Document:

exv10w1

 

Exhibit 10.1

RELEASE AND SEPARATION AGREEMENT

     This RELEASE AND SEPARATION AGREEMENT (the “Agreement”) is made and entered into by Joseph
Saporito (“EMPLOYEE”) and Carriage Services, Inc., its past, present and future subsidiaries,
parents, and affiliates and their past, present, and future employees, officers, directors, agents,
insurers and legal counsel (hereinafter collectively referred to as the “COMPANY”).

     WHEREAS, EMPLOYEE and COMPANY entered into an Employment Agreement dated August 7, 2007;

     WHEREAS, EMPLOYEE has advised COMPANY of his intent to resign his employment as of April 30,
2008, and terminate the Employment Agreement;

     WHEREAS, COMPANY wishes to provide EMPLOYEE with an orderly transition from the COMPANY and
both EMPLOYEE and the COMPANY wish to settle any and all issues and potential issues which relate
or may relate to EMPLOYEE’s employment with and departure from the COMPANY including, but not
limited to, those arising under the Employment Agreement;

     NOW, THEREFORE, COMPANY and EMPLOYEE agree as follows, in consideration of the mutual
covenants and obligations contained herein, and intending to be legally held bound:

     1. EMPLOYEE’S RESIGNATION. EMPLOYEE will resign his employment and cease to be employed by
the COMPANY effective April 30, 2008 (the “Termination Date”). In addition, EMPLOYEE hereby resigns
his position as Chief Financial Officer, Executive Vice President and Assistant Secretary for
Carriage Services, Inc.

     2. CONSIDERATION. In consideration for the releases and other covenants set forth in this
Agreement, after this Agreement becomes effective, the COMPANY agrees to provide EMPLOYEE:

a. COMPANY will continue to pay EMPLOYEE’s base salary at the biweekly rate of $11,539.21 for a
period of twelve (12) months or until EMPLOYEE finds subsequent full-time employment, whichever
occurs first (the “Separation Period”). The COMPANY shall have the right to deduct from any
payment of compensation to the EMPLOYEE hereunder (x) any federal, state or local taxes required by
law to be withheld with respect to such payments, and (y) any other amounts specifically authorized
to be withheld or deducted by the EMPLOYEE. EMPLOYEE agrees to provide the Company notice in
writing, to the attention of J. Bradley Green at Carriage Services, Inc., 3040 Post Oak, Blvd,
Suite 300, Houston, Texas 77056, within three (3) days of commencing subsequent employment.
EMPLOYEE Payments during the first ten (10) months of the Separation Period shall be paid in
accordance with the COMPANY’s normal payroll schedule and payroll practices in effect from time to
time. The final payment, representing the last two (2) months, shall be paid in a single lump sum
no later than March 1, 2009.

 

 

          b. EMPLOYEE will have the option to exercise his COBRA rights to continue health insurance
coverage under the COMPANY’S group plans. To the extent EMPLOYEE exercises such right, during the
Separation Period, COMPANY will pay on EMPLOYEE’s behalf the monthly premium costs for COBRA
coverage for EMPLOYEE and EMPLOYEE’s covered dependants.

          c. COMPANY will pay EMPLOYEE an amount of $150,000. The COMPANY shall have the right to
deduct from any payment of compensation to the EMPLOYEE hereunder (x) any federal, state or local
taxes required by law to be withheld with respect to such payments, and (y) any other amounts
specifically authorized to be withheld or deducted by the EMPLOYEE. Such amount shall be paid in a
single, lump-sum payment no later than ten (10) days after the EMPLOYEE signs this Agreement.

          d. COMPANY agrees to release EMPLOYEE from any liability arising pursuant to any breach by him
of the Employment Agreement.

          e. COMPANY agrees to pay EMPLOYEE for all accrued, but unused vacation as of the Termination
Date.

          f. COMPANY agrees to provide EMPLOYEE limited secretarial services during the time the COMPANY
is paying consideration pursuant to Subsection 2(a). These secretarial services will be provided
at the complete and sole discretion of the COMPANY, such that these services may be terminated by
the COMPANY at any time.

          g. In accordance with the terms of the 2006 Long-Term Incentive Plan, the 18,750 shares of
Carriage Services, Inc. common stock granted in the Restricted Stock Agreement between Joseph
Saporito and Carriage Services, Inc. effective February 13, 2007, that are not currently vested,
will become vested on the date that this Agreement becomes irrevocable. Additionally, in
accordance with the terms of the Second Amended and Restated 1996 Stock Incentive Plan, the 11,250
shares of Carriage Services, Inc. common stock granted in the Restricted Stock Agreement between
Joseph Saporito and Carriage Services, Inc. effective February 3, 2005, that are not currently
vested, will become vested on the date that this Agreement becomes irrevocable.”

          h. If the EMPLOYEE dies at any time while the COMPANY is paying consideration pursuant to
Subsection 2(a), the Company shall continue making the remaining payments under Subsection 2(a) to
the Employee’s estate. Such payments to the Employee’s estate shall be made in the same manner and
at the same times as they would have been paid to the Employee had he not died.

     EMPLOYEE acknowledges and agrees that the consideration outlined above does not constitute
monies to which he would otherwise be entitled as a result of his prior employment with the
COMPANY, and that these monies constitute fair and adequate compensation for the promises and
covenants of EMPLOYEE set forth in this Agreement.

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     3. EMPLOYEE’S RELEASE OF CLAIMS. For and in consideration of the Consideration as described
in paragraph 2 of this Agreement, EMPLOYEE hereby irrevocably and unconditionally releases, forever
discharges, and covenants not to sue, or bring any other legal action against the COMPANY with
respect to any and all claims and causes of action of any nature, both past and present, known and
unknown, foreseen and unforeseen, which EMPLOYEE has or which could be asserted on his behalf by
any other person or entity, resulting from or relating to any act or omission of any kind occurring
on or before the date of the execution of this Agreement. EMPLOYEE understands and agrees that
this Release includes, but is not limited to, the following:

     a. All claims and causes of action arising under contract, tort or other common
law, including, without limitation, breach of contract, fraud, estoppel,
misrepresentation, express or implied duties of good faith and fair dealing,
wrongful discharge, discrimination, retaliation, harassment, negligence, gross
negligence, false imprisonment, assault and battery, conspiracy, intentional or
negligent infliction of emotional distress, slander, libel, defamation, refusal to
perform an illegal act and invasion of privacy.

     b. All claims and causes of action arising under any federal, state, or local
law, regulation, or ordinance, including without limitation, the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1866, the Americans With Disabilities Act,
the Age Discrimination in Employment Act (“ADEA”) (which prohibits age
discrimination in employment), the Older Workers Benefit Protection Act, the Fair
Labor Standards Act, the Family and Medical Leave Act, the Employee Retirement
Income Security Act, and relevant state laws including, but not limited to the
Illinois Human Rights Act, as well as any claims for wages, employee benefits,
vacation pay, severance pay, pension or profit sharing benefits, health or welfare
benefits, bonus compensation, vesting of stock options, commissions, deferred
compensation or other remuneration, or employment benefits or compensation.
EMPLOYEE specifically waives all rights to any additional bonus and/or awards or
payment under the Performance Units Plan, the 2006 Long-Term Incentive Plan or any
other plan or policy of the COMPANY.

     c. All claims and causes of action for past or future loss of pay or benefits,
expenses, damages for pain and suffering, mental anguish or emotional distress
damages, liquidated damages, punitive damages, compensatory damages, attorney’s
fees, interest, court costs, physical or mental injury, damage to reputation, and
any other injury, loss, damage or expense or any other legal or equitable remedy of
any kind whatsoever.

     d. All claims and causes of action arising out of or in any way connected with,
directly or indirectly, EMPLOYEE’s employment with the COMPANY, or any incident
thereof, including, without limitation, EMPLOYEE’s treatment by the COMPANY; the
terms and conditions of the EMPLOYEE’s employment; and the separation of EMPLOYEE’s
employment.

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     4. RETURN OF COMPANY PROPERTY. EMPLOYEE shall return, in good working order, any and all
property of the COMPANY that is in his possession, custody or control on or before April 30, 2008.
Such property includes, but is not limited to, keys, software, calculators, equipment, credit
cards, forms, files, manuals, correspondence, business cards, personnel data, lists of or other
information regarding customers, contacts and/or employees, contracts, contract information,
agreements, leases, plans, brochures, catalogues, training materials, computer tapes and diskettes
or other portable media.

     5. TAX ISSUES. The COMPANY may withhold from any benefits and payments made pursuant to this
Agreement all federal, state, city and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other normal employee deductions made with respect to the
COMPANY’S employees generally. Notwithstanding anything in this Agreement to the contrary, in the
event it shall be determined that any payment or distribution by the COMPANY to the EMPLOYEE or for
his benefit, whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of
the Code, or any interest or penalties with respect to such excise tax (such excise tax, together
with any such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”),
the COMPANY shall pay to the EMPLOYEE an additional payment (a “Gross-up Payment” ) in an amount
such that after payment by the EMPLOYEE of all taxes (including any interest or penalties imposed
with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, the EMPLOYEE
retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. All
determinations required to be made under this Section 21 shall be made by the COMPANY’S accounting
firm (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting calculations
both to the COMPANY and the EMPLOYEE. All fees and expenses of the Accounting Firm shall be borne
solely by the COMPANY. Absent manifest error, any determination by the Accounting Firm shall be
binding upon the COMPANY and the EMPLOYEE.

     6. NON-ADMISSION. EMPLOYEE and COMPANY agree that this Agreement and the payment of money to
EMPLOYEE by the COMPANY is not an admission by either party of any violation of the other party’s
rights or of any violation of contract or statutory or common law.

     7. NON-DISPARAGEMENT. EMPLOYEE specifically covenants and agrees not to, directly or
indirectly, make or cause to be made to anyone any statement, orally or in writing, criticizing or
disparaging the COMPANY with respect to his employment with the COMPANY. EMPLOYEE specifically
covenants and agrees not to, directly or indirectly, make or cause to be made to anyone any
statement, orally or in writing, criticizing or disparaging the COMPANY, or commenting in a
negative fashion on the operations or business reputation of the COMPANY.

     8. CONTINUING OBLIGATIONS. EMPLOYEE acknowledges that in the course of his employment with
the COMPANY he has obtained confidential and proprietary information including, but not limited to,
financial, business, product, customer and marketing information, plans, forecasts and strategies.
EMPLOYEE acknowledges and agrees that he has a

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continuing obligation to maintain the confidentiality of all such non-public information even after
the termination of his employment with the COMPANY.

     9. COOPERATION. EMPLOYEE acknowledges and agrees that from and after the Effective Date of
this Agreement, he will cooperate fully with the COMPANY, its officers, employees, agents,
affiliates and attorneys in the defense or prosecution of, or in preparation for the defense or
prosecution of any lawsuit, dispute, investigation or other legal proceedings (“Proceedings”).
EMPLOYEE further acknowledges and agrees that he will cooperate fully with the COMPANY, its
officers, employees, agents, affiliates and attorneys on any matter related to COMPANY business
(“Matters”) during the period of EMPLOYEE’s employment.

     Such cooperation shall include providing true and accurate information or documents
concerning, or affidavits or testimony about, all or any matters at issue in any
Proceedings/Matters as shall from time to time be requested by the COMPANY, and shall be with the
knowledge of EMPLOYEE. Such cooperation shall be provided by EMPLOYEE without remuneration, but
EMPLOYEE shall be entitled to reimbursement for all reasonable and appropriate expenses incurred by
him in so cooperating including, by way of example and not by way of limitation, airplane fares,
hotel accommodations, meal charges and other similar expenses to attend Proceedings/Matters outside
of the city of EMPLOYEE’s residence. The reasonable fees and expenses of EMPLOYEE shall be
reimbursed by the COMPANY on a regular, periodic basis upon presentation by EMPLOYEE of a statement
and receipts in accordance with the COMPANY’S customary practices and policies; provided, however,
that such reimbursement will be paid no later than December 31 of the calendar year following the
calendar year in which EMPLOYEE incurred the expense. In the event EMPLOYEE is asked by a third
party to provide information regarding the COMPANY, or is called other than by the COMPANY to
testify in any Proceeding/Matter related to the COMPANY, he will notify the COMPANY as soon as
possible in order to give the COMPANY a reasonable opportunity to respond and/or participate in
such Proceeding/Matter.

     10. FEES AND COSTS. Except as set forth in paragraph 12 of this Agreement, below, the parties
shall bear their own attorneys’ fees and costs.

     11. CONSEQUENCES OF BREACH BY EMPLOYEE. EMPLOYEE acknowledges that it would be unfair for
EMPLOYEE to retain or receive the Separation Payments if the promises given by EMPLOYEE herein are
not enforced (excluding a lawsuit filed by EMPLOYEE solely to challenge the validity of the Age
Discrimination in Employment Act waiver). This provision will not limit EMPLOYEE’s liability if
COMPANY’s actual damages exceed the amount received by EMPLOYEE under this Agreement.

     COMPANY and EMPLOYEE acknowledge and agree that the prevailing party shall be entitled to
payment of its attorneys’ fees and other costs and expenses incurred in enforcing this provision of
the Agreement and/or in prosecuting any counterclaim or cross-claim based on this provision of the
Agreement.

     12. CHOICE OF LAW/VENUE. This Agreement shall be governed by, construed, and enforced in
accordance with, and subject to, the laws of the State of Texas or federal law, where applicable,
without regard to the conflict of law principles of any jurisdiction. In the event there shall be
any dispute arising out of the terms and conditions of, or in connection with, this

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Agreement, the party seeking relief shall submit such dispute to the United States District Court
for the Southern District of Texas or, if federal jurisdiction is lacking, the District Courts of
Harris County, Texas.

     13. TIME LIMITS. Upon receipt of this Agreement, EMPLOYEE SHALL have up to twenty-one (21)
calendar days to consider and decide whether or not to sign and return it to COMPANY. If EMPLOYEE
decides to sign this Agreement at any time prior to end of the twenty-one day period, EMPLOYEE
agrees to immediately send the signed Agreement to the COMPANY, by registered or certified
United States mail, return receipt requested, or by commercial overnight carrier requiring
signature upon delivery, to the attention of J. Bradley Green at Carriage Services, Inc., 3040
Post Oak, Blvd, Suite 300, Houston, Texas 77056, on the date it is signed by EMPLOYEE. This
Agreement shall be considered to have been delivered to and received by the COMPANY at the address
set forth above on the date it is postmarked.

     14. REVOCATION. EMPLOYEE may revoke this Agreement within seven (7) days of EMPLOYEE signing
it. Revocation must be made by delivering a written notice of revocation to J. Bradley Green at
the address set forth in paragraph 13, above, either by hand delivery, facsimile or by registered
or certified United States mail, return receipt requested, or by commercial overnight carrier
requiring signature upon delivery. If EMPLOYEE revokes this Agreement it shall not be effective or
enforceable and EMPLOYEE shall not receive the consideration promised by the COMPANY described in
the paragraph 2 of this Agreement.

     15. ENTIRE AGREEMENT. It is expressly understood and agreed that this Agreement embodies the
entire agreement between the Parties relating to EMPLOYEE’s employment by the COMPANY and all other
matters arising between COMPANY and EMPLOYEE prior to the date and time of execution hereof, and
supersedes any and all prior agreements, arrangements, or understandings between and among them,
with the exception of paragraphs 8 and 9 of the Employment Agreement executed by EMPLOYEE during
his employment with the COMPANY and the Indemnity Agreement executed by the Company and EMPLOYEE on
August 13, 2003. EMPLOYEE and COMPANY agree that paragraphs 8 and 9 of the Employment Agreement
and the Indemnity Agreement executed by the EMPLOYEE on August 13, 2003 are enforceable and it is
their specific intent that these provisions shall survive the execution of this Agreement.

     No oral understandings, statements, promises, terms, conditions, obligations, or agreements
contrary or in addition to the terms of this Agreement exist. This Agreement may not be changed by
oral representations, and may only be amended by written instrument executed by a duly authorized
representative of each of the Parties, or their respective successors or assigns. If any part of
this Agreement is found to be illegal or unenforceable by any agency or court, the remaining
provisions shall continue in full force and effect.

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     16. OTHER REPRESENTATIONS: EMPLOYEE hereby represents and certifies that he: (1) has
carefully read all of this Agreement; (2) has been given a fair opportunity to discuss and
negotiate the terms of this Agreement; (3) understands its provisions; (4) has been advised in
writing and given the opportunity to seek advice and consultation with attorneys regarding this
Agreement; (5) has determined that it is in his best interests to enter into this Agreement; (6)
has not been influenced to sign this Agreement by any statement or representation by the COMPANY
not contained in this Agreement; and (7) enters into this Agreement knowingly and voluntarily.

READ THIS AGREEMENT CAREFULLY BEFORE SIGNING

SIGNING OF RELEASE AND SEPARATION AGREEMENT

     We the undersigned, do hereby sign and agree to the terms set forth in the Release and Settlement
Agreement, on the dates set forth below:

	 	 	 	 	 	 	 
	/s/ Joseph Saporito

	 	 	 	4/28/2008
	 	 
	 

	 	 	 	 	 	 
	Joseph Saporito

	 	 	 	Date signed	 	 
	 
	 	 	 	 	 	 
	/s/ Melvin C. Payne

	 	 	 	4/28/2008
	 	 
	 

	 	 	 	 	 	 
	Melvin C. Payne

	 	 	 	Date signed	 	 
	Carriage Services, Inc.
	 	 	 	 	 	 
	Chief Executive Officer
	 	 	 	 	 	 

7exv10w4

 

Exhibit 10.4

CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE

     THIS CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE (“Agreement”) is entered into this
2nd day of April, 2008, by and between THE WILLIAMS COMPANIES, INC., a Delaware
Corporation (“Williams” or the “Company”), and Michael P. Johnson (“Executive”);

     WHEREAS, Executive has expressed an interest in retiring, effective March 31, 2008
(“Separation Date”); and

     WHEREAS, the Company has determined that the continued availability of Executive after his
retirement is needed in order to provide an orderly transition of duties to Executive’s successor;
and

     WHEREAS, Executive is willing to provide consulting services after his retirement in
accordance with the provisions of this Agreement and the Consulting Agreement, a copy of which is
attached hereto as Exhibit “A”; and

     WHEREAS, the Company has agreed to provide the Executive with a Separation Payment in exchange
for Executive’s comprehensive release and agreements concerning, non-disparagement,
non-solicitation of Company’s employees, and maintaining confidentiality;

     NOW, THEREFORE, in consideration of their mutual promises made herein and for other good and
valuable consideration, and intending to be legally bound, the Company and Executive hereby agree
as follows:

     1. Executive Services. Executive and Company agree that, for a period of up to nine
(9) months following the Separation Date, to be determined by the Company in its sole and absolute
discretion, Executive will provide consulting services to the Company in accordance with the terms
of the Consulting Agreement attached hereto as Exhibit “A”.

     2. Company Payments. In accordance with the Company’s normal pay cycle, but not
earlier than eight (8) days following Executive’s execution of this

 

 

Agreement, which shall not occur prior to March 31, 2008, the Company shall pay Executive:

     a. The sum of Two Hundred Sixty Three Thousand Seven Hundred Fifty Eight Dollars
($263,758.00) (“Consulting Fee”) in exchange for Executive executing the Consulting
Agreement set forth on Exhibit “A” and performing the services described therein; and

     b. The sum of Five Hundred Thousand Dollars ($500,000.00) (“Separation Payment”) in
exchange for Executive’s covenants and promises contained in this Agreement.

     3. Financial Planning Services. As further consideration for the Executive’s promises
and covenants and promises contained in this Agreement, Williams shall continue to provide
Executive with financial planning services utilizing The Ayco Company, L.P. through July 31, 2009.

     4. Release. In consideration of the Separation Payment and other benefits provided
hereunder, Executive, for himself, his attorneys, and his heirs, executors, administrators,
successors and assigns, does hereby fully, finally and forever release and discharge Company and
its parent company, subsidiaries, affiliates, predecessors, successors and assigns and their
respective officers, directors, employees, representatives, agents and fiduciaries, de facto or de
jure or benefit plans (“Released Parties”) of and from any and all charges, claims, actions (in law
or in equity), suits, demands, losses, expenses, damages, debts, liabilities, obligations,
disputes, proceedings, or any other manner of liability (known or unknown) including without
limitation those arising from, in whole or in part, the employment relationship between Company or
one of its subsidiaries or affiliates and Executive or the termination thereof which exist, or have
heretofore accrued, fixed or contingent, known or unknown, including without limitation any claims
arising 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

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U.S.C. § 1001, et seq. (except that the parties agree that by signing this Agreement,
Executive does not waive his rights under any claim for benefits that was or may have been filed
prior to the date Executive signed this Agreement); 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 Oklahoma Anti-Discrimination
Act, Okla. Stat., tit. 25, §§ 1101, et seq., and any claims for wrongful discharge, defamation,
infliction of emotional distress, termination in violation of public policy, retaliatory discharge,
including those based on workers’ compensation retaliation under state statutes, discrimination on
the basis of handicap, or claims arising under any local, state or federal regulation, statute or
common law. Executive acknowledges and affirms that this Agreement is in nature and character both
general and specific and that the specific descriptions and details hereinafter and hereinabove set
forth do not in any manner limit or otherwise affect the general nature and character of this
Agreement or the application thereof to Company and Executive. This Agreement does not release or
discharge any claim or rights which might arise out of the actions of Company after the date
Executive signs this Agreement.

     5. Severance. Due to the Executive’s voluntary retirement and the Consulting Fee and
Separation Payment provided hereunder, Executive also hereby voluntarily waives any right which he
may have to receive severance benefits under The Williams Companies Severance Pay Plan or any other
severance pay plan, practices, programs, agreements or arrangements maintained by the Company,
including, but not limited to, any change-in-control severance plan or agreement.

     6. No Release of Vested Benefits or Health and Welfare Benefits. Executive does not,
by signing this Agreement, release or discharge any right to any vested, deferred benefit in any
qualified employee benefit or incentive plan which provides for retirement, pension, savings,
thrift and/or employee stock ownership or any benefit due Executive as a participant in any
employee health and welfare plan, as such terms are used under ERISA, maintained by any of the
Released Parties which employed Executive. Executive’s rights under any such employee benefit or
incentive compensation plan shall be governed by the terms of such plan. Furthermore, following

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the eighth (8th) day after the Separation Date, and in accordance with Company’s
normal pay cycle, Executive will receive payment for the balance of any accrued and unused Paid
Time Off (PTO) for the calendar year 2008. Executive understands and acknowledges that, pursuant
to the Company’s PTO Policy, Executive will not accrue any additional PTO while performing services
as a consultant under the Consulting Agreement.

     7. Confidentiality/Company Property. Executive shall keep confidential the existence
of this Agreement, its terms, contents, conditions, proceedings and negotiations, he will make no
statements or representations relating thereto, except to her attorney or tax advisor, his spouse,
or as may otherwise be allowed or required by law. Executive further acknowledges his continuing
obligations to maintain confidentiality of Released Parties’ confidential and proprietary
information and he shall not, at any time, use for his personal benefit, or disclose, communicate
or divulge to, or use for the direct or indirect benefit of any person, firm, association or
company other than the Released Parties any confidential information regarding the employees,
business methods, business strategies and plans, policies, procedures, techniques, research or
development projects or results, trade secrets, or other knowledge or processes of or developed by
the Released Parties, including but not limited to, or any other confidential information relating
to or dealing with the business operations, employees or activities of Released Parties, made known
to Executive or learned or acquired by Executive while in the employ of Company or one of its
subsidiaries or affiliates. Executive acknowledges that this Paragraph 7 is a separate agreement,
and the Company is granted the right of specific performance to enforce the provisions of this
Paragraph 7. The Executive also acknowledges that this Paragraph 7 is a material term of this
Agreement and that its breach could result in damage to the Company that may be difficult to
ascertain and that upon any such breach or in reasonable anticipation of any such breach, the
Company will be entitled to an order of any court of competent jurisdiction to enjoin such breach.

     8. Continued Cooperation. Upon reasonable request of Company, Executive shall consult
with Company in the orderly transition of business matters in which Executive participated during
his active employment with Company and/or with

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respect to any litigation, legal proceedings or other disputes arising in connection with such
business matters, including, but not limited to, matters with respect to Company’s response to
inquiries initiated by governmental entities or other third parties and defense of certain lawsuits
against Company and such other matters as shall be reasonably requested from time to time by
Company’s General Counsel.

     9. Non-solicitation. For a period of twenty-four (24) months following Executive’s
Separation Date, Executive shall not directly or indirectly induce or attempt to influence any
employee of the Released Parties to terminate his or her employment with the Released Parties.

     10. Executive’s Miscellaneous Covenants. By signing this Agreement, Executive
covenants, agrees, represents and warrants that:

     (a) The Separation Payment provided hereunder is a benefit to which he is not otherwise
entitled under any Company plan, program or prior agreement;

     (b) Executive has not filed and will not in the future file any lawsuits, complaints,
petitions or accusatory pleadings in a court of law against any of the Released Parties
based upon, arising out of or in any way related to any event or events occurring prior to
the signing of this Agreement, including, without limitation, his employment with any of the
Released Parties or the termination thereof;

     (c) This Agreement specifically includes, without limitation, all claims asserted by or
on behalf of Executive against any of the Released Parties, together with all claims which
might have been asserted by or on behalf of Executive in any suit, claim (known or unknown),
or grievance against any of the Released Parties for or on account of any matter or things
whatsoever up to and including the date Executive signs this Agreement;

     (d) He has not heretofore assigned or transferred, or purported to assign or transfer,
to any person or entity, any claim or any portion thereof or interest therein and
acknowledges that this Agreement shall be binding upon Executive and upon his heirs,
administrators, representatives, executors, successors, and assigns, and shall inure to the
benefit of the Released Parties

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and each of them, and to their heirs, administrators, representatives, executors,
successors, and assigns;

     (e) Executive waives all rights to recovery for any damages or compensation awarded as
a result of any suit or proceeding by any third party or governmental agency on Executive’s
behalf.

     11. Mutual Non-disparagement. Company agrees to refrain from making or publishing any
statement critical of Executive or in any way adversely affecting or otherwise maligning
Executive’s reputation. Executive agrees that he will not make or publish any statement critical
of the Released Parties, its affiliates, or their respective executive officers, and directors or
in any way adversely affecting or otherwise maligning the business or reputation of any member of
the Released Parties.

     12. No Admission of Liability. Notwithstanding the provisions of this Agreement and
the payments to be made by Company to Executive hereunder, Released Parties do not admit any manner
of liability to Executive. This Agreement has been entered into as a means of settling any and all
disputes that have or may have arisen between Released Parties and Executive.

     13. No Tax Advice. Executive agrees and acknowledges that the Company has made no
representations to him regarding the tax consequences of the money paid pursuant to this Agreement,
and that he shall rely upon his own tax advice with respect to any taxes owed on any of such
monies. Executive shall be solely responsible for the payment of any federal, state or local taxes
owed by Executive as a result of his receipt of money or benefits paid pursuant to this Agreement.

     14. Indemnification. Subject to Article VIII of the By-Laws of The Williams
Companies, Inc., and to the extent permitted by law, Company will defend and indemnify Executive
with regard to claims brought against Executive by third parties and arising from actions taken by
Executive in his capacity as an officer and agent of Company.

     15. Recovery of Monies Owed to or by the Company. Executive acknowledges and agrees
that any monies he owes to Company, Released Parties, or to Company’s or Released Parties’
vendor(s) contracted to provide business tools or services for use by Executive in his employment,
including but not limited to Company

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credit card debt, relocation repayment obligations or pre-paid Educational Assistance Plan
benefits, may be deducted from Executive’s Separation Payment. Williams agrees that Executive
shall be entitled to reimbursement of any reasonable expenses incurred by Executive in connection
with his employment with the Company up through March 31, 2008, provided Executive submits a proper
expense report itemizing such expenses no later than April 30, 2008.

     16. Opportunity to Consider Agreement and Consult Counsel. Executive acknowledges that
this Agreement is a binding legal document, and that he has been advised by Company to consult with
an attorney before signing this Agreement. By signing this Agreement, Executive acknowledges that
he has been extended a period of twenty-one (21) days within which to consider this Agreement.

     17. Revocation Period. For a period of seven (7) days following Executive’s execution
of the Agreement, Executive may revoke the Agreement by notifying Company, in writing, of his
desire to do so. After the seven (7) day period has expired, this Agreement shall become effective
and enforceable.

     18. Binding Effect. By signing this Agreement, the parties agree and acknowledge that
they have carefully read and fully understood the contents of this Agreement, and that this
Agreement has been freely signed by the party executing this Agreement. This Agreement is binding
upon and shall inure to the benefit of the parties hereto and their respective successors, assigns,
personal representatives, officers, directors, agents, attorneys, parents, subsidiaries and
affiliates.

     19. Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto pertaining to the facts and matters stated herein and supersedes any and all prior
understandings, agreements or representations or understandings, whether written or oral, prior to
the date hereof; provided, however, that this Agreement shall have no effect on the enforceability
of the Consulting Agreement referenced in Paragraph 1 herein and attached hereto as Exhibit “A,” or
on the enforceability of any prior agreement relating to any covenant not to compete, trade
secrets, and/or confidentiality.

     20. Governing Law. This Agreement and the rights and obligations hereunder shall be
construed in all respects in accordance with the internal laws of the State of

7

 

Oklahoma without reference to the conflict of laws provisions thereof. Should any provision
of this Agreement be found or declared or determined by a court of competent jurisdiction to be
invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and
any such invalid part, term or provision shall be deemed not to be a part of this Agreement. Any
litigation concerning this Agreement or the facts or matters described herein shall be brought only
in a court of competent jurisdiction in Tulsa County, Tulsa, Oklahoma, and the parties hereby waive
personal jurisdiction and any objections to venue.

     21. Amendment of Agreement. This Agreement may not be modified or amended except by
an instrument in writing signed by both Executive and a duly authorized representative of Company.

     22. Headings. The heading of paragraphs or subparagraphs herein are included solely
for convenience or reference and will not control the meaning or interpretation of any of the
provisions of this Agreement.

     23. Notices: Any and all notices required to be sent pursuant to the terms of this
Agreement will be sent by registered or certified mail or be personally delivered to the parties
hereto at the following addresses or such other addresses as they may designate:

	 	 	 	 	 	 
	 

	 	Executive:
	 	Michael P. Johnson
	 
	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Tulsa, OK                      
	 
	 	 	 	 
	 

	 	Company:
	 	The Williams Companies, Inc.
	 

	 	 	 	Attn: Vice President, Human Resources
	 

	 	 	 	One William Center
	 

	 	 	 	P. O. Box 2400
	 

	 	 	 	Tulsa, Oklahoma 74102

8

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first written
above.

	 	 	 
	THE WILLIAMS COMPANIES, INC.
	 	 
	 
	 	 
	By: /s/ Steven J. Malcolm
	 	 
	 
	 	 
	Title: Chairman, President & CEO
	 	 
	 
	 	 
	 

	 	WITNESS:
	 
	 	 
	/s/ Michael P. Johnson

	 	/s/ Brenda Spencer
	Michael P. Johnson
	 	 

9

 

ACKNOWLEDGMENT

     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 Confidential Separation
Agreement and Release (“Agreement”) which was provided to me today.

     (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 day revocation period has elapsed; and

     (4) The Consulting Fee and Separation Payment described in Paragraph 2 of this
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.

     I HEREBY FURTHER ACKNOWLEDGE receipt of this Confidential Separation Agreement and Release on
the 2nd day of April, 2008.

	 	 	 
	 

	 	WITNESS:
	 
	 	 
	/s/
Michael P. Johnson

	 	/s/ Brenda Spencer
	Michael P. Johnson
	 	 

10

 

EXHIBIT “A”

CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT is entered into this 2nd day of April, 2008, by and
between THE WILLIAMS COMPANIES, INC. a Delaware Corporation, (“Williams” or the “Company”) and
Michael P. Johnson (“Consultant”).

     WHEREAS, Williams wishes to avail itself of Consultant’s knowledge, expertise and experience
by utilizing the services of Consultant; and

     WHEREAS, Consultant is willing to serve as a consultant to Williams upon the terms and
conditions set forth below;

     NOW, THEREFORE, in consideration of their mutual promises and for other good and valuable
consideration, Williams and Consultant hereby agree as follows:

     1. Consulting Services.

     (a) During the period beginning on the date on which Consultant ceases to be employed
by Williams and continuing through December 31, 2008 (the “Consulting Period”), Consultant
shall provide to Williams, including its subsidiaries and affiliates, consulting services
commensurate with his status and experience as Williams’ Senior Vice President and Chief
Administrative Officer to enable a smooth transition of his duties to his successor with
respect to such matters as shall be reasonably requested from time to time by the Chief
Executive Officer of Williams (the “Williams Representative”), provided that Consultant
shall not be required to provide such services during any period when he is unable to
perform due to his health.

     (b) Consultant shall provide consulting services to Williams only as needed and when
reasonably requested by the Williams Representative, provided that, without his
prior consent, Consultant shall not be required to devote more than eighty (80) hours in any
calendar month to the performance of any consulting services hereunder. Consultant agrees
that in the event it becomes necessary for him to devote more than eighty (80) hours in any
calendar month to performing services under this Agreement, Consultant will obtain approval
from Williams’ Chief Executive Officer and the Executive Officer Team member for whom the
services are being provided prior to providing such services. Consultant shall determine the
time and location at which he shall perform such services, subject to the right of the
Williams Representative to reasonably request by advance written notice that such services
be performed at a specific time and at a specific location. Consultant shall honor any such

11

 

request unless he is unable to perform due to his health, or he has a conflicting
business commitment that would preclude him from performing such services at the time and/or
place requested by the Williams Representative, and in such circumstances, shall make
reasonable efforts to arrange a mutually satisfactory alternative. Williams shall use its
reasonable best efforts not to require the performance of consulting services in any manner
that unreasonably interferes with any other business activity of Consultant.

     (c) Consultant shall not, solely by virtue of the consulting services provided
hereunder, be considered to be an officer or employee of any member of Williams during the
Consulting Period, and shall not have the power or authority to contract in the name of or
bind any member of Williams. Consultant shall at all times be treated as an independent
contractor and shall be responsible for the payment of all taxes with respect to all amounts
paid to him hereunder. Consultant shall not, by reason of the services performed hereunder,
be entitled to participate in any employee benefits plan, program or arrangement made
available to any employee of Williams.

     (d) This Agreement is personal to Consultant and all of the services required of
Consultant hereunder shall be performed personally by him.

     2. Consulting Fees. In accordance with its normal pay cycle, but not before the eighth
(8th) day following Consultant’s execution of this Agreement, Williams shall pay
Consultant the sum of Two Hundred Sixty Three Thousand Seven Hundred Fifty Eight Dollars
($263,758.00) (“Consulting Fee”) as consideration for executing this Agreement and providing the
services set forth hereunder. Consultant shall not be entitled to receive any other compensation,
bonuses or benefits provided to Williams’ employees in exchange for the services provided by
Consultant under the terms of this Agreement. However, Williams will reimburse Consultant for
reasonable and necessary travel expenses, including costs for transportation, meals and lodging
that Consultant may incur in connection with his performance of services under this Agreement.
During the Consulting Period, Consultant may also utilize Williams’ corporate aircraft for travel
necessary to his performance of services under this Agreement, subject to the approval of the
Williams Representative and the availability of the aircraft.

12

 

     3. Confidential Information. Consultant shall not, at any time during the Consulting
Period, make use of or disclose, directly or indirectly, any (i) trade secret or other confidential
or secret information of Williams or (ii) other technical, business, proprietary or financial
information of Williams not available to the public generally or to the competitors of Williams
(“Confidential Information”), except to the extent that such Confidential Information (a) becomes a
matter of public record or is published in a newspaper, magazine or other periodical available to
the general public, other than as a result of any act or omission of Consultant, (b) is required to
be disclosed by any law, regulation or order of any court or regulatory commission, department or
agency, provided that Consultant gives prompt notice of such requirement to Williams to enable
Williams to seek an appropriate protective order, or (c) is necessary to perform properly
Consultant’s duties under this Agreement. Promptly following the termination of the Consulting
Period, Consultant shall surrender to Williams all records, memoranda, notes, plans, reports,
computer tapes and software and other documents and data which constitute Confidential Information
which he may then possess or have under his control (together with all copies thereof).

     4. Exclusive Services/Non-solicitation.

     (a) Consultant acknowledges that during the Consulting Period he will become familiar
with trade secrets and other confidential information concerning Williams and that his
services will be of special, unique and extraordinary value to Williams.

     (b) Consultant agrees that during the Consulting Period he shall not in any manner,
directly or indirectly, through any person, firm or corporation, alone

13

 

or as a member of a partnership or as an officer, director, stockholder, investor or
employee of or consultant to any other corporation or enterprise or otherwise, engage or be
engaged, or assist any other person, firm corporation or enterprise in engaging or being
engaged, in any business, in which Consultant was involved or of which he has knowledge is
being conducted by Williams during the Consulting Period. Notwithstanding the provisions of
this subparagraph 4(b) to the contrary, Consultant may act as a director, stockholder,
investor or employee of or consultant to any corporation or enterprise with regard to the
business or businesses referred to above with the prior written consent of Williams, such
consent not to be unreasonably withheld.

     (c) Consultant further agrees that during the Consulting Period he shall not in any
manner, directly or indirectly, induce or attempt to induce any employee Williams to
terminate or abandon his or her employment for any purpose whatsoever.

     (d) Nothing in this Paragraph 4 shall prohibit Consultant from being (i) a stockholder
in a mutual fund or a diversified investment company or (ii) a passive owner of not more
than two percent (2%) of the outstanding stock of any class of a corporation, or any
securities of which are publicly traded, so long as Consultant has no active participation
in the business of such corporation.

     (e) If, at any time of enforcement of this Paragraph 4, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for

14

 

the stated period, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area permitted by law.
This Agreement shall not authorize a court to increase or broaden any of the restrictions in
this Paragraph.

     5. Hold Harmless. Consultant shall hold harmless Williams, its subsidiaries and
affiliates, and its and their respective shareholders, officers, directors, employees and attorneys
against any damage, injury, death, claim, loss, charge or expense (including, without limitation,
attorneys’ fees and court costs and the costs of investigation) of any party, including Consultant,
arising out of or relating to, or claimed to arise out of or relate to, Consultant’s gross
negligence or willful misconduct in performing under this Agreement.

     6. No Tax Advice. Consultant agrees and acknowledges that Williams has made no
representations to him regarding the tax consequences of the money paid pursuant to this Agreement,
and that he shall rely upon his own tax advice with respect to any taxes owed on any of such
monies. Consultant shall be solely responsible for the payment of any federal, state or local
taxes owed by Consultant as a result of his receipt of money or benefits provided to him by
Williams pursuant to this Agreement.

     7. Termination of the Consulting Services. Williams may terminate this Agreement at
any time prior to December 31, 2008, but the parties agree and acknowledge that Williams shall only
be entitled to a pro-rata refund of the Consulting Fee in the event that the Agreement is
terminated solely for cause, which shall be limited to either (i) the conviction of Consultant of a
felony which has a substantial effect on Williams’ business or reputation, or (ii) the continual
and repeated failure of

15

 

Consultant to perform the services required of him hereunder, after written notice of the alleged
failures and an opportunity to cure has been given. Consultant may only terminate this Agreement
due to a material breach hereof by Williams.

     8. No Waiver of Vested Benefits. Nothing in this Agreement shall be construed to
limit, reduce, offset or otherwise impair Consultant’s rights to any benefits or compensation
vested or accrued under the terms of the employee benefit plans, programs or arrangements
maintained by Williams other than those benefits that were released or waived by Consultant
pursuant to the Confidential Separation Agreement and Release dated April 2, 2008.

     9. Computer/Office Support and Access. During the Consulting Period, Williams shall
provide Consultant with office space at Williams’ principal place of business, which will include
telephone and computer access and administrative support. In addition, Williams shall provide and
maintain Consultant’s computer and access to Williams’ network and telephone systems via his home
office as shall be reasonably necessary for Consultant to provide the consulting services requested
by Williams during the Consulting Period and under the terms of this Agreement. At the termination
of the Consulting Period, Consultant shall return all of Williams’ property within his possession
to Williams.

     10. Enforcement. The parties hereto agree that Williams would be damaged irreparably
in the event that any provision of Paragraph 3 or 4 of this Agreement were not performed in
accordance with its terms or were otherwise breached and that money damages would be an inadequate
remedy for any such nonperformance or breach. Accordingly, Williams and its successors and
permitted assigns shall be entitled, in

16

 

addition to other rights and remedies existing in their favor, to an injunction or injunctions
to prevent any breach or threatened breach of any of such provisions and to enforce such provisions
specifically (without posting a bond or other security). Consultant agrees any litigation
concerning this Agreement or the facts or matters described herein shall be brought only in a court
of competent jurisdiction in Tulsa County, Tulsa, Oklahoma, and Consultant agrees that he will
submit himself to the personal jurisdiction of the courts of the State of Oklahoma in any action by
Williams to enforce the terms of this Agreement or to obtain injunctive or other relief.

     11. Miscellaneous. This Agreement may only be amended by a written instrument signed
by Williams and Consultant. Except as otherwise expressly provided hereunder, this Agreement shall
constitute the entire agreement between Williams and Consultant with respect to the subject matter
hereof The parties further agree and acknowledge that this Agreement constitutes the entire
agreement between the parties hereto pertaining to the facts and matters stated herein and
supersedes any and all prior understandings, agreements or representations or understandings,
whether written or oral, prior to the date hereof; provided, however, that this Agreement shall
have no effect on the enforceability or terms of the Confidential Separation Agreement and Release
dated April 2, 2008, or on the enforceability of any prior agreement relating to
non-solicitation, trade secrets, and/or confidentiality. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

     12. Notices. Any and all notices required to be sent pursuant to the terms of this
Agreement will be sent by registered or certified mail, or be personally delivered to

17

 

the parties hereto at the following addresses, or such other addresses as they may designate:

	 	 	 	 	 	 
	 

	 	Consultant:
	 	Michael P. Johnson
	 

	 	 
	 	 
	 	 	 	 	 
	 

	 	 	 	Tulsa, OK                
	 
	 	 	 	 
	 

	 	Company:
	 	The Williams Companies, Inc.
	 

	 	 	 	Attn: Vice President, Human Resources
	 

	 	 	 	One William Center
	 

	 	 	 	P. O. Box 2400

	 

	 	 	 	Tulsa, Oklahoma 74102

     13. Successor and Assigns. This Agreement shall be enforceable by Consultant and his
heirs, executors, administrators and legal representatives, and by Williams and its successors and
assigns.

     14. Survival. Paragraphs 3, 4, and 10 of this Agreement shall survive and continue in
full force and effect in accordance with their respective terms, notwithstanding any termination of
the Consulting Period.

     15. Governing Law. This Agreement shall be governed by the laws of the State of
Oklahoma, without reference to the principles of conflicts of law.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first written
above.

	 	 	 
	THE WILLIAMS COMPANIES, INC.
	 	 
	 
	 	 
	By: /s/ Steven J. Malcolm
	 	 
	 
	 	 
	Title: Chairman, President & CEO
	 	 
	 
	 	 
	 

	 	WITNESS:
	 
	 	 
	/s/ Michael P. Johnson

	 	/s/ Brenda Spencer
	Michael P. Johnson
	 	 

18

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