21	 
	6.2 Non-Competition
	 	 	21	 

ii

 

	 	 	 	 	 
	6.3 Non-Solicitation
	 	 	22	 
	6.4 Intellectual Property
	 	 	22	 
	6.5 Non-Disparagement
	 	 	23	 
	6.6 Reasonableness of Restrictive Covenants
	 	 	24	 
	6.7 Right to Injunction: Survival of Undertakings
	 	 	24	 
	 
	 	 	 	 
	Article VII  Non-Exclusivity of Rights
	 	 	25	 
	 
	 	 	 	 
	7.1 Waiver of Certain Other Rights
	 	 	25	 
	7.2 Other Rights
	 	 	25	 
	7.3 No Right to Continued Employment
	 	 	25	 
	 
	 	 	 	 
	Article VIII  Claims Procedure
	 	 	26	 

	 	 	 	 	 
	8.1 Filing a Claim
	 	 	26	 
	8.2 Review of Claim Denial
	 	 	26	 
	 
	 	 	 	 
	Article IX  Miscellaneous
	 	 	26	 
	 
	 	 	 	 
	9.1 No Assignability
	 	 	26	 
	9.2 Successors
	 	 	27	 
	9.3 Payments to Beneficiary
	 	 	27	 
	9.4 Non-Alienation of Benefits
	 	 	27	 
	9.5 Severability
	 	 	27	 
	9.6 Amendments
	 	 	27	 
	9.7 Notices
	 	 	28	 
	9.8 Joint and Several Liability
	 	 	28	 
	9.9 Counterparts
	 	 	28	 
	9.10 Governing Law
	 	 	28	 
	9.11 Captions
	 	 	28	 
	9.12 Rules of Construction
	 	 	28	 
	9.13 Number and Gender
	 	 	28	 
	9.14 Tax Withholding
	 	 	28	 
	9.15 No Rights Prior to Change Date
	 	 	29	 
	9.16 Entire Agreement
	 	 	29	 

iii

 

The Williams Companies, Inc.

Amended And Restated Change-In-Control Severance Agreement

     THIS AMENDED AND RESTATED AGREEMENT dated as of                     , 200___ (the “Agreement
Date”) is made by and between The Williams Companies, Inc., a corporation incorporated under
the laws of the State of Delaware (“Williams”, together with its subsidiaries, affiliates
and successors thereto ) and [INSERT EXECUTIVE NAME] (“Executive”).

RECITALS

     The Board of Directors of Williams (the “Board”) has determined that it is in the best
interests of Williams and its shareholders to encourage and motivate the Executive to devote his
full attention to the performance of his assigned duties without the distraction of concerns
regarding his involuntary or constructive termination of employment due to a Change in Control of
Williams. The Executive is employed by Williams or a Subsidiary and may from time to time be
employed by one or more Subsidiaries. Williams and its Subsidiaries believe that it is in the best
interest of the Executive, their customers, the communities they serve, and the stockholders of
Williams to provide financial assistance through severance payments and other benefits to Executive
if Executive is involuntarily or constructively terminated upon or within a certain period after a
Change in Control. This Agreement is intended to accomplish these objectives.

     This Agreement supersedes and replaces all other written or oral exchanges, agreements,
understandings, or arrangements between or among Executive and Williams and/or the Subsidiary
entered into prior to the date hereof and relating to severance or benefits in relation to a Change
in Control, including, but not limited to The Williams Companies, Inc. Change in Control Severance
Protection Plan as effective January 1, 1990 and amended and restated June 1, 1999 and the
Change-in-Control Severance Agreement dated as of [INSERT DATE OF PRIOR AGREEMENT] by and between
Williams and the Executive, but excluding The Williams Companies Retirement Restoration Plan and
any agreements and plans awarding Stock Options and Restricted Shares. Each superseded agreement
or understanding is void and of no further force and effect.

Article I.

Definitions

     As used in this Agreement, the terms specified below shall have the following meanings:

     1.1 “Accrued Annual Bonus” means the amount of any Annual Bonus earned but not yet
paid as of the Termination Date, other than amounts Executive has elected to defer.

     1.2 “Accrued Base Salary” means the amount of Executive’s Base Salary that is accrued
but not yet paid as of the Termination Date, other than amounts Executive has elected to defer.

1

 

     1.3 “Accrued Obligations” means, as of the Termination Date, the sum of Executive’s
Accrued Base Salary, Accrued Annual Bonus, any accrued but unpaid Paid Time Off under Williams’
Paid Time Off Program, and any other amounts and benefits which are then due to be paid or provided
to Executive by Williams, but have not yet been paid or provided (as applicable), provided no
payments will be accelerated if such acceleration would violate Code Section 409A.

     1.4 “Affiliate” means any Person (including a Subsidiary) that directly or indirectly,
through one or more intermediaries, controls, or is controlled by or is under common control with
Williams. For purposes of this definition the term “control” with respect to any Person means the
power to direct or cause the direction of management or policies of such Person, directly or
indirectly, whether through the ownership of Voting Securities, by contract or otherwise.

     1.5 “Agreement Date” — see the introductory paragraph of this Agreement.

     1.6 “Agreement Term” means the period commencing on the Agreement Date and ending on
the second anniversary of the Agreement Date or, if later, such later date to which the Agreement
Term is extended under the following sentence, unless earlier terminated as provided herein.
Commencing on the first anniversary of the Agreement Date, the Agreement Term shall automatically
be extended each day by one day to create a new two-year term until, at any time after the first
anniversary of the Agreement Date, Williams delivers written notice (an “Expiration
Notice”) to Executive that the Agreement shall expire on a date specified in the Expiration
Notice (the “Expiration Date”) that is not less than 12 months after the date the
Expiration Notice is delivered to Executive; provided, however, that if a Change Date occurs before
the Expiration Date specified in the Expiration Notice, then such Expiration Notice shall be void
and of no further effect. Notwithstanding anything herein to the contrary, with respect to a
Post-Change Period, the Agreement Term shall end at the end of the Severance Period (as defined in
Section 2.1(c)) if applicable, or if there is no such Severance Period, the earliest of the
following: (a) the second anniversary of the Change Date, or (b) the Termination Date; provided
that (i) the obligations, if any, of Williams to make payments under this Agreement due to a
Separation from Service which occurred during the Agreement Term shall continue beyond the
Agreement Term until all such obligations are fully satisfied, and (ii) the obligations of
Executive under this Agreement shall continue beyond the Agreement Term until all such obligations
are fully satisfied. Notwithstanding anything herein to the contrary, the Agreement shall
automatically terminate upon the occurrence of a Disqualifying Disaggregation pursuant to Section
1.22(a).

     1.7 “Annual Bonus” means the opportunity to receive payment of a cash annual
incentive.

     1.8 “Article” means an article of this Agreement.

     1.9 “Base Salary” means annual base salary in effect on the Termination Date,
disregarding any reduction that would qualify as Good Reason.

2

 

     1.10 “Beneficial Owner” means such term as defined in Rule 13d-3 of the SEC under the
Exchange Act.

     1.11 “Beneficiary” — see Section 9.3.

     1.12 “Board” means the Board of Directors of Williams or, from and after the Change
Date that gives rise to a Surviving Corporation other than Williams, the Board of Directors of such
Surviving Corporation.

     1.13 “Cause” means any one or more of the following:

     (a) Executive’s conviction of or plea of nolo contendere to a felony or other crime
involving fraud, dishonesty or moral turpitude;

     (b) Executive’s willful or reckless material misconduct in the performance of his
duties which results in an adverse effect on Williams, the Subsidiary or an Affiliate;

     (c) Executive’s willful or reckless violation or disregard of the code of business
conduct;

     (d) Executive’s material willful or reckless violation or disregard of a Williams or
Subsidiary policy; or

     (e) Executive’s habitual or gross neglect of duties;

provided, however, that for purposes of clauses (b) and (e), Cause shall not include any one or
more of the following:

     (i) bad judgment or negligence, other than Executive’s habitual neglect of
duties or gross negligence;

     (ii) any act or omission believed by Executive in good faith, after reasonable
investigation, to have been in or not opposed to the interest of Williams, the
Subsidiary or an Affiliate (without intent of Executive to gain, directly or
indirectly, a profit to which Executive was not legally entitled);

     (iii) any act or omission with respect to which a determination could properly
have been made by the Board that Executive had satisfied the applicable standard of
conduct for indemnification or reimbursement under Williams’ by-laws, any applicable
indemnification agreement, or applicable law, in each case as in effect at the time
of such act or omission; or

     (iv) during a Post-Change Period, failure to meet performance goals, objectives
or measures following good faith efforts to meet such goals, objectives or measures;
and

further provided that, for purposes of clauses (b) through (e) if an act, or a failure to act,
which was done, or omitted to be done, by Executive in good faith and with a reasonable belief,
after

3

 

reasonable investigation, that Executive’s act, or failure to act, was in the best interests of
Williams, the Subsidiary or an Affiliate or was required by applicable law or administrative
regulation, such breach shall not constitute Cause if, within 10 business days after Executive is
given written notice of such breach that specifically refers to this Section, Executive cures such
breach to the fullest extent that it is curable. With respect to the above definition of “cause”,
no act or conduct by Executive will constitute “cause” if Executive acted: (i) in accordance with
the instructions or advice of counsel representing Williams or there was a conflict such that
Executive could not consult with counsel representing Williams other qualified counsel, or (ii) as
required by legal process.

     1.14 “Cause Determination” —see Section 2.2(b)(iv)

     1.15 “Change Date” means the date on which a Change in Control first occurs during the
Agreement Term.

     1.16 “Change in Control” means, except as otherwise provided below, the occurrence of
any one or more of the following during the Agreement Term:

     (a) any person (as such term is used in Rule 13d-5 of the SEC under the Exchange Act)
or group (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act),
other than an Affiliate of Williams or any employee benefit plan (or any related trust)
sponsored or maintained by Williams or any of its Affiliates (a “Related Party”),
becomes the Beneficial Owner of 20% or more of the common stock of Williams or of Voting
Securities representing 20% or more of the combined voting power of all Voting Securities of
Williams, except that no Change in Control shall be deemed to have occurred solely by reason
of such beneficial ownership by a Person (a “Similarly Owned Company”) with respect
to which both more than 75% of the common stock of such Person and Voting Securities
representing more than 75% of the combined voting power of the Voting Securities of such
Person are then owned, directly or indirectly, by the persons who were the direct or
indirect owners of the common stock and Voting Securities of Williams immediately before
such acquisition, in substantially the same proportions as their ownership, immediately
before such acquisition, of the common stock and Voting Securities of Williams, as the case
may be; or

     (b) Williams Incumbent Directors (determined using the Agreement Date as the baseline
date) cease for any reason to constitute at least a majority of the directors of Williams
then serving; or

     (c) consummation of a merger, reorganization, recapitalization, consolidation, or
similar transaction (any of the foregoing, a “Reorganization Transaction”), other
than a Reorganization Transaction that results in the Persons who were the direct or
indirect owners of the outstanding common stock and Voting Securities of Williams
immediately before such Reorganization Transaction becoming, immediately after the
consummation of such Reorganization Transaction, the direct or indirect owners, of both at
least 65% of the then-outstanding common stock of the Surviving Corporation and Voting
Securities representing at least 65% of the combined voting power of the then-outstanding
Voting Securities of the Surviving Corporation, in substantially the same respective
proportions

4

 

as such Persons’ ownership of the common stock and Voting Securities of Williams
immediately before such Reorganization Transaction; or

     (d) approval by the stockholders of Williams of a plan or agreement for the sale or
other disposition of all or substantially all of the consolidated assets of Williams or a
plan of complete liquidation of Williams, other than any such transaction that would result
in (i) a Related Party owning or acquiring more than 50% of the assets owned by Williams
immediately prior to the transaction or (ii) the Persons who were the direct or indirect
owners of the outstanding common stock and Voting Securities of Williams immediately before
such transaction becoming, immediately after the consummation of such transaction, the
direct or indirect owners, of more than 50% of the assets owned by Williams immediately
prior to the transaction.

Notwithstanding the occurrence of any of the foregoing events, a Change in Control shall not occur
with respect to Executive if, in advance of such event, Executive agrees in writing that such event
shall not constitute a Change in Control. Upon the Board’s determination that a sale or other
disposition of all or substantially all of the consolidated assets of Williams or a plan of
complete liquidation of Williams that was approved by stockholders, as described in Section
1.16(d), will not occur, a Change in Control shall be deemed not to have occurred from such date of
determination forward, and this Agreement shall continue in effect as if no Change in Control had
occurred except to the extent termination requiring payments under this Agreement occurs prior to
such Board determination.

     1.17 “Code” means the Internal Revenue Code of 1986, as amended.

     1.18 “Competitive Business” means, as of any date, any energy business and any
individual or entity (and any branch, office, or operation thereof) which engages in, or proposes
to engage in (with Executive’s assistance) any of the following in which the Executive has been
engaged in the twelve (12) months preceding the Termination Date (i) the harnessing, production,
transmission, distribution, marketing or sale of oil, gas or other energy product or the
transmission or distribution thereof through pipelines, wire or cable or similar medium (ii) any
other business actively engaged in by Williams which represents for any calendar year or is
projected by Williams (as reflected in a business plan adopted by Williams before Executive’s
Termination Date) to yield during any year during the first three-fiscal year period commencing on
or after Executive’s Termination Date, more than 5% of the gross revenue of Williams, and, in
either case, which is located (x) anywhere in the United States, or (y) anywhere outside of the
United States where Williams is then engaged in, or proposes as of the Termination Date to engage
in to the knowledge of the Executive, any of such activities.

     1.19 “Confidential Information” means any non-public information of any kind or nature
in the possession of Williams or any of its Affiliates, including without limitation, ideas,
processes, methods, designs, innovations, devices, inventions, discoveries, know-how, data,
techniques, models, customer lists, marketing, business or strategic plans, financial information,
research and development information, trade secrets or other subject matter relating to Williams’
or its Affiliates’ products, services, businesses, operations, employees, customers or suppliers,
whether in tangible or intangible form, including (i) any information that gives Williams or any of
its Affiliates a competitive advantage in the harnessing, production, transmission, distribution,

5

 

marketing or sale of oil, gas or other energy or the transmission or distribution thereof
through pipelines, wire or cable or similar medium or in the energy services or energy trading
industry and other businesses in which Williams or an Affiliate is engaged, or (ii) any information
obtained by Williams or any of its Affiliates from third parties to which Williams or an Affiliate
owes a duty of confidentiality, or (iii) any information that was learned, discovered, developed,
conceived, originated or prepared during or as a result of Executive’s performance of any services
on behalf of Williams or any Affiliate. Notwithstanding the foregoing, “Confidential Information”
shall not include: (i) information that is or becomes generally known to the public through no
fault of Executive; (ii) information obtained on a non-confidential basis from a third party other
than Williams or any Affiliate, which third party disclosed such information without breaching any
legal, contractual or fiduciary obligation; or (iii) information approved for release by written
authorization of Williams.

     1.20 “Consummation Date” means the date on which a Reorganization transaction is
consummated.

     1.21 “Disability” means any medically determinable physical or mental impairment of
Executive where he or she (a) is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than twelve (12) months, or (b) is,
by reason of any medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less than three (3) months under
an accident and health plan covering employees of Executive’s employer. Notwithstanding the
forgoing, all determinations of whether an Executive is Disabled shall be made in accordance with
Section 409A of the Code.

     1.22 “Disqualifying Disaggregation” means

     (a) The cessation of Executive’s employment with Williams and/or its Affiliates prior
to the Change Date for any reason, including but not limited to a cessation of employment
with Williams and/or its Affiliates which is effected by a sale, spin-off, or other
disaggregation (“Disaggregation”) by Williams or an Affiliate of the business unit
(including, but not limited to, a sale, spin-off or other disaggregation of a Subsidiary)
which employed Executive immediately prior to such Disaggregation; or

     (b) The cessation of Executive’s employment with Williams and/or its Affiliates during
the Post-Change Period due to a Disaggregation solely where Executive is employed by the
successor in substantially the same position as the position held prior to the
Disaggregation, provided the successor assumes all of Williams’ obligations under this
Agreement.

     1.23 “Employer” means Williams or, if Executive is not employed directly by Williams,
the Subsidiary that from time to time employs Executive on or after the Agreement Date, and the
successor of either (provided, in the case of a Subsidiary, that such successor is also a
Subsidiary).

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

     1.25 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     1.26 “Good Reason” means a Separation from Service by Executive in accordance with the
substantive and procedural provisions of this Section.

     (a) Separation from Service by Executive for “Good Reason” means a Separation from
Service initiated by Executive on account of any one or more of the following actions or
omissions that, unless otherwise specified, occurs during a Post-Change Period:

     (i) a material adverse reduction in the nature or scope of Executive’s office,
position, duties, functions, responsibilities or authority (including reporting
responsibilities and authority) during a Post-Change Period from the most
significant of those held, exercised and assigned at any time during the 90-day
period immediately before the Change Date;

     (ii) any reduction in or failure to pay Executive’s annual Base Salary at an
annual rate not less than 12 times the highest monthly base salary paid or payable
to Executive by his Employer in respect of the 12-month period immediately before
the Change Date;

     (iii) any reduction in the Target Annual Bonus which Executive may earn
determined as of the Change Date or failure to pay Executive’s Annual Bonus on terms
substantially equivalent to those provided to peer executives of the Employer;

     (iv) a material reduction of Executive’s aggregate compensation and/or
aggregate benefits from the amounts and/or levels in effect on the Change Date,
unless such reduction is part of a policy applicable to peer executives of the
Employer and of any successor entity;

     (v) required relocation during a Post-Change Period of more than 50 miles of
(A) Executive’s workplace, or (B) the principal offices of the Employer or its
successor (if such offices are Executive’s workplace), in each case without the
consent of Executive; provided, however, in both cases of (A) and (B) of this
subsection (v), such new location is farther from Executive’s residence than the
prior location;

     (vi) the failure at any time of a successor to Executive’s Employer explicitly
to assume and agree to be bound by this Agreement; or

     (vii) the giving of a Notice of Consideration pursuant to Section 2.2(b)(ii)
and the subsequent failure to terminate Executive for Cause and within a period of
90 days thereafter in compliance with all of the substantive and procedural
requirements of Section 2.2.

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     (b) Notwithstanding anything in this Agreement to the contrary, no act or omission
shall constitute grounds for “Good Reason”:

     (i) Unless Executive gives a Notice of Termination to Williams and the Employer
30 days prior to his intent to terminate his employment for Good Reason which
describes the alleged act or omission giving rise to Good Reason; and

     (ii) Unless such Notice of Termination is given within 90 days of Executive’s
first actual knowledge of such act or omission; and

     (iii) Unless Williams or the Employer fails to cure such act or omission within
the 30 day period after receiving the Notice of Termination.

     (c) No act or omission shall constitute grounds for “Good Reason”, if Executive has
consented in writing to such act or omission in a document that makes specific reference to
this Section.

     1.27 “Gross-Up Payment”  — see Section 3.1.

     1.28 “including” means including without limitation.

     1.29 “IRS” means the Internal Revenue Service of the United States of America.

     1.30 “Legal and Other Expenses” — see Section 4.1.

     1.31 “Notice of Consideration” — see Section 2.2(b)(ii).

     1.32 “Notice of Termination” means a written notice of a Separation from Service, if
applicable, given in accordance with Section 9.7 that sets forth (a) the specific termination
provision in this Agreement relied on by the party giving such notice, (b) in reasonable detail the
specific facts and circumstances claimed to provide a basis for such Separation from Service, and
(c) if the Termination Date is other than the date of receipt of such Notice of Termination, the
Termination Date.

     1.33 “Person” means any individual, sole proprietorship, partnership, joint venture,
limited liability company, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government instrumentality, division, agency,
body or department.

     1.34 “Post-Change Period” means the period commencing on the Change Date and ending on
the earlier of the Termination Date or the second anniversary of the Change Date.

     1.35 “Potential Parachute Payment” — see Section 3.1.

     1.36 “Pro-rata Annual Bonus” means, in respect of an Employer’s fiscal year during
which the Termination Date occurs, an amount equal to the product of Executive’s Target Annual
Bonus (determined as of the Termination Date) multiplied by a fraction, the numerator of

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which equals the number of days from and including the first day of such fiscal year through
and including the Termination Date, and the denominator of which equals 365.

     1.37 “Reorganization Transaction” — see clause (c) of the definition of “Change in
Control”.

     1.38 “Restricted Shares” means shares of restricted stock, restricted stock units,
deferred stock or similar awards.

     1.39 “SEC” means the United States Securities and Exchange Commission.

     1.40 “Section” means, unless the context otherwise requires, a section of this
Agreement.

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

     1.42 “Stock Options” means stock options, stock appreciation rights or similar awards.

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     1.43 “Subsidiary” means a corporation, trade or business, if it and The Williams
Companies, Inc. are members of a controlled group of corporations as defined in Code Section 414(b)
or under common control as defined under Code Section 414(c); the standard of control under Code
Sections 414(b) and 414(c) shall be deemed to be “at least 80%” and all determinations shall be
made in accordance with Code Section 409A and the applicable guidance thereunder.

     1.44 “Surviving Corporation” means the parent corporation resulting from a
Reorganization Transaction or, if securities representing at least 50% of the aggregate voting
power of all Voting Securities of a corporation effected by a Change in Control which is not a
Reorganization Transaction are directly or indirectly owned by another corporation, such other
corporation.

     1.45 “Target Annual Bonus” means, as of any date, the amount equal to the product of
Executive’s Base Salary determined as of such date multiplied by the percentage of such Base Salary
to which Executive would have been entitled immediately prior to such date under any Annual Bonus
arrangement for the fiscal year for which the Annual Bonus is awarded if the performance goals
established pursuant to such Annual Bonus were achieved at the 100% level as of the end of the
fiscal year; provided, however, that if Executive’s Annual Bonus is discretionary and no 100%
target level is formally established either under the Annual Bonus arrangement or otherwise,
Executive’s “Target Annual Bonus” shall mean the amount equal to the 100% of Executive’s Base
Salary.

     1.46 “Taxes” means federal, state, local and other income, employment and other taxes.

     1.47 “Termination Date” means the date of the receipt of the Notice of Termination by
Executive (if such notice is given by Executive’s Employer) or by Executive’s Employer (if such
notice is given by Executive), or any later date, not more than 30 days after the giving of such
notice, specified in such notice; provided, however, that:

     (a) Executive’s employment is terminated by reason of death or Disability, the
Termination Date shall be the date of Executive’s death or the date of deemed termination of
employment due to Disability, as applicable, regardless of whether a Notice of Termination
has been given; and

     (b) if no Notice of Termination is given, the Termination Date shall be the last date
on which Executive is employed by an Employer; and

     (c) for purposes of Article VI (Restrictive Covenants) if the Executive does not have a
Separation from Service, the Termination Date shall be the later of the date the entity that
employs Executive ceases to be a Subsidiary, or, after a Disaggregation (as defined in
Section 1.22), the date Executive’s employment with the successor business unit terminates,
whether such termination is initiated by such successor or by Executive.

     1.48 “Voting Securities” of a corporation means securities of such corporation that
are entitled to vote generally in the election of directors of such corporation.

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     1.49 “Williams” — see the introductory paragraph of this Agreement.

     1.50 “Williams Incumbent Directors” means, determined as of any date by reference to
any baseline date:

     (a) the members of the Board on the date of such determination who have been members of
the Board since such baseline date, and

     (b) the members of the Board on the date of such determination who were appointed or
elected after such baseline date and whose election, or nomination for election by
stockholders of Williams or the Surviving Corporation, as applicable, was approved by a vote
or written consent of two-thirds of the directors comprising the Williams Incumbent
Directors on the date of such vote or written consent, but excluding each such member whose
initial assumption of office was in connection with (i) an actual or threatened election
contest, including a consent solicitation, relating to the election or removal of one or
more members of the Board, (ii) a “tender offer” (as such term is used in Section 14(d) of
the Exchange Act), or (iii) a proposed Reorganization Transaction.

     1.51 “Williams Parties” means Williams and Executive’s Employer.

     1.52 “Work Product” means any and all work product, including, but not limited to,
documentation, tools, templates, processes, procedures, discoveries, inventions, innovations,
technical data, concepts, know-how, methodologies, methods, drawings, prototypes, trade secrets,
notebooks, reports, findings, business plans, recommendations and memoranda of every description,
that Executive makes, conceives, discovers or develops alone or with others during the course of
Executive’s employment with Williams or during the one year period following Executive’s
Termination Date (whether or not protectable upon application by copyright, patent, trademark,
trade secret or other proprietary rights).

Article II.

Williams’ Obligations Upon Separation from Service

     2.1 If By Executive for Good Reason or By an Employer Other Than for Cause, Disability,
Death or Disqualifying Disaggregation. If Executive has a Separation from Service for Good
Reason or there is an Employer-initiated Separation from Service of the Executive for any reason
other than Cause, Disability, Death or a Disqualifying Disaggregation during the Post-Change
Period, then in addition to payment of all Accrued Obligations, which shall be payable no later
than ten (10) business days after the Termination Date, Williams’ and the Employer’s sole
obligations to Executive under this Article II shall be as follows:

     (a) Severance Payments. Executive shall be paid a lump-sum cash amount equal
to the sum of the following, on the first business day following six (6) months after
Executive’s Separation from Service:

     (i) Prorated Annual Bonus for Year of Termination. Executive’s
Pro-rata Annual Bonus reduced (but not below zero) by the amount of any Annual

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Bonus paid to Executive with respect to the Employer’s fiscal year during which
the Termination Date occurs;

     (ii) Retirement Enhancements. The sum of:

     (A) an amount equal to the sum of the value of the unvested portion of
Executive’s accounts or accrued benefits under any defined contribution plan
qualified under Section 401(a) of the Code maintained by the Williams
Parties as of the Termination Date and forfeited by Executive due to
Separation from Service; and

     (B) an amount equal to three (3) times the total of the allocations
made by Williams for Executive under The Williams Companies Retirement
Restoration Plan (or any successor plan) during the calendar year preceding
the calendar year in which the Change Date occurs.

     (iii) Multiple of Salary and Bonus. An amount equal to three (3) times
the sum of (A) Base Salary plus (B) the Target Annual Bonus, each determined as of
the Termination Date; provided, however, that any reduction in Executive’s Base
Salary or Target Annual Bonus that would qualify as Good Reason shall be disregarded
for this purpose.

     (b) Stock Incentive Awards. To the extent provided in the applicable award
agreements and the applicable plan, all of Executive’s Stock Options then outstanding shall
immediately become fully vested and remain exercisable until the 18-month anniversary of the
Termination Date (or such later date as may be set forth in the applicable award agreement,
including, but not limited to, a later exercise date under an award agreement if Executive
has met the age and service requirements for retirement) or, if earlier, the option
expiration date for any such Stock Option. All of Executive’s Restricted Shares then
outstanding shall only vest and payout in accordance with the applicable award agreements
for such Restricted Shares.

     (c) Continuation of Welfare Benefits. During the lesser of the period during
which Executive or a qualifying beneficiary (as defined in Section 607 of the Employee
Retirement Income Security Act of 1974, as amended) has in effect an election for
post-termination continuation coverage or conversion rights to welfare benefits under
applicable law, including Section 4980 of the Code (“COBRA”), or the period ending on the
18-month anniversary of the Termination Date (“Severance Period”), Executive (or, if
applicable, the qualifying beneficiary) shall be entitled to such coverage at an
out-of-pocket premium cost that does not exceed the out-of-pocket premium cost applicable to
similarly situated active employees (and their eligible dependents); provided, however, that
if Executive is eligible to retiree benefits provided under any welfare benefit plan,
program, policy, practice or procedure of the Williams Parties, Executive shall be entitled
to receive such retiree benefits in lieu of the COBRA coverage provided by this Section
2.1(c).

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     (d) Outplacement. Executive shall be reimbursed for reasonable fees and costs
for outplacement services incurred by Executive within six (6) months after the Separation
from Service, promptly upon presentation of reasonable documentation of such fees and costs,
subject to a maximum of $25,000. All requests of Executive for reimbursement must be
submitted to Williams within one (1) year of Separation from Service and Williams shall make
the reimbursement of reasonable requests no later than thirty (30) days after such request,
but in all events within fifteen (15) months of Separation from Service.

     (e) Indemnification. Executive shall be indemnified and held harmless by
Williams and the Employer on the same terms as other peer executives and to the greatest
extent permitted under applicable law as the same now exists or may hereafter be amended and
the Employer’s and Williams’ by-laws as such exist on the Agreement Date, or such greater
rights that may be provided by amendment to such by-laws from time to time, if Executive
was, is, or is threatened to be, made a party to any pending, completed or threatened
action, suit, arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding whether civil, criminal, administrative or
investigative, and whether formal or informal, by reason of the fact that Executive is or
was, or had agreed to become, a director, officer, employee, agent or fiduciary of the
Employer or any other entity which Executive is or was serving at the request of the
Employer or Williams (“Proceeding”), against all expenses (including reasonable attorneys’
fees) and all claims, damages, liabilities and losses incurred or suffered by Executive or
to which Executive may become subject for any reason, and (ii) shall be entitled to
advancement of any such indemnifiable expenses in accordance with the Employer’s and
Williams’ by-laws as such exist on the Agreement Date, or such greater rights that may be
provided by amendment to such by-laws from time to time. A Proceeding shall not include any
proceeding to the extent it concerns or relates to a matter described in Section 4.1
(concerning reimbursement of certain costs and expenses).

     (f) Directors’ and Officers’ Liability Insurance. For a period of six years
after the Termination Date (or for any known longer applicable statute of limitations
period), the Executive shall be entitled to coverage under a directors’ and officers’
liability insurance policy in an amount no less than, and on the same terms as those
provided to peer executive officers and directors of the Employer.

     2.2 If by the Employer for Cause.

     (a) Termination for Cause. If the Executive has a Separation from Service for
Cause during the Post-Change Period, the Williams Parties’ sole obligation to Executive
under this Article II shall be to pay Executive a lump-sum cash amount equal to all Accrued
Obligations determined as of the Termination Date.

     (b) Change in Control: Procedural Requirements for Termination for Cause. For
any Separation from Service for Cause during any part of a Post-Change Period, the Williams
Parties shall strictly observe each of the following substantive and procedural provisions:

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     (i) The Board shall call a meeting for the stated purpose of determining
whether Executive’s acts or omissions satisfy the requirements of the definition of
“Cause” and, if so, whether to terminate Executive’s employment for Cause.

     (ii) Not less than 15 days prior to the date of such meeting, the Board shall
provide or cause to be provided Executive and each member of the Board written
notice (a “Notice of Consideration”) of (A) a detailed description of the
acts or omissions alleged to constitute Cause, (B) the date of such meeting of the
Board, and (C) Executive’s rights under clauses (iii) and (iv) below.

     (iii) Executive shall have the opportunity to appear before the Board in person
and, at Executive’s option, with legal counsel, and/or present to the Board a
written response to the Notice of Consideration.

     (iv) Executive’s employment may be terminated for Cause only if (A) the acts or
omissions specified in the Notice of Consideration did in fact occur and such
actions or omissions do constitute Cause as defined in this Agreement, (B) the
Board, by affirmative vote of at least 662/3 of its members (excluding Executive’s
vote), makes a specific determination to such effect and to the effect that
Executive’s employment should be terminated for Cause (“Cause
Determination”), and (C) Williams thereafter provides Executive with a Notice of
Termination that specifies in specific detail the basis of such Separation from
Service for Cause and which Notice shall be consistent with the reasons set forth in
the Notice of Consideration.

Nothing in this Section 2.2(b) shall preclude the Board, by majority vote, from
suspending Executive from his duties, with pay, at any time.

     (c) Change in Control: Standard of Review. In the event that the existence of
Cause during a Post-Change Period shall become an issue in any action or proceeding between
Executive, on the one hand, and any one or more of the Williams Parties on the other hand,
the Williams Parties, as applicable, shall, notwithstanding the Cause Determination, have
the burden of establishing that the actions or omissions specified in the Notice of
Consideration did in fact occur and do constitute Cause and that the Williams Parties have
satisfied all applicable substantive and procedural requirements of this Section.

     2.3 If by Executive Other Than for Good Reason. If Executive has a Separation from
Service initiated by the Executive during the Post-Change Period other than for Good Reason,
Disability or death, the sole obligation of the Williams Parties to Executive under this Article II
shall be to pay Executive a lump-sum cash amount equal to all Accrued Obligations determined as of
the Termination Date.

     2.4 If by Death or Disability. If Executive dies during the Post-Change Period or if
Executive has a Separation from Service during the Post-Change Period by reason of Executive’s
Disability, the Williams Parties’ sole obligation to Executive under this Article II shall be to
pay

14

 

Executive a lump-sum cash amount equal to all Accrued Obligations determined as of the
Termination Date.

     2.5 Waiver and Release. Notwithstanding anything herein to the contrary, in the event
that Executive’s employment terminates pursuant to Section 2.1, no Williams Party shall have any
obligation to Executive under Section 2.1(a) Sections 2.1(c)-(f) and Article III unless and until
Executive executes and delivers to Williams within sixty (60) days after Separation from Service a
release and waiver of Williams, the Employer and Affiliates, in substantially the same form as
attached hereto as Exhibit A, or as otherwise mutually acceptable.

     2.6 Breach of Covenants. If a court determines that Executive has breached any
non-competition, non-solicitation, non-disparagement, confidential information or intellectual
property covenant entered into at any time between Executive (on the one hand) and Williams, the
Employer, or any Affiliate (on the other hand), including the Restrictive Covenants in Article VI,
(a) no Williams Party shall have any obligation to pay or provide any severance or benefits under
Articles II and/or III, (b) all of Executive’s unexercised Stock Options shall terminate as of the
date of the breach, (c) all of Executive’s Restricted Stock shall be forfeited as of the date of
the breach, (d) Executive shall reimburse a Williams Party for any amount already paid under
Articles II and/or III, and (e) Executive shall repay to Williams an amount equal to the aggregate
“spread” (as defined below) on all Stock Options exercised in the one year period prior to the
first date on which Executive breached any such covenant (“Breach Date”). For purposes of this
Section 2.6, “spread” in respect of any Stock Option shall mean the product of the number of shares
as to which such Stock Option has been exercised during the one year period prior to the Breach
Date multiplied by the difference between the closing price of the common stock on the exercise
date (or if the common stock did not trade on the New York Stock Exchange or other exchange, if
any, on which common stock had a higher trading volume at the time, on the exercise date, the most
recent date on which the common stock did so trade) and the exercise price of the Stock Options.

Article III.

Certain Additional Payments by Williams

     3.1 Gross-Up Payment. If at any time or from time to time, it shall be determined by
independent auditors selected by Williams that any payment or other benefit to Executive pursuant
to Article II of this Agreement or otherwise (“Potential Parachute Payment”) is or will
become subject to the excise tax imposed by Section 4999 of the Code or any similar tax payable
under any state, local, foreign or other law, but expressly excluding any income taxes and
penalties imposed pursuant to Section 409A of the Code (“Excise Taxes”), then the Employer
shall, pursuant to Section 3.2, pay or cause to be paid a tax gross-up payment (“Gross-Up
Payment”).

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     3.2 Gross-Up Payment. The Gross-Up Payment shall be an amount equal to the product of

     (a) The amount of the Excise Taxes,

     multiplied by

     (b) A fraction (the “Gross-Up Multiple”), the numerator of which is one (1.0),
and the denominator of which is one (1.0) minus the lesser of (i) the sum, expressed as a
decimal fraction, of the effective marginal rates of any Taxes and any Excise Taxes
applicable to the Gross-Up Payment or (ii) .80, it being intended that the Gross-Up Multiple
shall in no event exceed five (5.0). If different rates of tax are applicable to various
portions of a Gross-Up Payment, the weighted average of such rates shall be used.

The Gross-Up Payment is intended to compensate Executive for all Excise Taxes and any other Taxes
payable by Executive hereunder. The Employer shall pay, or cause to be paid, the Gross-Up Payment
to Executive within thirty (30) days of the calculation of such amount subject to six months’ delay
following Executive’s Separation from Service if such delay would be required by Code Section 409A,
in order to avoid adverse consequences under Code Section 409A, based upon the assumption that
Executive is a key employee as defined in Code Section 409A(a)(2)(B)(i). In all events, any
Gross-Up Payment shall be paid to Executive no later than the last day of the calendar year next
following the year in which the related taxes are remitted to the applicable taxing authority.

     3.3 Limitations on Gross-Up Payments. To the extent possible, any payments or other
benefits to Executive pursuant to Article II of the Agreement shall be allocated as consideration
for restrictive covenants applicable to Executive.

     3.4 Additional Gross-up Amounts. If, for any reason, the Employer’s independent
auditors later determine that the amount of Excise Taxes payable by Executive is greater than the
amount initially determined pursuant to Section 3.2, then the Employer shall, subject to Section
3.3 and 3.5, pay Executive, within thirty (30) days of such determination, or pay to the IRS as
required by applicable law, an amount (which shall also be deemed a Gross-Up Payment) equal to the
product of:

     (a) the sum of (i) such additional Excise Taxes and (ii) any interest, penalties,
expenses or other costs incurred by Executive as a result of having taken a position in
accordance with a determination made pursuant to Sections 3.2 or 3.5,

     multiplied by

     (b) the Gross-Up Multiple.

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     3.5 Amount Increased or Contested.

     (a) Executive shall notify all Williams Parties in writing (an “Executive’s
Notice”) of any claim by the IRS or other taxing authority (an “IRS Claim”)
that, if successful, would require the payment by Executive of Excise Taxes in respect of
Potential Parachute Payments in an amount in excess of the amount of such Excise Taxes
determined in accordance with Section 3.2. Executive’s Notice shall include the nature and
amount of such IRS Claim, the date on which such IRS Claim is due to be paid (the “IRS
Claim Deadline”), and a copy of all notices and other documents or correspondence
received by Executive in respect of such IRS Claim. Executive shall give Executive’s Notice
as soon as practicable, but no later than the earlier of (i) 10 days after Executive first
obtains actual knowledge of such IRS Claim or (ii) five business days before the IRS Claim
Deadline; provided, however, that any failure to give Executive’s Notice shall affect the
Williams Parties’ obligations under this Article only to the extent that a Williams Party is
actually prejudiced by such failure. If at least one business day before the IRS Claim
Deadline the Employer shall:

     (i) deliver to Executive a written certificate from the Employer’s independent
auditors (“Company Certificate”) to the effect that, notwithstanding the IRS
Claim, the amount of Excise Taxes, interest or penalties payable by Executive is
either zero or an amount less than the amount specified in the IRS Claim,

     (ii) pay to Executive, or to the IRS as required by applicable law, an amount
(which shall also be deemed a Gross-Up Payment) equal to difference between the
product of (A) amount of Excise Taxes, interest and penalties specified in the
Company Certificate, if any, multiplied by (B) the Gross-Up Multiple, less the
portion of such product, if any, previously paid to Executive by the Employer, and

     (iii) direct Executive pursuant to Section 3.5(d) to contest the balance of the
IRS Claim,

then Executive shall pay only the amount, if any, of Excise Taxes, interest and penalties specified
in the Company Certificate. In no event shall Executive pay an IRS Claim earlier than 30 business
days after having given Executive’s Notice (or, if sooner, the IRS Claim Deadline).

     (b) At any time after the payment by Executive of any amount of Excise Taxes, other
Taxes or related interest or penalties in respect of Potential Parachute Payments (including
any such amount equal to or less than the amount of such Excise Taxes specified in any
Company Certificate, or IRS Claim), any Williams Party may in its discretion require
Executive to pursue a claim for a refund (a “Refund Claim”) of all or any portion of
such Excise Taxes, other Taxes, interest or penalties as may be specified by the Williams
Party in a written notice to Executive.

     (c) If a Williams Party notifies Executive in writing that a Williams Party desires
Executive to contest an IRS Claim or to pursue a Refund Claim, Executive shall:

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     (i) give the Williams Party all information that it reasonably requests in
writing from time to time relating to such IRS Claim or Refund Claim, as applicable,

     (ii) take such action in connection with such IRS Claim or Refund Claim (as
applicable) as the Williams Party reasonably requests in writing from time to time,
including accepting legal representation with respect thereto by an attorney
selected by the Williams Party, subject to the approval of Executive (which approval
shall not be unreasonably withheld or delayed),

     (iii) cooperate with the Williams Party in good faith to contest such IRS Claim
or pursue such Refund Claim, as applicable,

     (iv) permit the Williams Party to participate in any proceedings relating to
such IRS Claim or Refund Claim, as applicable, and

     (v) contest such IRS Claim or prosecute Refund Claim (as applicable) to a
determination before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Williams Party may from time to time
determine in its discretion.

The Williams Party shall control all proceedings in connection with such IRS Claim or Refund
Claim (as applicable) and in its discretion may cause Executive to pursue or forego any and
all administrative appeals, proceedings, hearings and conferences with the Internal Revenue
Service or other taxing authority in respect of such IRS Claim or Refund Claim (as
applicable); provided that (A) any extension of the statute of limitations relating to
payment of taxes for the taxable year of Executive relating to the IRS Claim is limited
solely to such IRS Claim, (B) the Williams Party’s control of the IRS Claim or Refund Claim
(as applicable) shall be limited to issues with respect to which a Gross-Up Payment would be
payable, and (C) Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or other taxing authority.

     (d) Any Williams Party may at any time in its discretion direct Executive to
(i) contest the IRS Claim in any lawful manner or (ii) pay the amount specified in an IRS
Claim and pursue a Refund Claim; provided, however, that if a Williams Party directs
Executive to pay an IRS Claim and pursue a Refund Claim, the Williams Party shall advance
the amount of such payment to Executive on an interest-free basis and shall indemnify
Executive, on an after-tax basis, for any Excise Tax or income tax, including related
interest or penalties, imposed with respect to such advance.

     (e) The Williams Party shall pay directly all legal, accounting and other costs and
expenses (including additional interest and penalties) incurred by the Williams Party or
Executive in connection with any IRS Claim or Refund Claim, as applicable, and shall
indemnify Executive, on an after-tax basis, for any Excise Tax or income tax, including
related interest and penalties, imposed as a result of such payment of costs and expenses.
Any payment or reimbursement of any expenses incurred by Executive in connection

18

 

with any IRS Claim or Refund Claim to which Executive may be entitled pursuant to this
Section 3.5 shall be paid or reimbursed as soon as practicable after presentation of
Executive’s written request for reimbursement accompanied by evidence that such costs or
expenses were incurred. In any event, any Gross-Up Payment will be made no later than the
last day of the calendar year next following the calendar year in which Executive remits the
related taxes, and any required reimbursement of expenses incurred due to a tax audit or
litigation addressing the existence or amount of a tax liability will be made by the end of
the calendar year next following the calendar year in which the taxes that are the subject
of the audit or litigation are remitted to the taxing authority, or where as a result of
such audit or litigation no taxes are remitted, the end of the calendar year next following
the calendar year in which such audit is completed or there is a final and nonappealable
settlement or other resolution of the litigation. Notwithstanding the foregoing, such
payments will be subject to six months’ delay following Executive’s Separation from Service
if such delay would be required by Code Section 409A, in order to avoid adverse consequences
under Code Section 409A, based upon the assumption that Executive is a key employee as
defined in Code Section 409A(a)(2)(B)(i).

     3.6 Refunds. If, after the receipt by Executive or the IRS of any payment or advance
of Excise Taxes or other Taxes by any Williams Party, Executive receives any refund with respect to
such Excise Taxes, Executive shall (subject to the Employer complying with any applicable
requirements of Section 3.5) promptly pay the Williams Party which paid the Gross-Up Payment the
amount of such refund (together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Executive of an amount advanced by any Williams Party pursuant
to Section 3.5 or receipt by the IRS of an amount paid by a Williams Party on behalf of Executive
pursuant to Section 3.5, a determination is made that Executive shall not be entitled to any refund
with respect to such claim and a Williams Party does not notify Executive in writing of its intent
to contest such determination within 30 days after the Williams Parties receive written notice of
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid. Any contest of a denial of refund shall be controlled by Section 3.5(d).

Article IV.

Expenses and Interest

     4.1 Legal and Other Expenses.

     (a) If Executive incurs legal fees or other expenses (including expert witness and
accounting fees) in an effort to determine, secure, preserve, establish entitlement to, or
obtain benefits under this Agreement (collectively, “Legal and Other Expenses”),
Executive shall, regardless of the outcome of such effort, be entitled to payment of or
reimbursement for such Legal and Other Expenses in accordance with Section 4.1(b).

     (b) All Legal and Other Expenses shall be paid or reimbursed on a monthly basis within
10 days after presentation of Executive’s written request for reimbursement accompanied by
evidence that such Legal and Other Expenses were incurred. In all

19

 

events, the Company shall pay or reimburse such eligible expenses in accordance with
the requirements of Treasury Regulation § 1.409A-3(i)(1)(iv) for reimbursement and in-kind
benefit plans, to the extent applicable. For this purpose, (i) any reimbursement shall be
for expenses incurred during Executive’s lifetime or within two additional years following
Executive’s death, (ii) the amount of expenses eligible for reimbursement, or benefits
provided, in one calendar year shall not affect the expenses eligible for reimbursement, or
benefits to be provided, in any other calendar year, (iii) the reimbursement of any eligible
expense will be made no later than the last day of the calendar year next following the
calendar year in which the expense was incurred, and (iv) the right to any reimbursement or
benefit shall not be subject to liquidation or exchange for any other benefit.

     (c) If Executive does not prevail (after exhaustion of all available judicial remedies)
in respect of a claim by Executive or by one or more of the Williams Parties, hereunder, and
such parties establish before a court of competent jurisdiction that Executive had no
reasonable basis for his claim hereunder, or for his response to such parties’ claim
hereunder, or acted in bad faith, no further payment of or reimbursement for Legal and Other
Expenses shall be due to Executive in respect of such claim and Executive shall refund any
amounts previously paid or reimbursed hereunder with respect to such claim.

     4.2 Interest. If an amount due is not paid to Executive under this Agreement within
five business days after such amount first became due and owing, interest shall accrue on such
amount from the date it became due and owing until the date of payment at a annual rate equal to
200 basis points above the base commercial lending rate published in The Wall Street Journal in
effect from time to time during the period of such nonpayment.

Article V.

No Set-off or Mitigation

     5.1 No Set-off by Williams. Executive’s right to receive when due the payments and
other benefits provided for under this Agreement is absolute, unconditional and subject to no
setoff, counterclaim, recoupment, or other claim, right or action that any Williams Party may have
against Executive or others, except as expressly provided in this Section. Notwithstanding the
prior sentence, any Williams Party shall have the right to deduct any amounts outstanding on any
loans or other extensions of credit to Executive from a Williams Party from Executive’s payments
and other benefits (if any) provided for under this Agreement. Time is of the essence in the
performance by the Williams Parties of their respective obligations under this Agreement.

     5.2 No Mitigation. Executive shall not have any duty to mitigate the amounts payable
by any Williams Party under this Agreement by seeking new employment or self-employment following
termination. Except as specifically otherwise provided in this Agreement, all amounts payable
pursuant to this Agreement shall be paid without reduction regardless of any amounts of salary,
compensation or other amounts which may be paid or payable to Executive as the result of
Executive’s employment by another employer or self-employment.

20

 

Article VI.

Restrictive Covenants

     6.1 Confidential Information. The Executive acknowledges that in the course of
performing services for Williams and its Affiliates, Executive may create (alone or with others),
learn of, have access to, or receive Confidential Information. The Executive recognizes that all
such Confidential Information is the sole and exclusive property of Williams and its Affiliates or
of third parties to which Williams or an Affiliate owes a duty of confidentiality, that it is
Williams’ policy to safeguard and keep confidential all such Confidential Information, and that
disclosure of Confidential Information to an unauthorized third party would cause irreparable
damage to Williams and its Affiliates. Executive agrees that, except as required by the duties of
Executive’s employment with Williams or any of its Affiliates and except in connection with
enforcing Executive’s rights under this Agreement or if compelled by a court or governmental
agency, in each case provided that prior written notice is given to Williams, Executive will not,
without the written consent of Williams, willfully disseminate or otherwise disclose, directly or
indirectly, any Confidential Information disclosed to Executive or otherwise obtained by Executive
during his employment with Williams or its Affiliates, and will take all necessary precautions to
prevent disclosure, to any unauthorized individual or entity (whether or not such individual or
entity is employed or engaged by, or is otherwise affiliated with, Williams or any Affiliate), and
will use the Confidential Information solely for the benefit of Williams and its Affiliates and
will not use the Confidential Information for the benefit of any other Person nor permit its use
for the benefit of Executive. These obligations shall continue during and after the termination of
Executive’s employment for any reason and for so long as the Confidential Information remains
Confidential Information.

     6.2 Non-Competition. During the period beginning on the Agreement Date and ending on
the first anniversary of the Termination Date, regardless of the reason for Executive’s Separation
from Service, Executive agrees that without the written consent of Williams Executive shall not at
any time, directly or indirectly, in any capacity:

     (a) engage or participate in, become employed by, serve as a director of, or render
advisory or consulting or other services in connection with, any Competitive Business;
provided, however, that after Executive’s Separation from Service, this Section 6.2 shall
not preclude Executive from (i) being an employee of, or consultant to, any business unit of
a Competitive Business if (A) such business unit does not qualify as a Competitive Business
in its own right and (B) Executive does not have any direct or indirect involvement in, or
responsibility for, any operations of such Competitive Business that cause it to qualify as
a Competitive Business, or (ii) with the approval of Williams, being a consultant to, an
advisor to, a director of, or an employee of a Competitive Business; or

     (b) make or retain any financial investment, whether in the form of equity or debt, or
own any interest, in any Competitive Business. Nothing in this subsection (b) shall,
however, restrict Executive from making an investment in any Competitive Business if such
investment does not (i) represent more than 1% of the aggregate market value of the
outstanding capital stock or debt (as applicable) of such Competitive

21

 

Business, (ii) give Executive any right or ability, directly or indirectly, to control
or influence the policy decisions or management of such Competitive Business, or (iii)
create a conflict of interest between Executive’s duties to Williams and its Affiliates or
under this Agreement and his interest in such investment.

     6.3 Non-Solicitation. During the period beginning on the Agreement Date and ending on
the first anniversary of the Termination Date, regardless of the reason for Executive’s Separation
from Service, Executive shall not, directly or indirectly:

     (a) other than in connection with the good-faith performance of his duties as an
officer of Williams or its Affiliates, cause or attempt to cause any employee, director or
consultant of Williams or an Affiliate to terminate his or her relationship with Williams or
an Affiliate;

     (b) employ, engage as a consultant or adviser, or solicit the employment or engagement
as a consultant or adviser, of any employee of Williams or an Affiliate (other than by
Williams or its Affiliates), or cause or attempt to cause any Person to do any of the
foregoing;

     (c) establish (or take preliminary steps to establish) a business with, or cause or
attempt to cause others to establish (or take preliminary steps to establish) a business
with, any employee of Williams or an Affiliate, if such business is or will be a Competitive
Business; or

     (d) interfere with the relationship of Williams or an Affiliate with, or endeavor to
entice away from Williams or an Affiliate, any Person who or which at any time during the
period commencing one year prior to the Termination Date was or is, to Executive’s
knowledge, a material customer or material supplier of, or maintained a material business
relationship with, Williams or an Affiliate.

     6.4 Intellectual Property.

     (a) During the period of Executive’s employment with Williams or any Affiliate, and
thereafter upon Williams’ request, regardless of the reason for Executive’s Separation from
Service, Executive shall disclose immediately to Williams all Work Product that:
(i) relates to the business of Williams or any Affiliate or any customer or supplier to
Williams or an Affiliate or any of the products or services being developed, manufactured,
sold or otherwise provided by Williams or an Affiliate or that may be used in relation
therewith; or (ii) results from tasks or projects assigned to Executive by Williams or an
Affiliate; or (iii) results from the use of the premises or personal property (whether
tangible or intangible) owned, leased or contracted for by Williams or an Affiliate.
Executive agrees that any Work Product shall be the property of Williams and, if subject to
copyright, shall be considered a “work made for hire” within the meaning of the Copyright
Act of 1976, as amended. If and to the extent that any such Work Product is not a “work
made for hire” within the meaning of the Copyright Act of 1976, as amended, Executive hereby
assigns, and agrees to assign, to Williams all right, title and interest in and to the Work
Product and all copies thereof, and all copyrights , patent

22

 

rights, trademark rights, trade secret rights and all other proprietary and
intellectual property rights in the Work Product, without further consideration, free from
any claim, lien for balance due, or rights of retention thereto on the part of Executive.

     (b) Notwithstanding the foregoing, Williams agrees and acknowledges that the provisions
of Section 6.4(a) relating to ownership and disclosure of Work Product do not apply to any
inventions or other subject matter for which no equipment, supplies, facility, or trade
secret information of Williams or an Affiliate was used and that are developed entirely on
Executive’s own time, unless: (i) the invention or other subject matter relates (a) to the
business of Williams or an Affiliate, or (b) to the actual or demonstrably anticipated
research or development of Williams or any Affiliate, or (ii) the invention or other subject
matter results from any work performed by Executive for Williams or any Affiliate.

     (c) Executive agrees that, upon disclosure of Work Product to Williams, Executive will,
during his employment by Williams or an Affiliate and at any time thereafter, at the request
and cost of Williams, execute all such documents and perform all such acts as Williams or an
Affiliate (or their respective duly authorized agents) may reasonably require: (i) to apply
for, obtain and vest in the name of Williams alone (unless Williams otherwise directs)
letters patent, copyrights or other intellectual property protection in any country
throughout the world, and when so obtained or vested to renew and restore the same; and
(ii) to prosecute or defend any opposition proceedings in respect of such applications and
any opposition proceedings or petitions or applications for revocation of such letters
patent, copyright or other intellectual property protection, or otherwise in respect of the
Work Product.

     (d) In the event that Williams is unable, after reasonable effort, to secure
Executive’s execution of such documents as provided in Section 6.4(c), whether because of
Executive’s physical or mental incapacity or for any other reason whatsoever, Executive
hereby irrevocably designates and appoints Williams and its duly authorized officers and
agents as his agent and attorney-in-fact, to act for and on his behalf to execute and file
any such application or applications and to do all other lawfully permitted acts to further
the prosecution, issuance and protection of letters patent, copyright and other intellectual
property protection with the same legal force and effect as if personally executed by
Executive.

     6.5 Non-Disparagement.

     (a) Executive agrees not to make, or cause to be made, any statement, observation or
opinion, or communicate any information (whether oral or written, directly or indirectly)
that (i) accuses or implies that Williams and/or any of its Affiliates, together with their
respective present or former officers, directors, partners, stockholders, employees and
agents, and each of their predecessors, successors and assigns, engaged in any wrongful,
unlawful or improper conduct, whether relating to Executive’s employment (or the termination
thereof), the business or operations of Williams, or otherwise; or (ii) disparages, impugns
or in any way reflects adversely upon the business or reputation of Williams and/or any of
its Affiliates, together with their respective

23

 

present or former officers, directors, partners, stockholders, employees and agents,
and each of their predecessors, successors and assigns.

     (b) Williams agrees not to authorize any statement, observation or opinion, or
communicate any information (whether oral or written, direct or indirect) that (i) accuses
or implies that Executive engaged in any wrongful, unlawful or improper conduct relating to
Executive’s employment or termination thereof with Williams, or otherwise; or (ii)
disparages, impugns or in any way reflects adversely upon the reputation of Executive.

     (c) Notwithstanding anything contained herein to the contrary, nothing herein shall be
deemed to preclude Executive or Williams from providing truthful testimony or information
pursuant to subpoena, court order or other similar legal or regulatory process, provided,
that to the extent permitted by law, Executive will promptly inform Williams of any such
obligation prior to participating in any such proceedings.

     6.6 Reasonableness of Restrictive Covenants.

     (a) Executive acknowledges that the covenants contained in this Agreement are
reasonable in the scope of the activities restricted, the geographic area covered by the
restrictions, and the duration of the restrictions, and that such covenants are reasonably
necessary to protect Williams’ legitimate interests in its Confidential Information, its
proprietary work, and in its relationships with its employees, customers, suppliers and
agents.

     (b) Williams has, and Executive has had an opportunity to, consult with their
respective legal counsel and to be advised concerning the reasonableness and propriety of
such covenants. Executive acknowledges that his observance of the covenants contained
herein will not deprive Executive of the ability to earn a livelihood or to support his or
her dependents.

     (c) Executive understands he is bound by the terms of this Article VI, whether or not
he receives severance payments under the Agreement or otherwise.

     6.7 Right to Injunction: Survival of Undertakings.

     (a) In recognition of the confidential nature of the Confidential Information, and in
recognition of the necessity of the limited restrictions imposed by this Agreement,
Executive and Williams agree that it would be impossible to measure solely in money the
damages which Williams would suffer if Executive were to breach any of his obligations
hereunder. Executive acknowledges that any breach of any provision of this Agreement would
irreparably injure Williams. Accordingly, Executive agrees that if he breaches any of the
provisions of this Agreement, Williams shall be entitled, in addition to any other remedies
to which Williams may be entitled under this Agreement or otherwise, to an injunction to be
issued by a court of competent jurisdiction, to restrain any breach, or threatened breach,
of any provision of this Agreement without the necessity of posting a

24

 

bond or other security therefor, and Executive hereby waives any right to assert any
claim or defense that Williams has an adequate remedy at law for any such breach.

     (b) If a court determines that any covenant included in this Article VI is
unenforceable in whole or in part because of such covenant’s duration or geographical or
other scope, such court shall have the power to modify the duration or scope of such
provision, as the case may be, so as to cause such covenant as so modified to be
enforceable.

     (c) All of the provisions of this Agreement shall survive any Separation from Service
of Executive, without regard to the reasons for such termination. Notwithstanding Section
2.6, in addition to any other rights it may have, neither Williams nor any Affiliate shall
have any obligation to pay or provide severance or other benefits (except as may be required
under the Employee Retirement Income Security Act of 1974, as amended) after the Termination
Date if Executive has materially breached any of Executive’s obligations under this
Agreement.

Article VII.

Non-Exclusivity of Rights

     7.1 Waiver of Certain Other Rights. To the extent that Executive shall have received
severance payments or other severance benefits under any other plan, program, policy, practice or
procedure or agreement of any Williams Party prior to receiving severance payments or other
severance benefits pursuant to Article II, the severance payments or other severance benefits under
such other plan, program, policy, practice or procedure or agreement shall reduce (but not below
zero) the corresponding severance payments or other benefits to which Executive shall be entitled
under Article II. To the extent that Executive accepts payments made pursuant to Article II, he
shall be deemed to have waived his right to receive a corresponding amount of future severance
payments or other severance benefits under any other plan, program, policy, practice or procedure
or agreement of any Williams Party.

     7.2 Other Rights. Except as expressly provided in Section 7.1 and as provided in the
Recitals to this Agreement, this Agreement shall not prevent or limit Executive’s continuing or
future participation in any benefit, bonus, incentive or other plan, program, policy, practice or
procedure provided by a Williams Party and for which Executive may qualify, nor shall this
Agreement limit or otherwise affect such rights as Executive may have under any other agreements
with a Williams Party. Amounts that are vested benefits or that Executive is otherwise entitled to
receive under any plan, program, policy, practice or procedure and any other payment or benefit
required by law at or after the Termination Date shall be payable in accordance with such plan,
program, policy, practice or procedure or applicable law except as expressly modified by this
Agreement.

     7.3 No Right to Continued Employment. Nothing in this Agreement shall guarantee the
right of Executive to continue in employment, and Williams and the Employer retain the right to
terminate Executive’s employment at any time for any reason or for no reason.

25

 

Article VIII.

Claims Procedure

     8.1 Filing a Claim.

     (a) Each individual eligible for benefits under this Agreement (“Claimant”) may
submit his application for benefits (“Claim”) to Williams (or to such other person
as may be designated by Williams) in writing in such form as is provided or approved by
Williams. A Claimant shall have no right to seek review of a denial or benefits, or to
bring any action in any court to enforce a Claim, prior to his filing a Claim and exhausting
his rights to review under Sections 8.1 and 8.2.

     (b) When a Claim has been filed properly, it shall be evaluated and the Claimant shall
be notified of the approval or the denial of the Claim within 30 days after the receipt of
such Claim. A Claimant shall be given a written notice in which the Claimant shall be
advised as to whether the Claim is granted or denied, in whole or in part. If a Claim is
denied, in whole or in part, the notice shall contain (i) the specific reasons for the
denial, (ii) references to pertinent provisions of this Agreement on which the denial is
based, (iii) a description of any additional material or information necessary to perfect
the Claim and an explanation of why such material or information is necessary, (iv) the
Claimant’s right to seek review of the denial and a description of the procedures for such
review and (v) a statement regarding Claimant’s right to bring a civil action under section
502(a) of ERISA following an adverse decision on appeal.

     8.2 Review of Claim Denial. If a Claim is denied, in whole or in part, or if a Claim
is neither approved nor denied within the 30-day period specified Section 8.1(b), the Claimant (or
his or her authorized representative) shall have the right at any time to (a) request that Williams
(or such other person as shall be designated in writing by Williams) review the denial or the
failure to approve or deny the Claim, (b) review pertinent documents, and (c) submit issues and
comments in writing. Within 30 days after such a request is received, Williams shall complete its
review and give the Claimant written notice of its decision. Upon request and without charge, the
Claimant will be provided reasonable access to and copies of all documents, records and other
information relevant to the claim. Williams shall include in its notice to Claimant (i) the
specific reasons for its decision, (ii) references to provisions of this Agreement on which its
decision is based, (iii) a statement that the Claimant is entitled to receive, upon request and
free of charge, reasonable access to and copies of all documents, records and other information
relevant to the claim; and (iv) a statement regarding the Claimant’s right to bring a civil action
under ERISA Section 502(a) within 180 days of receipt of notice of denial on appeal.

Article IX.

Miscellaneous

     9.1 No Assignability. This Agreement is personal to Executive and without the prior
written consent of Williams shall not be assignable by Executive otherwise than by will or the

26

 

laws of descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by Executive’s legal representatives.

     9.2 Successors. This Agreement shall inure to the benefit of and be binding upon
Williams and its successors and assigns. Williams will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of Williams (or the Employer during any Post-Change Period) to assume expressly
and agree to perform this Agreement in the same manner and to the same extent that Williams (or, if
applicable, the Employer) would be required to perform it if no such succession had taken place.
Any successor to the business or assets of Williams (or any Employer) which assumes or agrees to
perform this Agreement by operation of law, contract, or otherwise shall be jointly and severally
liable with Williams (or the Employer) under this Agreement as if such successor were Williams (or
the Employer). If Executive’s employment is transferred from Williams to a Subsidiary, or from a
Subsidiary to Williams or another Subsidiary, the rights and obligations of the Employer
(determined prior to such transfer) shall automatically become the rights and obligations of the
Employer (determined immediately following such transfer), without requiring the consent of
Executive.

     9.3 Payments to Beneficiary. If Executive dies before receiving amounts to which
Executive is entitled under this Agreement, such amounts shall be paid in a lump sum to one or more
beneficiaries designated in writing by Executive (each, a “Beneficiary”). If none is so
designated, Executive’s estate shall be his or her Beneficiary.

     9.4 Non-Alienation of Benefits. Benefits payable under this Agreement shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or involuntary, before
actually being received by Executive, and any such attempt to dispose of any right to benefits
payable under this Agreement shall be void.

     9.5 Severability. If any one or more Articles, Sections or other portions of this
Agreement are declared by any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any Article, Section or other portion not
so declared to be unlawful or invalid. Any Article, Section or other portion so declared to be
unlawful or invalid shall be construed so as to effectuate the terms of such Article, Section or
other portion to the fullest extent possible while remaining lawful and valid.

     9.6 Amendments. This Agreement shall not be amended or modified except by written
instrument executed by Williams and Executive; provided however that notwithstanding the terms of
this Agreement to the contrary, the terms of this Agreement shall be administered in such a way to
comply with Code Section 409A as reasonably deemed appropriate by Williams; provided further
however that notwithstanding anything to the contrary herein, Williams shall have the unilateral
right to modify or amend this Agreement as it reasonably deems appropriate related to compliance
with Code Section 409A. The parties to this Agreement intend that this Agreement meet the
requirements of Internal Revenue Code Section 409A and recognize that it may be necessary to modify
this Agreement to reflect guidance under Code Section 409A issued by the Internal Revenue Service.

27

 

     9.7 Notices. All notices and other communications under this Agreement shall be in
writing and delivered by hand, by nationally-recognized delivery service that promises overnight
delivery, or by first-class registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

If to Executive, to Executive at his most recent home address on file with Williams.

If to Williams or the Employer:

The Williams Companies, Inc.

One Williams Center

Tulsa, Oklahoma 74172

Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing. Notice and
communications shall be effective when actually received by the addressee.

     9.8 Joint and Several Liability. In the event that the Employer incurs any obligation
to Executive pursuant to this Agreement, such Employer, Williams and each Subsidiary, if any, of
which such Employer is a subsidiary shall be jointly and severally liable with such Employer for
such obligation.

     9.9 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and the same
instrument.

     9.10 Governing Law. This Agreement shall be interpreted and construed in accordance
with the laws of the State of Oklahoma, without regard to its choice of law principles, except to
the extent preempted by federal law.

     9.11 Captions. The captions of this Agreement are not a part of the provisions hereof
and shall have no force or effect.

     9.12 Rules of Construction. Reference to a specific law shall include such law, any
valid regulation promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.

     9.13 Number and Gender. Wherever appropriate, the singular shall include the plural,
the plural shall include the singular, and the masculine shall include the feminine.

     9.14 Tax Withholding. Williams may withhold from any amounts payable under this
Agreement or otherwise payable to Executive any Taxes Williams determines to be required under
applicable law or regulation and may report all such amounts payable to such authority as is
required by any applicable law or regulation.

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     9.15 No Rights Prior to Change Date. Notwithstanding any provision of this Agreement
to the contrary, this Agreement shall not entitle Executive to any compensation, severance or other
payments or benefits of any kind prior to a Change Date.

     9.16 Entire Agreement. This Agreement and the documents expressly referred to herein
contain the entire understanding of Williams and Executive with respect to severance or benefits in
relation to a Change in Control.

     IN WITNESS WHEREOF, Executive and a duly authorized representative of The Williams Companies,
Inc. have executed this Amended and Restated Change in Control Severance Agreement
                    , 200___.

	 	 	 	 	 	 	 
	 	 	[INSERT EXECUTIVE NAME]	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	THE WILLIAMS COMPANIES, INC., acting on behalf of
itself and its Subsidiaries and Affiliates	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 

	 	 

29

 

EXHIBIT A

THE WILLIAMS COMPANIES, INC.

WAIVER AND RELEASE

CHANGE IN CONTROL SEVERANCE AGREEMENT (TIER ONE)

     This agreement, release and waiver (the “Agreement”), made as of the ___ day of
                    , 200 ___ (the “Effective Date”), is made by and among The Williams Companies, Inc.
(together with all successors thereto, “Company”) and [INSERT EXECUTIVE NAME]
(“Executive”).

     WHEREAS, the Executive and the Company have entered into The Williams Companies, Inc. Change
in Control Severance Agreement (Tier One) (“Severance Agreement”);

     NOW THEREFORE, in consideration for receiving benefits and severance under the Severance
Agreement and in consideration of the representations, covenants and mutual promises set forth in
this Agreement, the parties agree as follows:

     1. Release. Except with respect to all of the Company’s obligations under the
Severance Agreement, the Executive, and Executive’s heirs, executors, assigns, agents, legal
representatives, and personal representatives, hereby releases, acquits and forever discharges the
Company, its agents, subsidiaries, affiliates, and their respective officers, directors, agents,
servants, employees, attorneys, shareholders, successors, assigns and affiliates, of and from any
and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way related
to agreements, events, acts or conduct at any time prior to the day prior to execution of this
Agreement that arose out of or were related to the Executive’s employment with the Company or the
Executive’s termination of employment with the Company including, but not limited to, claims or
demands related to wages. salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements,
sabbatical benefits, severance benefits, or any other form of compensation or equity or thing of
value whatsoever; claims pursuant to under Title VII of the Civil Rights Act of 1964 as amended by
the Civil Rights Act of 1991, 42 U.S.C. § 2000e, et seq.; 42 U.S.C. § 1981; 42 U.S.C. § 1983; 42
U.S.C. § 1985; 42 U.S.C. § 1986; the Equal Pay Act of 1963, 29 U.S.C. § 206(d); the National Labor
Relations Act, as amended, 29 U.S.C. § 160, et seq.; the Americans With Disabilities Act of 1990,
42 U.S.C. § 12101, et seq.; the Employee Retirement Income Security Act of 1974, as amended,
(“ERISA”), 29 U.S.C. § 1001, et seq.; the Age Discrimination in Employment Act of 1967, as amended
by the Older Workers Benefit Protection Act of 1990, 29 U.S.C.§ 621, et seq.; the Family and
Medical Leave Act of 1993, 29 U.S.C.§ 2601 et seq.; the Equal Pay Act; the Rehabilitation Act of
1973; the federal Worker Adjustment and Retraining Notification Act (as amended) and similar laws
in other jurisdictions; the Oklahoma Anti-Discrimination Act, Okla. Stat., tit. 25, §§ 1101, et
seq., and any claims for wrongful discharge, breach of contract, breach of the implied covenant of
good faith and fair dealing, fraud, discrimination, harassment, defamation, infliction of emotional
distress, termination in violation of public policy, retaliation, including workers’ compensation
retaliation under state statutes, tort

30

 

law; contract law; wrongful discharge; discrimination; fraud; libel; slander; defamation;
harassment; emotional distress; breach of the implied covenant of good faith and fair dealing; or
claims for whistle-blowing, or other claims arising under any local, state or federal regulation,
statute or common law. This Release does not apply to the payment of any and all benefits and/or
monies earned, accrued, vested or otherwise owing, if any, to the Executive under the terms of a
Company sponsored tax qualified retirement or savings plan and/or The Williams Companies Retirement
Restoration Plan, except that the Executive hereby releases and waives any claims that his
termination was to avoid payment of such benefits or payments, and that, as a result of his
termination, he is entitled to additional benefits or payments. Additionally, this Release does
not apply to the indemnification provided pursuant to the Severance Agreement. This Release does
not apply to any claim or rights which might arise out of the actions of the Company after the date
the Executive signs this Agreement.

     2. No Inducement. Executive agrees that no promise or inducement to enter into this
Agreement has been offered or made except as set forth in this Agreement, that the Executive is
entering into this Agreement without any threat or coercion and without reliance or any statement
or representation made on behalf of the Company or by any person employed by or representing the
Company, except for the written provisions and promises contained in this Agreement.

     3. Damages. The parties agree that damages incurred as a result of a breach of this
Agreement will be difficult to measure. It is, therefore, further agreed that, in addition to any
other remedies, equitable relief will be available in the case of a breach of this Agreement. It
is also agreed that, in the event Executive files a claim against the Company with respect to a
claim released by Executive herein (other than a proceeding before the EEOC), the Company may
withhold, retain, or require reimbursement of all or any portion of the benefits and severance
payments under the Severance Agreement until such claim is withdrawn by Executive.

     4. Advice of Counsel; Time to Consider; Revocation. Executive acknowledges the
following:

     (a) Executive has read this Agreement, and understands its legal and binding effect.
Executive is acting voluntarily and of Executive’s own free will in executing this
Agreement.

     (b) Executive has been advised to seek and has had the opportunity to seek legal
counsel in connection with this Agreement.

     (c) Executive was given at least 21 days to consider the terms of this Agreement before
signing it.

     Executive understands that, if Executive signs this Agreement, Executive may revoke it within
seven days after signing it by delivering written notification of intent to revoke within that
seven day period. Executive understands that this Agreement will not be effective until after the
seven-day period has expired.

31

 

     5. Severability. If all or any part of this Agreement is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not
invalidate any other portion of this Agreement. Any section or a part of a section declared to be
unlawful or invalid shall, if possible, be construed in a manner which will give effect to the
terms of the section to the fullest extent possible while remaining lawful and valid.

     6. Amendment. This Agreement shall not be altered, amended, or modified except by
written instrument executed by the Company and the Executive. A waiver of any portion of this
Agreement shall not be deemed a waiver of any other portion of this Agreement.

     7. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, but all of which together will constitute one and the same
instrument.

     8. Headings. The headings of this Agreement are not part of the provisions hereof and
shall not have any force or effect.

     9. Rules of Construction. Reference to a specific law shall include such law, any
valid regulation promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.

     10. Applicable Law. The provisions of this Agreement shall be interpreted and
construed in accordance with the laws of the State of Oklahoma without regard to its choice of law
principles.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates specified below.

	 	 	 	 	 	 	 
	 	 	[INSERT EXECUTIVE NAME]	 	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	THE WILLIAMS COMPANIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 

	 	 

32

 

A C K N O W L E D G M E N T

     I HEREBY ACKNOWLEDGE that The Williams Companies, Inc. (“the Company”), in accordance with the
Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection
Act of 1990, informed me in writing that:

     (1) I should consult with an attorney before signing the Change in Control Severance Agreement
(“Agreement”) that was provided to me.

     (2) I may review the Agreement for a period of up to twenty-one (21) days prior to signing the
Agreement. If I choose to take less than twenty-one (21) days to review the Agreement, I do so
knowingly, willingly and on advice of counsel.

     (3) For a period of seven (7) days following the signing of the Agreement, I may revoke the
Agreement, and that the Agreement will not become effective or enforceable until the seven (7) day
revocation period has elapsed.

     (4) Any Severance Benefits paid pursuant to the Agreement will be paid in accordance with the
Company’s normal pay cycle but will not be paid to me until the seven-day revocation period has
elapsed.

     (5) Company shall not accept my signed Agreement prior to the last day of my employment.

     I HEREBY FURTHER ACKNOWLEDGE receipt of this Change in Control Severance Agreement on the
      day of                     , 200___.

WITNESS:

	 	 	 
	 

	 	 
	 

	 	[INSERT EXECUTIVE’S NAME]

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