-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, eopkHuuDHp5xrWOJW/4YZy6+5Tv7+Zd4WsC9R+FC1lyEETcWo7Imf+fO2C8HxLS7 heOtvZXUX03HxtO56FHo7Q== 0000950134-95-000863.txt : 19950502 0000950134-95-000863.hdr.sgml : 19950502 ACCESSION NUMBER: 0000950134-95-000863 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19950501 EFFECTIVENESS DATE: 19950520 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WILLIAMS COMPANIES INC CENTRAL INDEX KEY: 0000107263 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION [4922] IRS NUMBER: 730569878 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-58971 FILM NUMBER: 95533370 BUSINESS ADDRESS: STREET 1: ONE WILLIAMS CTR CITY: TULSA STATE: OK ZIP: 74172 BUSINESS PHONE: 9185882000 MAIL ADDRESS: STREET 1: ONE WILLIAM CENTER CITY: TULSA STATE: OK ZIP: 74172 FORMER COMPANY: FORMER CONFORMED NAME: WILLIAMS BROTHERS COMPANIES DATE OF NAME CHANGE: 19710817 S-8 1 FORM S-8 1 As filed with the Securities and Exchange Commission on May 1, 1995 Registration No. 33-_____ =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM S-8 REGISTRATION STATEMENT under THE SECURITIES ACT OF 1933 -------------------- THE WILLIAMS COMPANIES, INC. (Exact name of issuer as specified in its charter) Delaware 73-0569878 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Williams Center 74172 Tulsa, Oklahoma (Zip Code) (Address of principal executive offices) -------------------- TRANSCO ENERGY COMPANY THRIFT PLAN (Full title of plan) -------------------- DAVID M. HIGBEE, ESQ. The Williams Companies, Inc. One Williams Center Tulsa, OK 74172 (918) 588-2000 (Name, address and telephone number of agent for service) -------------------- CALCULATION OF REGISTRATION FEE
============================================================================================================= Proposed Proposed Maximum Maximum Title of Amount Offering Aggregate Amount of Securities to to be Price Offering Registration be Registered Registered Per Unit(1) Price(2) Fee - ------------------------------------------------------------------------------------------------------------- Common Stock, ($1 par value) 1,000,000(3) $30 3/4 $30,750,000 $10,604 =============================================================================================================
(1) Estimated based on the reported New York Stock Exchange composite transactions closing price on April 19, 1995. (2) Estimated solely for the purpose of calculating the filing fee. (3) Includes one-half of a Right issuable under the terms of The Williams Companies, Inc. Rights Plan for each share of stock. =============================================================================== 2 PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents are hereby incorporated by reference and made a part of this prospectus: (a) (1) The Williams Companies, Inc. (the "Company" or "Williams"), Annual Report on Form 10-K for the fiscal year ended December 31, 1994. (2) The Transco Energy Company Thrift Plan's (the "Plan") Annual Report on Form 11-K for the fiscal year ended December 31, 1993. (b) Williams Current Reports on Form 8-K, dated January 5, 1995, January 11, 1995, and Form 8-K/A, dated March 29, 1995, excluding Item 8 of Transco Energy Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994, which is incorporated by reference in the Form 8-K/A. (c) The Company is authorized to issue 240,000,000 shares of Common Stock, $1.00 par value per share. As of March 24, 1995, 91,028,261 shares of Common Stock were outstanding. The following description of the shares of Common Stock does not purport to be complete and is qualified in its entirety by reference to the pertinent sections of the Company's Restated Certificate of Incorporation, as amended, which is incorporated by reference in this Registration Statement. Holders of Common Stock are entitled to dividends as declared by the Board of Directors. Certain of the Company's loan agreements contain provisions restricting the payment of dividends. Under the most restrictive of such provisions, the Company had approximately $565 million available at December 31, 1994, for the payment of dividends. Debt instruments of certain subsidiaries of the Company limit the amount of dividend payments to the Company which may adversely impact the funds available to the Company to pay dividends on its Common Stock. Subject to the rights of the holders of any outstanding shares of Preferred Stock, holders of Common Stock are entitled to cast one vote for each share held of record on all matters. Voting securities do not have cumulative voting rights. This means that the holders of more than 50 percent of the voting power of all securities outstanding voting for the election of directors can elect 100 percent of the directors if they choose to do so; and in such event, the holders of the remaining voting power will not be able to elect any person or persons to the Board of Directors. Stockholders have no preemptive or subscription rights upon the issuance of additional shares of the Company's stock of any class or series. Upon liquidation or dissolution of the Company, whether voluntary or involuntary, the holders of Common Stock are entitled to share ratably in the assets of the Company available for distribution after provision for creditors and holders of preferred stock. All of the issued and outstanding Common Stock is duly authorized, validly issued, fully paid and will not be subject to further calls or assessments. ANTITAKEOVER PROVISIONS The provisions of the Company's Restated Certificate of Incorporation, as amended, summarized in the succeeding paragraphs may be deemed to have an antitakeover effect and may delay a tender offer or takeover attempt which a stockholder might consider in such stockholder's best interest, including those attempts which 3 might result in a premium over the market price for the shares held by stockholders. The Board of Directors of the Company is divided into three classes. Members of each class are elected for three-year terms. Stockholders may only remove any one or all of the directors for cause and by an affirmative vote of 75 percent of the voting power of the stock. The Restated Certificate of Incorporation, as amended, provides that the approval of 75 percent of the voting power of the stock is required for the authorization of certain mergers and sales or leases of substantial parts of the assets of the Company. The affirmative vote of 75 percent of the voting power of the stock is required to amend the provisions of the Restated Certificate of Incorporation, as amended, referred to in the preceding two paragraphs. On January 26, 1986, the Board of Directors of the Company declared a dividend distribution of 0.5 Right for each outstanding share of Common Stock. Each Right entitles the registered holder to purchase from the Company a unit consisting of one two-hundredth of a share (a "Unit") of Series A Junior Participating Preferred Stock, par value $1 per share (the "Junior Preferred Stock"), at a price of $75 per Unit, subject to adjustment (the "Purchase Price"). This description of the Rights is qualified in its entirety by reference to the Amended and Restated Rights Agreement, dated as of July 12, 1988, between Williams and First Chicago Trust Company of New York (the "Rights Agreement") which is incorporated herein by reference and which is an exhibit to this Registration Statement. The Rights attach to all Common Stock certificates representing outstanding shares. No separate Rights certificates have been distributed. The Rights will separate from the Common Stock and a Distribution Date will occur upon the earliest of (i) ten days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of 20 percent or more of the outstanding shares of Common Stock (the "Stock Acquisition Date"), (ii) ten business days following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 30 percent or more of such outstanding shares, or (iii) ten business days after the Board of Directors of the Company determines any person, alone or together with its affiliates and associates, has become the beneficial owner of an amount of Common Stock which the Board of Directors determines to be substantial (which amount shall in no event be less than 10 percent of the shares of Common Stock outstanding) and at least a majority of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, including consultation with such persons as such directors shall deem appropriate, shall determine that (a) such beneficial ownership by such person is intended to cause the Company to repurchase the Common Stock beneficially owned by such persons or to cause pressure on the Company to take action or enter into a transaction or series of transactions intended to provide such person with short-term financial gain under circumstances where the Board of Directors determines that the best long-term interests of the Company and its stockholders would not be served by taking such action or entering into such transactions or series of transactions at that time or (b) such beneficial ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive -2- 4 position) on the business or prospects of the Company (any such person being referred to herein and in the Rights Agreement as an "Adverse Person"). Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates will contain a notation incorporating the Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. As soon as practicable following the Distribution Date, Rights certificates will be mailed to holders of record of Common Stock as of the close of business on the Distribution Date and, thereafter, such separate Rights certificates alone will evidence the Rights. Except as otherwise determined by the Board of Directors and as described in the Rights Agreement, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights. Pursuant to the Rights Agreement, the Company reserves the right to require prior to the occurrence of a Triggering Event (as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Junior Preferred Stock will be issued. The Rights are not exercisable until the Distribution Date and will expire at the close of business on February 6, 1996, unless earlier redeemed by the Company as described below. In the event that, at any time following the Distribution Date, (i) a Person becomes the beneficial owner of more than 20 percent of the then outstanding shares of Common Stock (except pursuant to an offer for all outstanding shares of Common Stock which the independent directors determine to be fair to and otherwise in the best interests of the Company and its stockholders) or (ii) the Board of Directors determines that a Person is an Adverse Person, each holder of a Right will thereafter have the right to receive, upon exercise, Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of the foregoing, following the occurrence of any of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person or Adverse Person shall immediately become null and void. However, Rights are not exercisable following the occurrence of either of the events set forth above until such time as the Rights are no longer redeemable by the Company as set forth below. In the event that, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the surviving corporation (other than a merger which follows an offer described in the preceding paragraph) or (ii) 50 percent or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as set forth above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right. The events set forth in this paragraph and the preceding paragraph are referred to as the "Triggering Events." The Purchase Price payable, and the number of Units of Junior Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Junior Preferred Stock; (ii) if holders of the Junior Preferred Stock are -3- 5 granted certain rights or warrants to subscribe for Junior Preferred Stock or convertible securities at less than the current market price of the Junior Preferred Stock; or (iii) upon the distribution to holders of the Junior Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1 percent of the Purchase Price. No fractional Units will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Junior Preferred Stock on the last trading date prior to the date of exercise. At any time until ten days following the Stock Acquisition Date, the Company may redeem the Rights in whole, but not in part, at a price of $.05 per Right (the "Redemption Price"), payable in cash, Common Stock or other consideration deemed appropriate by the Board of Directors. Immediately upon the action of the Board of Directors of the Company ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. While the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Common Stock (or other consideration) of the Company or for common stock of the acquiring company as set forth above. Other than those provisions relating to the principal economic terms of the Rights, any of the provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board in order to cure any ambiguity, to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person or Adverse Person), or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment to adjust the time period governing redemption shall be made at such time as the Rights are not redeemable. Under the Company's Restated Certificate of Incorporation, as amended, the Company is authorized to issue up to 30,000,000 shares of Preferred Stock, par value $1.00 per share, in one or more series. The following description of Preferred Stock sets forth certain general terms and provisions of the series of Preferred Stock to which any Prospectus Supplement may relate. Certain other terms of a particular series of Preferred Stock will be described in the Prospectus Supplement relating to such series of Preferred Stock. If so indicated in the Prospectus Supplement relating thereto, the terms of any such series of Preferred Stock may differ from the terms set forth below. The description of Preferred Stock set forth below and the description of the terms of a particular series of Preferred Stock set forth in the Prospectus Supplement relating thereto do not purport to be complete and are qualified in their entirety by reference to the Restated Certificate of Incorporation, as amended, and to the certificate of designation relating to that series. -4- 6 As of March 31, 1995, there were 3,630,100 shares of the Company's $2.21 Cumulative Preferred Stock outstanding with a liquidation preference of $25 per share. The Preferred Stock will rank senior to the Company's Junior Preferred Stock as to dividends and amounts payable upon liquidation. The rights of the holders of each series of Preferred Stock will be subordinate to those of the Company's general creditors. All reports subsequently filed by Williams pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The consolidated financial statements and schedules of the Company appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1994, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. The financial statements and schedules referred to above are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in auditing and accounting. The financial statements and schedules of the Transco Energy Company Thrift Plan as of December 31, 1993 and 1992 and for the years then ended incorporated by reference in this Registration Statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are included herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. The reports of independent auditors relating to the audited consolidated financial statements and schedules of the Company in any documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering to the extent covered by consents thereto filed with the Securities and Exchange Commission will be incorporated by reference in reliance upon the authority of such independent auditors as experts in auditing and accounting. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company is empowered by Section 145 of the General Corporation Law of the State of Delaware, subject to the procedures and limitations stated therein, to indemnify any person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed action, suit or proceeding in which such person is made a party by reason of such person being or having been a director, officer, employee or agent of the Company. The statute provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise. The By-laws of the Company provide for indemnification by the Company of its directors and officers to the fullest extent permitted by the General Corporation Law of the State of Delaware. In addition, the Company has entered into indemnity agreements with its directors and certain officers providing for, among other things, the indemnification of and the advancing of expenses to such individuals to the fullest extent permitted by law, and, to the extent insurance is maintained, for the continued coverage of such individuals. Policies of insurance are maintained by the Company under which the directors and officers of the Company are insured, within the limits and subject to the limitations of the policies, against certain expenses in connection with the defense of actions, suits or proceedings, and certain liabilities which might -5- 7 be imposed as a result of such actions, suits or proceedings, to which they are parties by reason of being or having been such directors or officers. -6- 8 ITEM 8. EXHIBITS. *(4.1) -- Restated Certificate of Incorporation of Williams (filed as Exhibit 4(a) to Form 8-B Registration Statement, filed August 20, 1987). *(4.2) -- Certificate of Designation with respect to the $2.21 Cumulative Preferred Stock (filed as Exhibit 4.3 to Form S-3 Registration Statement No. 33-50970, filed August 19, 1992). *(4.3) -- Certificate of Increase of Authorized Number of Shares of Series A Junior Participating Preferred Stock (filed as Exhibit 3(c) to Form 10-K for the year ended December 31, 1988). *(4.4) -- Certificate of Amendment of Restated Certificate of Incorporation, dated May 20, 1994 (filed as Exhibit 3(d) to Form 10-K for the fiscal year ended December 31, 1994). *(4.5) -- Form of Certificate of Designation, Preferences and Rights with respect to the $3.50 Cumulative Convertible Preferred Stock (filed as a part of Annex A to Form S-4 Registration Statement No. 33-57639, filed February 9, 1995). *(4.6) -- Amended and Restated Rights Agreement, dated as of July 12, 1988, between Williams and First Chicago Trust Company of New York (filed as Exhibit 4(c) to Williams Form 8, dated July 28, 1988). *(4.7) -- By-laws of Williams (filed as Exhibit 3 to Form 10-Q for the quarter ended September 30, 1993). *(4.8) -- Form of Senior Debt Indenture between the Company and Chemical Bank, Trustee, relating to the 10 1/4% Debentures, due 2020; the 9 3/8% Debentures, due 2021; the 8 1/4% Notes, due 1998; Medium- Term Notes (8.50%-9.31%), due 1996 through 2001; the 7 1/2% Notes, due 1999, and the 8 7/8% Debentures, due 2012 (filed as Exhibit 4.1 to Form S-3 Registration Statement No. 33-33294, filed February 2, 1990). *(4.9) -- U.S. $800,000,000 Credit Agreement, dated as of February 23, 1995, among Williams and certain of its subsidiaries and the banks named therein and Citibank, N.A., as agent (filed as Exhibit 4(b) to Form 10-K for the year ended December 31, 1994). (4.10) -- 6% Convertible Subordinated Debenture Due 2005 and Warrant to Purchase Common Stock issued to Williams Holdings of Delaware, Inc. on April 15, 1995. (5.1) -- Opinion and Consent of David M. Higbee, Esq., Secretary and Counsel for the Company, relating to the validity of the securities. (23.1) -- Consent of David M. Higbee (contained in Exhibit 5.1). (23.2) -- Consent of Ernst & Young LLP. (23.3) -- Consent of Arthur Andersen LLP. (24.1) -- Power of Attorney. (24.2) -- Certified copy of resolution authorizing signatures pursuant to Power of Attorney. (99) -- The Transco Energy Company Thrift Plan (34th Amendment).
_______________________________ * The exhibits have heretofore been filed with the Securities and Exchange Commission as part of the filing indicated and are incorporated herein by reference. -7- 9 ITEM 9. UNDERTAKINGS. (a) Rule 415 offering. Include the following if the securities are registered pursuant to Rule 415 under the Securities Act: The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, That paragraphs (a)(1)(i) and (a)(1)(ii) of this Section do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or -8- 10 paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. -9- 11 SIGNATURES The Registrant. Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Tulsa and State of Oklahoma on the 1st day of May, 1995. THE WILLIAMS COMPANIES, INC. (Registrant) By s/David M. Higbee --------------------------- (David M. Higbee, Attorney-in-fact) Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on May 1, 1995:
SIGNATURE TITLE --------- ----- * Chairman of the Board, President - -------------------------- and Chief Executive Officer) Keith E. Bailey (Principal Executive Officer) * Senior Vice President - -------------------------- (Principal Financial Officer) Jack D. McCarthy * Controller - -------------------------- (Principal Accounting Officer) Gary R. Belitz * Director - -------------------------- Harold W. Andersen * Director - -------------------------- Ralph E. Bailey * Director - -------------------------- Glenn A. Cox * Director - -------------------------- Thomas H. Cruikshank * Director - -------------------------- Ervin S. Duggan * Director - -------------------------- Robert J. LaFortune * Director - -------------------------- James C. Lewis
-10- 12 * Director - -------------------------- Jack A. MacAllister * Director - -------------------------- James A. McClure * Director - -------------------------- Peter C. Meinig * Director - -------------------------- Kay A. Orr * Director - -------------------------- Gordon R. Parker * Director - -------------------------- Joseph H. Williams *By s/David M. Higbee ----------------------------------- (David M. Higbee, Attorney-in-fact)
-11- 13 SIGNATURES The Plan. Pursuant to the requirements of the Securities Act of 1933, the plan has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Tulsa and State of Oklahoma on the 1st day of May, 1995. TRANSCO ENERGY COMPANY THRIFT PLAN ADMINISTRATIVE COMMITTEE By /s/ John C. Fischer ---------------------- John C. Fischer -12- 14 INDEX TO EXHIBITS *(4.1) -- Restated Certificate of Incorporation of Williams (filed as Exhibit 4(a) to Form 8-B Registration Statement, filed August 20, 1987). *(4.2) -- Certificate of Designation with respect to the $2.21 Cumulative Preferred Stock (filed as Exhibit 4.3 to Form S-3 Registration Statement No. 33-50970, filed August 19, 1992). *(4.3) -- Certificate of Increase of Authorized Number of Shares of Series A Junior Participating Preferred Stock (filed as Exhibit 3(c) to Form 10-K for the year ended December 31, 1988). *(4.4) -- Certificate of Amendment of Restated Certificate of Incorporation, dated May 20, 1994 (filed as Exhibit 3(d) to Form 10-K for the fiscal year ended December 31, 1994). *(4.5) -- Form of Certificate of Designation, Preferences and Rights with respect to the $3.50 Cumulative Convertible Preferred Stock (filed as a part of Annex A to Form S-4 Registration Statement No. 33-57639, filed February 9, 1995). *(4.6) -- Amended and Restated Rights Agreement, dated as of July 12, 1988, between Williams and First Chicago Trust Company of New York (filed as Exhibit 4(c) to Williams Form 8, dated July 28, 1988). *(4.7) -- By-laws of Williams (filed as Exhibit 3 to Form 10-Q for the quarter ended September 30, 1993). *(4.8) -- Form of Senior Debt Indenture between the Company and Chemical Bank, Trustee, relating to the 10 1/4% Debentures, due 2020; the 9 3/8% Debentures, due 2021; the 8 1/4% Notes, due 1998; Medium- Term Notes (8.50%-9.31%), due 1996 through 2001; the 7 1/2% Notes, due 1999, and the 8 7/8% Debentures, due 2012 (filed as Exhibit 4.1 to Form S-3 Registration Statement No. 33-33294, filed February 2, 1990). *(4.9) -- U.S. $800,000,000 Credit Agreement, dated as of February 23, 1995, among Williams and certain of its subsidiaries and the banks named therein and Citibank, N.A., as agent (filed as Exhibit 4(b) to Form 10-K for the year ended December 31, 1994). (4.10) -- 6% Convertible Subordinated Debenture Due 2005 and Warrant to Purchase Common Stock issued to Williams Holdings of Delaware, Inc. on April 15, 1995. (5.1) -- Opinion and Consent of David M. Higbee, Esq., Secretary and Counsel for the Company, relating to the validity of the securities. (23.1) -- Consent of David M. Higbee (contained in Exhibit 5.1). (23.2) -- Consent of Ernst & Young LLP. (23.3) -- Consent of Arthur Andersen LLP. (24.1) -- Power of Attorney. (24.2) -- Certified copy of resolution authorizing signatures pursuant to Power of Attorney. (99) -- The Transco Energy Company Thrift Plan (34th Amendment).
_______________________________ * The exhibits have heretofore been filed with the Securities and Exchange Commission as part of the filing indicated and are incorporated herein by reference. EX-4.10 2 6% CONVERTIBLE SUBORDINATED DEBENTURES & WARRANTS 1 EXHIBIT 4.10 THE WILLIAMS COMPANIES, INC. 6% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2005 No. 1 $360,000,000 Principal Amount 6% Convertible Subordinated Debentures Due 2005 The Williams Companies, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), for value received, hereby promises to pay to Williams Holdings of Delaware, Inc. ("Williams Holdings"), or registered assigns, the principal sum of THREE HUNDRED SIXTY MILLION DOLLARS ($360,000,000) on April 15, 2005, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semiannually on October 15 and April 15 of each year, commencing October 15, 1995, on said principal sum in like coin or currency, at the rate per annum specified in the title of this Convertible Subordinated Debenture from April 15, 1995, until payment of said principal sum has been made or duly provided for; that payment of interest shall be made by check mailed to the address of Williams Holdings as such address may be indicated to the Company in writing from time to time. The indebtedness represented by this Convertible Subordinated Debenture and the payment of principal of and interest thereon is subordinated in right of payment to the prior payment in full of senior indebtedness of the Company. Reference is made to the further provisions of this Convertible Subordinated Debenture set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. 2 (Reverse Side) No reference in this Convertible Subordinated Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Convertible Subordinated Debenture in the manner, at the respective times, at the rate and in the coin or currency herein prescribed. This Convertible Subordinated Debentures may be redeemed, at the option of the Company, as a whole or from time to time in part, at any time after April 15, 2000, and prior to maturity, upon the notice referred to below, at the following redemption prices (expressed in percentages of the principal amount) together with accrued interest to the date fixed for redemption:
If Redeemed during the 12-Month Period Percentage of beginning April 15 Principal Amount ------------------- ---------------- 2000 . . . . . . . . . . . . . . . . . . . . . . 103.0 2001 . . . . . . . . . . . . . . . . . . . . . . 102.4 2002 . . . . . . . . . . . . . . . . . . . . . . 101.8 2003 . . . . . . . . . . . . . . . . . . . . . . 101.2 2004 . . . . . . . . . . . . . . . . . . . . . . 100.6 2005 . . . . . . . . . . . . . . . . . . . . . . 100.0
Notice of redemption shall be given to Williams Holdings of Convertible Subordinated Debentures to be redeemed as a whole or in part, by mailing a notice of such redemption not less than thirty nor more than sixty days prior to the date fixed for redemption. Subject to and upon compliance with the terms hereof, at the option of Williams Holdings, any Convertible Subordinated Debenture may, at any time prior to the close of business on April 15, 2005, (unless the Convertible Subordinated Debentures have been called for redemption), be converted into duly authorized, validly issued, fully paid and nonassessable shares of Common Stock of the Company, at the rate of 25.9185 shares of Common Stock for each $1,000 principal amount of Convertible Subordinated Debentures, or, in case an adjustment in the conversion rate has taken place, at the then applicable conversion rate as adjusted. In order to exercise the conversion privilege, Williams Holdings shall deliver such Convertible Subordinated Debenture to the Company together with the notice of election to convert set out below. A conversion into Common Stock shall be deemed to have been effected immediately prior to the close of business on the day on which such conversion notice shall have been received by the Company and such Convertible Subordinated Debenture shall have been delivered as aforesaid, and at such time the rights of the holder of such Convertible Subordinated Debenture shall cease, and the 3 person or persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable or deliverable upon conversion shall be treated for all purposes as the record holder or holders of such Common Stock at such time; provided, however, that no such delivery on any date when the stock transfer books of the Company shall be closed shall be effective to constitute the person or persons entitled to receive shares of Common Stock upon such conversion as the record holder or holders of such shares of Common Stock on such date, but such delivery shall be effective to constitute the person or persons entitled to receive such shares of Common Stock as the record holder or holders thereof for all purposes on the next succeeding day on which such stock transfer books are open. As promptly as practicable after the receipt of such conversion notice and the delivery of such Convertible Subordinated Debenture as aforesaid, the Company shall cause to be issued and delivered to Williams Holdings, a certificate or certificates for the number of duly authorized, validly issued, fully paid and nonassessable full shares of Common Stock issuable or deliverable upon conversion of such Convertible Subordinated Debenture. No payment or adjustment shall be made upon any conversion on account of any interest accrued on the Convertible Subordinated Debentures surrendered for conversion or on account of any dividends on the Common Stock issued or delivered upon conversion. No fractional shares of Common Stock shall be issued or delivered upon conversions of Convertible Subordinated Debentures. If the conversion of any Convertible Subordinated Debentures would result in the issuance of a fractional share, an amount equal to such fraction multiplied by the closing price of the Common Stock reported as New York Stock Exchange Composite Transactions (the "Closing Price"), on the date on which conversion becomes effective shall be paid in cash by the Company which is expressly authorized to value fractional shares without actual purchase or sale on the basis of such Closing Price of the Common Stock. The rate at which Convertible Subordinated Debentures may be converted into shares of Common Stock, in effect at any time, shall be subject to adjustment as follows: (a) In case the Company shall (a) pay or make a dividend or other distribution on its Common Stock in stock of the Company, (b) subdivide its outstanding shares of Common Stock, (c) combine the outstanding shares of its Common Stock into a smaller number of shares, or (d) issue by reclassification of its Common Stock (whether pursuant to a merger or consolidation or otherwise) any shares of stock of the Company, then the holder of any Convertible Subordinated Debenture shall be entitled to receive, upon the conversion of such Convertible Subordinated Debenture, the number of shares of stock of the Company which he would have owned or have been entitled to receive after the happening of any of the events described above had such Convertible Subordinated Debenture been converted immediately prior to the happening of such 4 event. Such adjustment shall be made whenever any of the events listed above shall occur. An adjustment made pursuant to this subsection (a) shall become effective retroactively, as of immediately after the opening of business on the day following the record date for the determination of the shareholders entitled to receive such dividend or other distribution, with respect to conversions made subsequent to the record date in the case of a dividend or other distribution, and shall become effective immediately after the opening of business on the day following the effective date in the case of a subdivision, combination or reclassification. (b) In case the Company shall issue rights or warrants to the holders of its Common Stock as such (other than pursuant to any dividend reinvestment or similar plan entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the current market price per share of the Common Stock (as defined in subsection (d) below)) on the record date for determination of shareholders entitled to receive such rights or warrants, then in each such case the number of shares of Common Stock into which each $1,000 principal amount of Convertible Subordinated Debentures shall thereafter be convertible shall be determined by multiplying the number of shares of Common Stock into which such principal amount of Convertible Subordinated Debentures was theretofore convertible by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and the denominator of which shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants plus the number of shares which the aggregate offering price of the total number of shares so offered would purchase at such current market price per share of Common Stock. For the purposes of this subsection (b), the issuance of rights or warrants to subscribe for or purchase stock or securities convertible into shares of Common Stock shall be deemed to be the issuance of rights or warrants to purchase the shares of Common Stock into which such stock or securities are convertible at an aggregate offering price equal to the aggregate offering price of such stock or securities plus the minimum aggregate amount (if any) payable upon conversion of such stock or securities into Common Stock. Such adjustment shall be made whenever any such rights or warrants are issued, and shall become effective retroactively with respect to conversions made subsequent to the record date for determination of shareholders entitled to receive such rights or warrants. For the purposes of this subsection (b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not issue any rights or warrants in respect of 5 shares of Common Stock held in the treasury of the Company except with respect to any dividend reinvestment or similar plan. (c) In case the Company shall distribute to holders of its Common Stock (whether pursuant to a reclassification, merger or consolidation or otherwise) evidences of its indebtedness or assets, then in each such case the number of shares of Common Stock into which each $1,000 principal amount of Convertible Subordinated Debentures shall thereafter be convertible shall be determined by multiplying the number of shares of Common Stock into which such principal amount of Convertible Subordinated Debentures was theretofore convertible by a fraction, the numerator of which shall be the current market price per share of the Common Stock (as defined in subsection (d) below) on the record date for determination of shareholders entitled to receive such distribution, and the denominator of which shall be such current market price per share of the Common Stock less the fair value (as determined by the Board of Directors of the Company, whose determination shall be conclusive, and described in an officers certificate) of the portion of the assets or evidences of indebtedness so distributed or of such subscription rights applicable to one share of the Common Stock. Such adjustment shall be made whenever any such distribution is made. An adjustment made pursuant to this subsection (c) shall become effective retroactively, as of immediately prior to the opening of business on the day following the record date for the determination of shareholders entitled to receive such distribution, with respect to conversions made subsequent to the record date in the case of a distribution other than pursuant to a reclassification, and shall become effective immediately prior to the opening of business on the day following the effective date in the case of a reclassification. (d) For the purposes of any computation hereunder, the current market price per share of Common Stock on any date shall be deemed to be the average of the daily Closing Prices for the 30 consecutive full trading days commencing 45 full trading days before the day in question. For the purposes of this subsection (d), the term "trading day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which securities are not traded on the principal United States market for the Company's Common Stock. (e) No adjustment in the conversion rate shall be required unless such adjustment (plus any adjustments not previously made by reason of this subsection (e)) would require an increase or decrease of at least 1 percent in such rate; provided, however, that any adjustments which by reason of this subsection (e) are not required to be made shall be carried forward and taken into account in any subsequent 6 adjustment. All calculations hereunder shall be made to the nearest one-hundred thousandth of a share. (f) The certificate of any independent firm of public accountants of recognized standing selected by the Board of Directors shall be evidence of the correctness of any computation made hereunder. (g) Anything hereunder to the contrary notwithstanding, the Company shall be entitled to make such adjustments in the conversion rate, in addition to those hereinabove required, as shall be determined by the Board of Directors to be advisable in order to avoid taxation so far as practicable of any dividend or distribution of stock or subdivision, reclassification or combination of stock, issuance of rights or warrants, or any similar transaction or any event treated as a distribution of stock or stock rights to its shareholders for United States federal income tax purposes to the recipients. In case of any consolidation or merger of the Company with any other corporation (regardless of which corporation is the survivor of the merger), as a result of which holders of Common Stock shall be entitled to receive stock, cash, securities or property with respect to or in exchange for Common Stock, or in case of any sale or transfer of all or substantially all of the property and assets of the Company, the Company (if it is the survivor of the merger), the corporation formed by such consolidation or with which the Company shall have been merged or the person which shall have acquired by sale or transfer such property and assets, as the case may be, shall provide that the holder of each Convertible Subordinated Debenture then outstanding shall have the right, during the period such Convertible Subordinated Debenture shall be convertible as specified herein, to convert such Convertible Subordinated Debenture into the kind and amount of securities (which may continue to be Common Stock, depending on the terms of the transaction), cash or property receivable upon such consolidation, merger, sale or transfer by a holder of the number and kind of shares of Common Stock of the Company into which such Convertible Subordinated Debenture might have been converted immediately prior to such consolidation, merger, sale or transfer. The Company covenants and agrees that it will at all times have and keep available out of its Common Stock (whether authorized but unissued shares reserved by it free from preemptive rights or issued shares which have been reacquired by it) the number of full shares of Common Stock which shall from time to time be deliverable upon the conversion of all outstanding Convertible Subordinated Debentures as provided herein; provided, however, that such number of shares of Common Stock to be kept available by the Company may be reduced by the number of shares of Common Stock no longer required as the result of the redemption of Convertible Subordinated Debentures pursuant to the terms hereof, computed as 7 if at the time of computation all outstanding Convertible Subordinated Debentures were held by a single holder. The Company shall in good faith and as promptly as possible endeavor to cause all registrations with, and to obtain any approval by, any governmental authority under any Federal or state law of the United States of America that may be required before the shares of Common Stock may be lawfully issued or transferred and to list the shares of Common Stock required to be delivered upon conversion of Convertible Subordinated Debentures prior to such delivery on each United States national securities exchange on which the outstanding Common Stock is listed at the time of such delivery. NOTICE OF ELECTION TO CONVERT The undersigned holder of this certificate hereby irrevocably exercises the option to convert $________ principal amount of Convertible Subordinated Debentures evidenced by this certificate into such number of shares of Common Stock of The Williams Companies, Inc., as provided under the terms hereof, and directs that the shares deliverable upon the conversion be registered in the name of and delivered, together with a check in payment for any fractional share, to the undersigned unless a different name has been indicated below. If shares are to be registered in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. If the principal amount of Convertible Subordinated Debentures indicated above is less than the principal amount of such Convertible Subordinated Debentures evidenced by this certificate, the undersigned directs that the Company issue to the undersigned, unless a different name is indicated below, a new certificate evidencing the balance of the principal amount of the Convertible Subordinated Debentures not surrendered hereby. 8 Dated: Fill in for registration of Shares if to be delivered other than to and in the name of the Registered Holder: Name__________________________________________________________ (Please Print Name and Address) _________________________________________________________ Social Security or other Taxpayer Identification Number Signature_____________________________________________________ Name_____________________________________________________ Address_______________________________________________________ Address__________________________________________________ NOTE: The above signature should correspond exactly with the name on the face of this Certificate or with the name of assignee appearing in assignment form below. The Williams Companies, Inc. By /s/ Jack D. McCarthy __________________________ Jack D. McCarthy Senior Vice President ATTEST: /s/ David M. Higbee __________________________ David M. Higbee Secretary
9 EXHIBIT 4.10 THE WILLIAMS COMPANIES, INC. WARRANTS TO PURCHASE Common Stock, $1 par value VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON APRIL 15, 2000 No. 1 7,537,147 Warrants This certifies that Williams Holdings of Delaware, Inc. or assigns (the "Holder") is the owner of the above indicated number of Warrants, each Warrant entitling such owner to purchase on April 15, 2000, on or before 5:00 P.M., New York City time (the "Exercise Date"), one share of Common Stock, $1 par value of The Williams Companies, Inc. (the "Company"), such Common Stock being herein referred to as the "Warrant Securities". The Warrants may be surrendered by the Holder for Warrant Securities on the Exercise Date upon payment of $46.67 for each Warrant so surrendered (the "Warrant Price"). The Holder may exercise the Warrants evidenced hereby by providing certain information set forth on the back hereof and by paying in full, in lawful money of the United States of America in immediately available funds the Warrant Price for each Warrant exercised to the Company and by surrendering this Warrant Certificate, with the form of election to purchase on the reverse hereof completed and duly executed, at the corporate offices of the Company at the address specified on the reverse hereof, and upon compliance with and subject to the conditions set forth herein. Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Securities. No fractional Warrant Securities will be issued. The Warrant Securities to be issued and delivered upon the exercise of the Warrants evidenced by this Warrant Certificate will be, when issued, duly authorized, fully paid and nonassessable shares of the Common Stock of the Company. The Company covenants and agrees that it will at all times have and keep available out of its Common Stock (whether authorized but unissued shares reserved by it free from preemptive rights or issued shares which have been reacquired by it) the number of full shares of Common Stock which shall be deliverable upon exercise of the Warrants. The Company shall in good faith and as promptly as possible endeavor (i) to cause all registrations with, and to obtain any approval by, any governmental authority under any Federal or state law of the United States of America that may be required before the Warrant Securities may be lawfully issued or transferred and delivered and (ii) to list the Warrant Securities required to be delivered upon exercise of the Warrants prior to such delivery on each United States national securities exchange on which the 10 outstanding Warrant Securities are listed at the time of such delivery. This Warrant Certificate may be transferred only at the corporate offices of the Company by the Holder or its assigns, in person or by an attorney duly authorized in writing. This Warrant Certificate shall not entitle the Holder hereof to any of the rights of a holder of the Warrant Securities, including, without limitation, the right to vote or to receive dividends, if any, declared and paid on the Warrant Securities. Dated as of April 15, 1995. THE WILLIAMS COMPANIES, INC. [SEAL] By /s/ Jack D. McCarthy --------------------------- Jack D. McCarthy Senior Vice President Attest: /s/ David M. Higbee - ------------------------- David M. Higbee Secretary 11 [Reverse of Warrant Certificate] Instructions for Exercise of Warrant To exercise the Warrants evidenced hereby, the Holder must pay in full in lawful money of the United States of America in immediately available funds, the Warrant Price for Warrants exercised to the Company, One Williams Center, Tulsa, Oklahoma 74172, Attention: Treasury Department, which payment must specify the name of the Holder and the number of Warrants exercised by such Holder. In addition, the Holder must complete the information required below and present this Warrant Certificate in person or by mail (certified or registered mail is recommended) to the Company at the address set forth above. This Warrant Certificate, completed and duly executed, must be received by the Company within five business days of the payment. To be Executed Upon Exercise of Warrant The undersigned hereby irrevocably elects to exercise _____ Warrants, evidenced by this Warrant Certificate, to purchase shares of the Warrant Securities and represents that he/she has tendered payment for such Warrant Securities in lawful money of the United States of America in immediately available funds to the order of the Company, One Williams Center, Tulsa, Oklahoma 74172, Attention: Treasury Department, in the amount of __________ in accordance with the terms hereof. The undersigned requests that said Warrant Securities be registered in such names and delivered all as specified in accordance with the instructions set forth below. Dated__________________ Name_______________________________ (Please Print) _______________________ Address____________________________ (Insert Social Security or Other Identifying ____________________________ Number of Holder) Signature__________________________ 12 Assignment (Form of Assignment to be Executed if Holder Desires to Transfer Warrants Evidenced Hereby) FOR VALUE RECEIVED hereby sells, assigns and transfers unto Please insert social security or other identifying number _____________________________ _____________________________ ________________________________________________________________________________ (Please print name and address including zip code) ________________________________________________________________________________ The Warrants represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint ____________ Attorney, to transfer said Warrant Certificate on the books of the Company with full power of substitution in the premises. Dated: _______________________________________ Signature (Signature must conform in all respects to name of Holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by a bank, trust company or member broker of the New York, Midwest or Pacific Stock Exchanges.) Signature Guaranteed __________________________ EX-5.1 3 OPINION & CONSENT OF DAVID HIGBEE 1 [THE WILLIAMS COMPANIES, INC. LETTERHEAD] EXHIBIT 5.1 May 1, 1995 The Williams Companies, Inc. One Williams Center Tulsa, OK 74172 Dear Sirs: The Williams Companies, Inc., a Delaware corporation (the "Company") contemplates filing a Registration Statement on Form S-8 under the Securities Act of 1933, as amended (the "Act"), relating to the registration of Common Stock of the Company, $1.00 par value (the "Common Stock") and associated preferred stock purchase rights (the "Rights"), to be issued pursuant to the terms of the Transco Energy Company Thrift Plan (the "Plan"). As Counsel for the Company, I have examined the corporate proceedings and such other legal matters as I deem relevant to the authorization and issuance of the Common Stock and the Rights. Based on such examination, it is my opinion that when the Common Stock has been issued by the Company pursuant to the terms of the Plan, the Common Stock and the Rights will be legally issued, fully paid and nonassessable. I hereby consent to the filing of this opinion with the Securities and Exchange Commission as Exhibit 5.1 to the Registration Statement. Very truly yours, /s/David M. Higbee David M. Higbee DMH/cf EX-23.2 4 CONSENT OF ERNST & YOUNG 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Interests of Named Experts and Counsel" in the Registration Statement (Form S-8) pertaining to the Transco Energy Company Thrift Plan and to the incorporation by reference therein of our report dated February 10, 1995, with respect to the consolidated financial statements and schedules of The Williams Companies, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 1994, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP Tulsa, Oklahoma May 1, 1995 EX-23.3 5 CONSENT OF ARTHUR ANDERSEN 1 EXHIBIT 23.3 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated June 20, 1994, included in the Transco Energy Company Thrift Plan Form 11-K for the year ended December 31, 1993, and to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN LLP Houston, Texas April 28, 1995 EX-24.1 6 POWER OF ATTORNEY 1 EXHIBIT 24.1 THE WILLIAMS COMPANIES, INC. POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that each of the undersigned individuals, in their capacity as a director or officer, or both, as hereinafter set forth below their signature, of THE WILLIAMS COMPANIES, INC., a Delaware corporation ("Williams"), does hereby constitute and appoint J. FURMAN LEWIS, BOBBY E. POTTS and DAVID M. HIGBEE their true and lawful attorneys and each of them (with full power to act without the others) their true and lawful attorneys for them and in their name and in their capacity as a director or officer, or both, of Williams, as hereinafter set forth below their signature, to sign a registration statement on Form S-8 for the registration under the Securities Act of 1933, as amended, of Common Stock of Williams issuable pursuant to the terms and provisions of the Transco Energy Company Thrift Plan, together with associated Preferred Stock purchase rights and Plan interests, and any and all amendments and post-effective amendments to said registration statement and any and all instruments necessary or incidental in connection therewith; and THAT the undersigned Williams does hereby constitute and appoint J. FURMAN LEWIS, BOBBY E. POTTS and DAVID M. HIGBEE its true and lawful attorneys and each of them (with full power to act without the others) its true and lawful attorney for it and in its name and on its behalf to sign said registration statement and any and all amendments and post-effective amendments thereto and any and all instruments necessary or incidental in connection therewith. Each of said attorneys shall have full power of substitution and resubstitution, and said attorneys or any of them or any substitute appointed by any of them hereunder shall have full power and authority to do and perform in the name and on behalf of each of the undersigned, in any and all capacities, every act whatsoever requisite or necessary to be done in the premises, as fully to all intents and purposes as each of the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts of said attorneys or any of them or of any such substitute pursuant hereto. IN WITNESS WHEREOF, the undersigned have executed this instrument, all as of the 16th day of March, 1995. /s/ Keith E. Bailey /s/ Jack D. McCarthy - --------------------------------- ------------------------------ Keith E. Bailey Jack D. McCarthy Chairman of the Board, President Senior Vice President and Chief Executive Officer (Principal Financial Officer) (Principal Executive Officer) /s/ Gary R. Belitz --------------------------- Gary R. Belitz Controller (Principal Accounting Officer) 2 Page 2 /s/ Harold W. Andersen /s/ Ralph E. Bailey - ------------------------------ ------------------------------- Harold W. Andersen Ralph E. Bailey Director Director /s/ Glenn A. Cox /s/ Thomas H. Cruikshank - ------------------------------ ------------------------------- Glenn A. Cox Thomas H. Cruikshank Director Director /s/ Ervin S. Duggan /s/ Robert J. LaFortune - ------------------------------ ------------------------------- Ervin S. Duggan Robert J. LaFortune Director Director /s/ James C. Lewis /s/ Jack A. MacAllister - ------------------------------ ------------------------------- James C. Lewis Jack A. MacAllister Director Director /s/ James A. McClure /s/ Peter C. Meinig - ------------------------------ ------------------------------- James A. McClure Peter C. Meinig Director Director /s/ Kay A. Orr /s/ Gordon R. Parker - ------------------------------ ------------------------------- Kay A. Orr Gordon R. Parker Director Director /s/ Joseph H. Williams ---------------------------- Joseph H. Williams Director THE WILLIAMS COMPANIES, INC. By /s/ J. Furman Lewis ------------------------------ J. Furman Lewis ATTEST: Senior Vice President /s/ David M. Higbee - ------------------------- David M. Higbee Secretary EX-24.2 7 RESOLUTION AUTHORIZING SIGNATURES TO P. OF A. 1 EXHIBIT 24.2 I, the undersigned, DAVID M. HIGBEE, Secretary of THE WILLIAMS COMPANIES, INC., a Delaware company (hereinafter called the "Company"), do hereby certify that at a meeting of the Board of Directors of the Company, duly convened and held on March 16, 1995, at which a quorum of said Board was present and acting throughout, the following resolution was duly adopted: RESOLVED that the form of power of attorney submitted to this meeting for use in connection with the execution and filing for and on behalf of the Company of the Registration Statement referred to in the immediately preceding resolution and any amendments or supplements thereto is hereby approved and the Chairman of the Board, the President or any Vice President of the Company be, and hereby is, authorized to execute said power of attorney in the form so presented by, for and on behalf of the Company. I further certify that the foregoing resolution has not been modified, revoked or rescinded and is in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of THE WILLIAMS COMPANIES, INC., this 1st day of May, 1995. /s/ David M. Higbee ----------------------- David M. Higbee Secretary (CORPORATE SEAL) EX-99 8 TRANSCO ENERGY COMPANY THRIFT PLAN 1 EXHIBIT 99 TRANSCO ENERGY COMPANY THRIFT PLAN (34TH AMENDMENT) 2 INDEX
SECTION PAGE - ------- ---- SECTION I: INTRODUCTION 1.1 Purpose of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1 1.2 Exclusive Benefit of Participants . . . . . . . . . . . . . . . . . . . . . I-1 1.3 Rights Under the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2 1.4 Plan a Voluntary Undertaking by Employer . . . . . . . . . . . . . . . . . . I-2 1.5 Effect of Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2 SECTION II: DEFINITION AND CONSTRUCTION OF TERMS 2.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1 2.2 Construction of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . II-6 SECTION III: PLAN ADMINISTRATION 3.1 Thrift Plan Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1 3.2 Chairman, Secretary and Subcommittees . . . . . . . . . . . . . . . . . . . III-1 3.3 Meetings and Majority Vote . . . . . . . . . . . . . . . . . . . . . . . . . III-2 3.4 No Bond Required or Compensation to be Paid . . . . . . . . . . . . . . . . III-2 3.5 General Powers and Duties . . . . . . . . . . . . . . . . . . . . . . . . . III-2 3.6 Appointment and Allocation . . . . . . . . . . . . . . . . . . . . . . . . . III-3 3.7 Determinations by Committee . . . . . . . . . . . . . . . . . . . . . . . . III-3 3.8 Maintenance of Accounts and Reports . . . . . . . . . . . . . . . . . . . . III-5 3.9 Information to be Furnished . . . . . . . . . . . . . . . . . . . . . . . . III-5 3.10 Reliance on Data and Opinions . . . . . . . . . . . . . . . . . . . . . . . III-5 3.11 Action Non-Discriminatory . . . . . . . . . . . . . . . . . . . . . . . . . III-6 3.12 Liability of and Indemnity to Members . . . . . . . . . . . . . . . . . . . III-6 3.13 Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-6 SECTION IV: ELIGIBILITY AND PARTICIPATION 4.1 Present Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1 4.2 New Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1 4.3 Application for Participation . . . . . . . . . . . . . . . . . . . . . . . IV-1 4.4 Late Commencement of Participation . . . . . . . . . . . . . . . . . . . . . IV-1 4.5 Change in Employment Status . . . . . . . . . . . . . . . . . . . . . . . . IV-1 4.6 Reemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2 SECTION V: PARTICIPANT CONTRIBUTIONS 5.1 Participant Contributions . . . . . . . . . . . . . . . . . . . . . . . . . V-1 5.2 Change in Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . V-1 5.3 Involuntary Suspension of Participant Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2 5.4 Rights During Suspension . . . . . . . . . . . . . . . . . . . . . . . . . . V-2 5.5 Correction of Errors in Contributions . . . . . . . . . . . . . . . . . . . V-3 5.6 Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3 5.7 Affiliate Plan Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . V-3
(i) 3
SECTION PAGE - ------- ---- SECTION VI: EMPLOYER MATCHING CONTRIBUTIONS, PLAN EXPENSES AND ESOP DIVIDENDS 6.1 Amount of Matching Contributions . . . . . . . . . . . . . . . . . . . . . . VI-1 6.2 Payment of Employer Contributions . . . . . . . . . . . . . . . . . . . . . VI-2 6.3 Correction of Errors in Contributions . . . . . . . . . . . . . . . . . . . VI-2 6.4 Contributions by Affiliated Employer . . . . . . . . . . . . . . . . . . . . VI-2 6.5 Expenses of Plan and Trust . . . . . . . . . . . . . . . . . . . . . . . . . VI-3 6.6 ESOP Share Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3 SECTION VII: MANAGEMENT OF PARTICIPANT ACCOUNTS 7.1 Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1 7.2 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1 7.3 Trust Assets for Exclusive Benefit of Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1 SECTION VIII: INVESTMENT PROVISIONS 8.1 Initial Investment of Accounts . . . . . . . . . . . . . . . . . . . . . . . VIII-1 8.2 Change in Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1 8.3 ESOP Diversification Election . . . . . . . . . . . . . . . . . . . . . . . VIII-3 8.4 Voting of Company Stock . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-4 8.5 Tender and Exchange Offers . . . . . . . . . . . . . . . . . . . . . . . . . VIII-5 8.6 Put Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-8 8.7 Independent Appraiser . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-10 SECTION IX: TYPES OF ACCOUNTS 9.1 After-Tax Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1 9.2 401(k) Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1 9.3 Rollover Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1 9.4 Company Match-Cash Accounts . . . . . . . . . . . . . . . . . . . . . . . . IX-1 9.5 Company Match-Stock Accounts . . . . . . . . . . . . . . . . . . . . . . . . IX-2 9.6 Account Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-2 SECTION X: ALLOCATIONS AND ACCOUNT BALANCES 10.1 Allocation of Participant Contributions . . . . . . . . . . . . . . . . . . X-1 10.2 Allocation of Matching Contributions . . . . . . . . . . . . . . . . . . . . X-1 10.3 Calculation of Account Balances . . . . . . . . . . . . . . . . . . . . . . X-1 SECTION XI: LIMITS ON BENEFITS 11.1 Applicability of Restrictions . . . . . . . . . . . . . . . . . . . . . . . XI-1 11.2 Special Definitions Applicable to Section XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1 11.3 Defined Contribution Limit . . . . . . . . . . . . . . . . . . . . . . . . . XI-1 11.4 Limitation for Two Types of Plans . . . . . . . . . . . . . . . . . . . . . XI-4 11.5 Special Rules for Plans Subject to Overall Limitations Under Code Section 415(e) . . . . . . . . . . . . . . . . . . XI-4 11.6 Reallocation of Excess Contributions . . . . . . . . . . . . . . . . . . . . XI-5
(ii) 4
SECTION PAGE - ------- ---- SECTION XII: VESTING OF ACCOUNTS 12.1 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII-1 SECTION XIII: DISTRIBUTIONS, WITHDRAWALS, FORFEITURES AND LOANS 13.1 Termination of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-1 13.2 401(k) Account - Age 59 1/2 Withdrawals . . . . . . . . . . . . . . . . . . XIII-2 13.3 After-Tax Account and Rollover Account Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-2 13.4 Hardship Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-3 13.5 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-6 13.6 Investment Fund Withdrawal Order . . . . . . . . . . . . . . . . . . . . . . XIII-10 13.7 Direct Rollover Distributions . . . . . . . . . . . . . . . . . . . . . . . XIII-10 13.8 30-Day Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-11 SECTION XIV: PROVISIONS CONCERNING PAYMENT OF BENEFITS 14.1 Medium of Withdrawals/Distributions . . . . . . . . . . . . . . . . . . . . XIV-1 14.2 Time of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-1 14.3 Designation of Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . XIV-2 SECTION XV: SPECIAL PAYMENT PROVISIONS 15.1 Payments to Minors and Incompetents . . . . . . . . . . . . . . . . . . . . XV-1 15.2 Non-Assignability of Rights . . . . . . . . . . . . . . . . . . . . . . . . XV-1 SECTION XVI: ASSOCIATED COMPANIES 16.1 Adoption of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-1 16.2 Withdrawal from Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-1 16.3 Termination of Employer Participation by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-2 SECTION XVII: AMENDMENT AND TERMINATION 17.1 Right to Amend or Terminate . . . . . . . . . . . . . . . . . . . . . . . . XVII-1 17.2 Restrictions on Amendment . . . . . . . . . . . . . . . . . . . . . . . . . XVII-2 17.3 Effect of Dissolution or Merger . . . . . . . . . . . . . . . . . . . . . . XVII-2 17.4 Effect of Merger, Consolidation or Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVII-3 17.5 Expiration of Trust Term . . . . . . . . . . . . . . . . . . . . . . . . . . XVII-3 17.6 Distribution upon Termination of Plan . . . . . . . . . . . . . . . . . . . XVII-3 17.7 Consent for Alternate Forms of Benefit . . . . . . . . . . . . . . . . . . . XVII-4 SECTION XVIII: TOP-HEAVY RULES 18.1 Top-Heavy Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVIII-1 18.2 Determination of Whether the Plan is Top-Heavy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVIII-1 18.3 If the Plan is Top-Heavy . . . . . . . . . . . . . . . . . . . . . . . . . . XVIII-2 18.4 Super Top-Heavy Provisions . . . . . . . . . . . . . . . . . . . . . . . . . XVIII-3
(iii) 5
SECTION PAGE - ------- ---- SECTION XIX: ANTIDISCRIMINATION TESTS 19.1 Special Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIX-1 19.2 401(k) Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIX-4 19.3 Actual Deferral Percentage . . . . . . . . . . . . . . . . . . . . . . . . . XIX-6 19.4 Actual Deferral Percentage Test . . . . . . . . . . . . . . . . . . . . . . XIX-7 19.5 Adjustments as a Result of Actual Deferral Percentage Test . . . . . . . . . . . . . . . . . . . . . . . . . XIX-8 19.6 Maximum Average Contribution Percentage . . . . . . . . . . . . . . . . . . XIX-9 19.7 Adjustments for Excessive Contribution Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIX-10 SECTION XX: GENERAL PROVISIONS 20.1 Employer's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XX-1 20.2 Notice of Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XX-1 20.3 Copies of Plan Available . . . . . . . . . . . . . . . . . . . . . . . . . . XX-1 20.4 Titles and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . XX-1 20.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XX-1 20.6 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XX-2 20.7 Unclaimed Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XX-2
(iv) 6 TRANSCO ENERGY COMPANY THRIFT PLAN TRANSCO ENERGY COMPANY, a corporation organized under the laws of the State of Delaware, has established the Transco Energy Company Thrift Plan for the exclusive benefit of those of its Employees (and the employees of Associated Companies who adopt the Plan pursuant to its provisions) who qualify under and become Participants in the Plan, and for the beneficiaries of such employees. The Plan is hereby amended and restated effective as of January 1, 1995 and certain provisions are amended as of other dates as specifically provided herein. The terms, provisions and conditions of the Plan, as hereby amended and restated, are as follows: SECTION I INTRODUCTION 1.1 Purpose of of Plan. It is the purpose of this Plan to promote and encourage employees to provide additional security and income for their future through a systematic savings program. 1.2 Exclusive Benefit of Participants. This Plan has been adopted for the exclusive benefit of the Participants and their Beneficiaries. So far as possible, this Plan shall be interpreted in a manner consistent with this intent and with the intention of the Company that this Plan shall satisfy those provisions of ERISA and the Code relating to a qualified plan with a Section 401(k) feature and an ESOP feature. In this regard, the separate ESOP part of the Plan shall be disaggregated and tested separately for all testing requirements of the Code and shall be administered and reported in accordance with such disaggregation. I-1 7 1.3 Rights under the Plan. The establishment and maintenance of this Plan shall not be considered as giving any Employee or any other person any legal or equitable right as against any Employer, the Committee or the Trustee, or in the assets of the Trust, except and to the extent that such right is specifically provided for in this Plan. 1.4 Plan a Voluntary Undertaking by Employer. This Plan is strictly a voluntary undertaking on the part of each Employer and shall not be deemed or construed to constitute a contract between any Employer and any Employee or other person or to be a consideration for or inducement to, or a condition of, the employment of any Employee. Nothing contained in this Plan shall be deemed to give any Employee the right to be retained in the service of any Employer or interfere in any way with the right of any Employer to discharge any Employee at any time. 1.5 Effect of Amendment. The Plan is hereby amended and completely restated as set forth herein and all rights and benefits under the Plan shall hereafter be determined under the terms and provisions hereof; however, the amendment and restatement of the Plan hereby shall not operate or be construed to deprive any Participant of any protected benefit, within the meaning of Code Section 411(d)(6) and the regulations thereunder, he may have had under the Plan as in effect immediately prior thereto. Further, this amendment and restatement shall not operate or be construed to confer on, or provide to, any former Participant whose employment terminated for any reason prior to the effective date hereof, any additional rights other than those to which he was entitled under the Plan as in effect at the time his employment terminated, except as otherwise specifically provided herein or required by law. I-2 8 SECTION II DEFINITION AND CONSTRUCTION OF TERMS 2.1 Definitions. In addition to the special definitions in Section XIX, for purposes of the Plan, the following words and phrases shall, whenever used herein, have the meanings stated below unless a different meaning is clearly required by the context: (a) Account means a Rollover Account, a 401(k) Account, an After-Tax Account, a Company Match-Cash Account and a Company Match-Stock Account, as applicable. (b) Affiliate means any corporation which is a member of a "controlled group" of corporations with an Employer or any trade or business (including a partnership) under "common control" or a member of an "affiliated service group" with any Employer determined under Code Sections 414(b), (c) and (m), respectively, and any other entity required to be aggregated with the Employer pursuant to regulations under Code Section 414(o). For purposes of Section XI, such determinations shall be made in accordance with Code Section 415(h). (c) After-Tax Account means an Account described in Section 9.1. (d) After-Tax Contribution means an after-tax contribution made by the Participant pursuant to Section 5.1. (e) Associated Company means an Affiliate which has been designated by the Board as eligible to adopt and participate in the Plan on and after the date such Affiliate has adopted the Plan. (f) Beneficiary means the person designated by a Participant or the Plan pursuant to Section 14.3 to receive any benefits payable upon his death. II-1 9 (g) Board means the Board of Directors of the Company. (h) Break in Service means, with respect to an Employee, a period of 12 or more consecutive months, beginning upon the termination of such Employee's severance, during which he does not complete an Hour of Service; however, with respect to an Employee who is absent from service for more than 12 months due to maternity/paternity reasons, the 12-month period following the first anniversary of the date such absence began shall not be treated as a period of service (unless the Employer's medical leave of absence policy provides otherwise) or a period of severance. An Employee's "severance" means the earlier of (i) the date the Employee quits, is discharged, retires, or dies, or (ii) the first anniversary of the date the Employee remains absent from service for any other reason other than a Leave of Absence. An Employee on a Leave of Absence shall not be considered to have terminated service during the Leave of Absence for purposes of determining his Break in Service. (i) Code means the Federal Internal Revenue Code of 1986, as amended from time to time, and any subsequently-adopted Federal Internal Revenue Code. References in the Plan to sections of the Code shall include corresponding sections in any subsequently-adopted Federal Internal Revenue Code. (j) Committee means the Thrift Plan Committee appointed pursuant to Section III. (k) Company means Transco Energy Company. (l) Company Match-Cash Account means an Account described in Section 9.4. II-2 10 (m) Company Match-Stock Account means an Account described in Section 9.5. (n) Company Stock means the common stock of the Company; provided, however, effective upon the consummation of the Merger (as defined in Section 6.1), Company Stock shall mean the common stock of The Williams Companies, Inc. (o) Company Stock Fund means the fund offered under the Plan, as provided in Attachment A, in which Participants can direct the investment of their Accounts to purchase Company Stock and which also holds Company Stock allocated to the Company Match-Stock Account. (p) Compensation means, with respect to a Participant for any specified payroll period, the regular basic wage or salary payable to such Participant that period, including any amounts excluded from his gross income pursuant to a salary reduction election pursuant to Code Sections 125 or 402, but excluding all other items of compensation, including, without limitation (1) bonuses, (2) commissions, (3) awards, (4) military leave pay, (5) premium, auxiliary or other special pay, (6) overtime pay for work performed in excess of the basic 40-hour work-week, (7) increased wages or salary resulting from temporary promotion, upgrading or transfer, of whatever duration, to a higher paid job or classification, (8) severance pay, and (9) contributions by any Employer under this or any other employee benefit plan except as expressly provided to the contrary above. In no event, however, shall the annual compensation of a Participant considered for Plan purposes for any Plan Year beginning on or after January 1, 1994 exceed $150,000, as adjusted by Code Section 401(a)(17). For purposes of the foregoing, compensation received after the Code Section II-3 11 401(a)(17) dollar limit has been reached for a Plan Year shall be disregarded under the Plan. Compensation shall be determined under the rules of Code Section 414(q)(6), except that the term "family" shall include only the spouse of the Participant and any lineal descendant under the age of 19 as of the close of the Plan Year. Further, for any Plan Year that contains fewer than 12 calendar months, the annual compensation limit for such short Plan Year shall be limited to the Code Section 401(a)(17) dollar limit for the calendar year in which such Plan Year begins multiplied by the ratio obtained by dividing the number of full calendar months in the Plan Year by 12. (q) Current Balance means the amount credited to an Account as of a Valuation Date determined in accordance with the provisions of Section 10.3. (r) Earning means, with respect to an Employer, the current and/or accumulated earnings of such Employer as shown by its books and accounts for general corporate purposes in accordance with generally accepted accounting principles. (s) Eligible Class means an Employee of an Employer who: (1) is not a member of or represented by a collective bargaining unit, unless the collective bargaining agreement for such unit requires inclusion of its members in the Plan; (2) is not a non-resident alien; and (3) is not a "leased employee" within the meaning of Code Section 414(n). (t) Employee means any individual who is employed as an "employee", as defined in Code Section 3121(d), by an Employer or Affiliate, and shall also include a "leased employee" unless Code Section 414(n)(5) applies or regulations provide otherwise. II-4 12 (u) Employers means the Company and each Associated Company which has adopted and is participating in the Plan pursuant to Section 16.1. (v) Entry Date means, with respect to an Employee, the first day the Employee completes an Hour of Service in the Eligible Class and the first day of each payroll period thereafter and such other date or dates as the Committee may from time to time designate. (w) ERISA means Public Law No. 93-406, the Employee Retirement Income Security Act of 1974, as amended from time to time. (x) 401(k) Account means an Account described in Section 9.2. (y) 401(k) Contribution means a salary reduction (before-tax) contribution made by the Participant pursuant to Section 5.1 and deemed to be an Employer contribution in accordance with Code Section 401(k). (z) Hour of Service means an hour for which an Employee is paid, or entitled to payment, by an Employer or Affiliate during a Plan Year for the performance of duties. (aa) Leave of Absence means a temporary absence from service due to sickness, accident, military service, or any other temporary absence authorized by the Employer and in accordance with the Employer's established Leave of Absence policy, which shall be applied in a uniform and nondiscriminatory manner. (bb) Participant means an Employee who has qualified under and has become a Participant in the Plan, including a former Employee who continues to have an Account under the Plan. II-5 13 (cc) Plan means the "Transco Energy Company Thrift Plan" as set forth herein and as hereafter amended. (dd) Plan Year means the calendar year. (ee) Rollover Account means an Account described in Section 9.3. (ff) Trust means the Trust established by the Trust Agreement. (gg) Trust Agreement means the agreement entered into between the Company and the Trustee which provides for the receiving, holding, investing and disbursing of the assets, properties, securities and cash in the Accounts. (hh) Trustee means such corporation(s) and/or individual(s) as may from time to time be designated by the Company to serve as Trustee under the Trust Agreement, whether one or more. (ii) Valuation Date means each business day in a Plan Year on which the assets of the Plan are valued. 2.2 Construction of Terms. Whenever appropriate herein, words used in the masculine shall be deemed to include the feminine and words used in the singular shall be construed to include the plural and the plural to include the singular and the use of any one gender to include the other. II-6 14 SECTION III PLAN ADMINISTRATION 3.1 Thrift Plan Committee. The Plan shall be administered by a Thrift Plan Committee of not less than three Employees who may, but need not, be Participants. Members of the Committee shall be appointed by and shall hold office at the pleasure of the Board. The Board may increase or decrease (but not to less than three members) the membership of the Committee at any time and from time to time. Any member of the Committee may resign by delivering his written resignation to the Board and to the Committee. A vacancy shall exist on the Committee if at any time there are less than three members, and any such vacancy, whether resulting from death, resignation, removal or otherwise, shall be filled by the Board. 3.2 Chairman, Secretary and Subcommittees. The members of the Committee shall elect from their number a Chairman and shall appoint a Secretary, who need not be a member of the Committee. The Committee shall furnish to the Trustee certificates as to the identity of its Chairman and Secretary from time to time and the designation of any other person or persons authorized to act on behalf of the Committee, together with a specimen of the signature of each of such persons, and the Trustee shall be entitled to rely upon the identity and authority of the Chairman, Secretary and other persons as disclosed by such certificates until receipt by it from the Committee of a written revocation of such authorization. The Secretary shall keep minutes of the Committee's proceedings and all data, records and documents relating to the Committee's administration of the Plan. The Committee may appoint from its number subcommittees with such powers as the Committee shall determine and may authorize one or more members of the Committee or any agent to execute or deliver any instrument or make any payment III-1 15 on behalf of the Committee, and they may retain such legal counsel or accountants, who may or may not be in the employ of the Company, actuaries, physicians and such clerical services as they may require in carrying out the provisions of the Plan. 3.3 Meetings and Majority Vote. The Committee shall hold meetings upon such notice, at such time and at such place as they may determine. Notice of meetings shall not be required if waived in writing. A majority of the members of the Committee shall constitute a quorum for the transaction of business, and the Committee may act notwithstanding the existence of a vacancy so long as there are at least two members of the Committee. All resolutions or other actions taken by the Committee shall be either by the vote of a majority of those present at a meeting at which a majority of the members is present, or by a written instrument signed by all the members if they act without a meeting. 3.4 No Bond Required or Compensation to be Paid. The members of the Committee shall serve without bond or other security, except as otherwise provided by law, and without compensation for their services as such. 3.5 General Powers and Duties. The Committee shall have complete control of the administration of this Plan, with all powers necessary to enable it to carry out its duties in that respect, and it shall endeavor to act, whether by general rules or by particular decisions, so as not to discriminate in favor of or against any person. Not in limitation but in amplification of the foregoing, the Committee shall have the power to interpret or construe this Plan, to determine all questions that may arise hereunder as to the eligibility of employees and the status and rights of Participants and others, to adopt bylaws for the conduct of its affairs and make rules and regulations for the administration of the Plan which are not inconsistent with the III-2 16 terms and provisions hereof, and to take such other actions relating to the administration of the Plan as are conferred or imposed upon it hereunder and under the Trust Agreement. The members of the Committee shall at all times comply with the provisions of ERISA and the Code relating to fiduciaries. 3.6 Appointment and Allocation. Each person serving as a member of the Committee shall from time to time by written instrument appoint a person or persons other than another Committee member to carry out the fiduciary responsibilities of such person under this Plan in the event such member shall be unable to act due to illness, absence or any other reason. The members of the Committee may by written agreement allocate fiduciary responsibilities among themselves, and if such responsibilities are so allocated, then the responsibilities of each such person shall be exercisable severally and not jointly, with each such person's responsibilities being limited to the specific areas which were allocated to him. Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan, and any member of the Committee or other fiduciary may employ one or more persons to render advice with regard to any responsibility such person has under the Plan. 3.7 Determinations by Committee. No benefit shall be payable under this Plan unless and until application therefor has been filed with and approved by the Committee. Each application for benefits shall be in writing in such form as shall be prescribed by the Committee. The Committee shall make all determinations as to the identity and right of any person to a benefit, and the proper amount thereof, under this Plan. Written notice of the disposition of a claim shall be furnished by the Committee to the claimant within 90 days after the claim is filed. In the event the claim is denied, the reasons for denial shall be III-3 17 specifically set forth, pertinent provisions of the Plan shall be cited, where appropriate, an explanation shall be provided as to what additional information is needed to perfect the claim and why, and the steps for the claimant to submit his claim for review shall be outlined. In the event written notice of the disposition of a claim is not provided to the claimant within the time allowed above, the claim shall be deemed denied for purposes of the claimant's submitting a request for review. If the claimant wishes further consideration of his position, he may request in writing a review with the Plan Administrator. Such request shall state the claimant's position and shall be filed with the Plan Administrator within 60 days after the receipt of the written denial or within 60 days after the time allowed for the written response. The claimant or his representative may also review pertinent documents or submit issues or comments supporting the claim in writing. Within 60 days after receipt of the claimant's written request, a decision on the review shall be made and shall be communicated by the Committee in writing with specific reasons and references to pertinent Plan provisions, all written in a manner calculated to be understood by the claimant. In the event written notice of the review is not provided within the time allowed above, the claim shall be deemed denied upon review. The 90-or 60-day deadlines for a written response by the Committee referred to in this Section 3.7 may be extended an additional 90 or 60 days, respectively, by written notice thereof to the claimant before the deadline is reached. An extension may be made only if special circumstances are involved and if they are communicated to the claimant in the written notice. The payment of any benefit in accordance with the Committee's determination shall constitute a complete discharge of III-4 18 all obligations on account thereof. The Committee may require any payee, as a condition precedent to such payment, to execute a receipt and release therefor in such form as the Committee may prescribe. 3.8 Maintenance of Accounts and Reports. The Committee shall cause accounts to be kept showing the fiscal transactions of the Plan. The Committee shall render annually a report showing in reasonable detail the assets and liabilities of the Plan and give a brief account of the operation of the Plan for the past year to the Boards of Directors of all Employers. Such report shall be filed in the office of the Committee where it shall be open to inspection by any Participant or former Participant who is eligible to receive benefits under the Plan. 3.9 Information to be Furnished. To enable the Committee to perform its functions, each Employer shall supply full and timely information to the Committee on all matters relating to the compensation of each of its employees who are Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Committee may require. Each person claiming a benefit shall furnish to the Committee and/or to the Trustee information and proof as to all facts which the Committee and/or the Trustee may reasonably require. 3.10 Reliance on Data and Opinions. The Committee shall be entitled to rely on all data and information furnished to it by any Employer, the Participants and any other person entitled to receive benefits under the Plan. Each Employer and the Committee shall be entitled to rely upon all certificates and reports furnished by any accountant designated by the Committee, and upon all reports, certificates and opinions furnished by any physician selected by the Employer, and upon all opinions given by any attorney selected by the Committee. III-5 19 3.11 Action Non-Discriminatory. The Committee shall not take any action whatsoever which would result in benefiting one Participant or group of Participants at the expense of another or in discrimination as between Participants similarly situated, nor shall it apply different rules to substantially similar sets of facts. 3.12 Liability of and Indemnity to Members. Subject to the provisions of ERISA, no member of the Committee shall incur any liability or obligation for any action taken, permitted to be taken or omitted to be taken by him, the Committee or any other member of the Committee, except when such action or omission is the result of his own gross negligence or willful misconduct. The Company shall fully protect, indemnify and defend each and every member and former member of the Committee from and against all claims, liabilities, costs and expenses, including attorneys' fees, which may be asserted against him, arising out of or resulting from his action or omission to act in his capacity as a member of the Committee, except for his own gross negligence or willful misconduct, or arising out of or resulting from any action or omission to act by other members of the Committee. 3.13 Investment Manager. The Committee may appoint an Investment Manager, within the meaning of ERISA Section 3(38), to manage any or all of the assets of the Trust. III-6 20 SECTION IV ELIGIBILITY AND PARTICIPATION 4.1 Present Participants. Each person who was a Participant in the Plan immediately prior to this amendment shall continue as a Participant in the Plan. 4.2 New Participants. Each person who becomes an Employee (or transfers into the Eligible Class) on or after January 1, 1995 shall be eligible to become a Participant in the Plan on the date he first completes an Hour of Service in the Eligible Class by filing his application for membership in accordance with Section 4.3 on or prior to such date. Participation in the Plan by any Employee in the Eligible Class is entirely voluntary. 4.3 Application for Participation. Each eligible Employee desiring to become a Participant in the Plan must, as a condition to his participation, file a written application for participation with his Employer. Each application for participation in the Plan shall be in such form as the Committee shall prescribe and shall contain such information as the Committee shall deem necessary or desirable in the operation and administration of the Plan. 4.4 Late Commencement of Participation. An Employee need not commence his participation in the Plan on the date he first becomes eligible to do so but may commence his participation in the Plan on any subsequent Entry Date, assuming he is then in the Eligible Class, by filing his application for participation in accordance with Section 4.3 prior to the Entry Date on which his participation in the Plan is to commence. 4.5 Change in Employment Status. In the event the status of a Participant changes so that he is no longer in the Eligible Class but remains an Employee, he shall continue as a Participant but thereafter shall not be permitted to make contributions to the IV-1 21 Plan nor shall Employer matching contributions be made on his behalf. Further, if a Participant ceases to be an Employee, he shall continue as a Participant until his Account balances are distributed in full. 4.6 Reemployment. A former Employee shall be eligible for participation the first date he again completes an Hour of Service in the Eligible Class, provided he files his application for participation in accordance with Section 4.3 on or before that date. IV-2 22 SECTION V PARTICIPANT CONTRIBUTIONS 5.1 Participant Contributions. Subject to the special provisions of Sections XI and XIX, each Participant may make a 401(k) Contribution and/or an After-Tax Contribution to the Plan by payroll reduction/deduction each payroll period during which he is in the Eligible Class in such amount (in whole percentages only) of his Compensation, as designated by the Participant in his application for participation pursuant to Section 4.3. However, in no event may the aggregate amount of a Participant's contributions, whether 401(k) Contributions and/or After-Tax Contributions, for a payroll period exceed 15% of his Compensation. Further, the Committee may, in any Plan Year, limit the maximum amount of 401(k) Contributions and/or After-Tax Contributions that the Highly Compensated employees (as defined in Section 19.1(b)) may make with respect to such year, or the remainder of such year, if the Committee believes such lower limit will be necessary to satisfy the Code Section 401(k) or (m) discrimination tests, respectively, for such year. No contribution may be made to the Plan by a Participant hereunder for any payroll period unless he is a Participant in the Eligible Class on the day his contribution is deducted and withheld by the Employer. All 401(k) Contributions and After-Tax Contributions under this Section 5.1 shall be withheld by the Employer from the Participant's Compensation each payroll period and paid over to the Trustee as soon as practicable thereafter. 5.2 Change in Contributions. Within the limitations of Section 5.1, a Participant may increase, decrease or stop the designated percentage(s) of his Compensation to be contributed to V-1 23 the Plan, or change the character of his contributions between 401(k) Contributions and After-Tax Contributions, effective as of a future Entry Date by properly notifying the Plan prior to such Entry Date. Unless changed in accordance with the terms of this Plan, the percentage(s) and type of contribution(s) designated by a Participant shall continue in effect, notwithstanding any change in his Compensation, and the amount of his contribution(s) shall be automatically adjusted to reflect any changes in his Compensation. A Participant who has voluntarily stopped his contributions may resume such contributions, if in the Eligible Class, by notifying the Plan in the proper manner prior to the Entry Date on which he elects to resume making contributions to the Plan. 5.3 Involuntary Suspension of Participant Contributions. A Participant's contributions to the Plan under Section 5.1 shall be automatically suspended, and no deduction thereof shall be made by his Employer, whenever and for so long as (a) such Participant is no longer in the Eligible Class, or (b) deduction of such contributions from his Compensation would be contrary to law. Contributions involuntarily suspended pursuant to the Plan shall not be resumed automatically; the Participant must elect to resume such contributions as provided in Section 5.2 after the cause for such suspension ceases to exist. 5.4 Rights During Suspension. The suspension of a Participant's contributions to the Plan shall not affect any of his other rights under the Plan, and the Trustee shall continue to adjust his Accounts as of each Valuation Date during such period of suspension in accordance with the provisions of Section X. V-2 24 5.5 Correction of Errors in Contributions. An Employer may at any time make adjustments because of errors in calculating previous Participant contributions or because of information not known to the Employer at the time of such previous calculation. Such adjustments may, but need not, be made retroactively. 5.6 Rollover Contributions. An Employee who is a Participant may make (by check only) a rollover contribution to the Plan, including a direct rollover within the meaning of Code Section 401(a)(31), of any eligible rollover amount received from another plan and trust qualified under Code Section 401(a) (or from a qualifying IRA rollover account); provided, however, the amount and timing of such rollover contribution must comply in all applicable respects with the requirements of the Code concerning rollovers and the administrative procedures established by the Committee with respect to rollover contributions. 5.7 Affiliate Plan Transfers. If a Participant's employment is transferred to an Affiliate that is not a participating employer in this Plan, but which participates in a qualified defined contribution plan that permits a direct trust-to-trust transfer of participant accounts from qualified defined contribution plans of other Affiliates, then, upon the request of the Participant, the Committee shall cause the Trustee to transfer such Participant's Accounts hereunder to the trustee of such Affiliate's qualified plan, which direction may include the liquidation of the Participant's investments under the Plan as necessary to effectuate the transfer of his Accounts. Conversely, if an Employee of a nonparticipating Affiliate is transferred to employment with an Employer under this Plan, upon the request of the Employee, the Committee shall cause the Trustee to accept a direct trust-to-trust transfer of the Employee's accounts under the qualified defined contribution plan V-3 25 of the Affiliate, provided such Employee has completed the necessary administrative forms, including investment fund designations for such transferred account(s). An Employee's account(s) transferred to this Plan from an Affiliate's plan shall be 100% vested. Further, any outstanding participant loans under the Affiliate's plan shall be transferred and continued hereunder without interruption or change, except to change the name of the plan trust that is the payee of such loan, and all protected benefits of the Affiliate's plan shall be continued under the Plan with respect to the transferred accounts, which shall be separately accounted for hereunder if such protected benefits are not the same as those provided under this Plan. The Committee shall cause the "protected benefit" provisions of the transferring Affiliate's plan to be set forth in a memorandum for each affected transferred account, which memorandum shall be deemed to be a part of this Plan for all purposes and is incorporated herein by reference. V-4 26 SECTION VI EMPLOYER MATCHING CONTRIBUTIONS, PLAN EXPENSES AND ESOP DIVIDENDS 6.1 Amount of Matching Contributions. Subject to the other provisions of the Plan, the Employers shall contribute to the Plan for each payroll period, on behalf of each Participant who made contributions to the Plan pursuant to Section 5.1 with respect to such payroll period, an amount equal to 100% of the first 6% of Compensation contributed by such Participant for such payroll period. The Employer's matching contribution made with respect to a Participant shall be allocated as follows: (a) 25% to the Participant's Company Match-Stock Account ("Matching Stock Contribution") and (b) 75% to the Participant's Company Match-Cash Account ("Matching Cash Contribution"). However, notwithstanding the foregoing, until the consummation of the Merger, as defined in the Agreement and Plan of Merger dated as of December 12, 1994 by and among The Williams Companies, Inc. ("Williams"), WC Acquisition Corp. and the Company (the "Merger Agreement"), or the termination of the Merger Agreement without the consummation of the Merger, all Matching Stock Contributions shall be made in cash and temporarily invested in the Fidelity Retirement Money Market Portfolio, or such other short-term, interest-bearing investment as the Trustee may determine. Following the consummation of the Merger, such Matching Stock Contributions and the income thereon, if any, shall be reinvested in common stock of Williams (which shall be referred to after the consummation of the Merger as Company Stock). Alternatively, if the Merger Agreement is terminated without consummation of the Merger, such Matching Stock Contributions and the income thereon, if any, shall be reinvested in Company Stock. It is the intention of the Company that the Plan qualify as a profit sharing plan with respect to the 401(k) feature VI-1 27 of the Plan. In that regard, the Employer's Matching Cash Contributions and Participant 401(k) Contributions shall be made only out of the Employer's Earnings unless the Board, in its sole discretion, expressly permits such contributions to be made with respect to a Plan Year in which there are either no Earnings or insufficient Earnings and such contributions, if made, would comply with Code Section 401(a)(27) such that this feature of the Plan would continue to qualify as a profit sharing plan feature. It is also the intention of the Company that the Matching Stock Contributions and Company Match-Stock Account of the Plan qualify as an employee stock ownership plan (ESOP) or stock bonus plan feature under the Plan. 6.2 Payment of Employer Contributions. Employer contributions shall be made to the Trust in cash, provided that Company matching contributions to be invested in the Company Stock Fund may be made in Company Stock in the discretion of the Company. Employer matching contributions shall be paid over to the Trustee as soon as reasonably practicable following the payroll period in which such Participant contributions were deducted/withheld by the Employer and in all events within one month of the end of such period. 6.3 Correction of Errors in Contributions. An Employer may at any time make adjustments because of errors in calculating previous Employer contributions or because of information not known to the Employer at the time of such previous calculation. Such adjustments may, but need not, be made retroactively. 6.4 Contributions by Affiliated Employer. If any Employer is prevented from making a contribution which it would otherwise have made under the Plan, by reason of having no current or accumulated earnings or profits or because such earnings or profits are less than the contributions which it would otherwise have made, VI-2 28 then so much of the contribution which such Employer was so prevented from making may be made, for the benefit of the Employees of such Employer, by the other Employer(s), to the extent of current or accumulated earnings or profits, in accordance with the provisions of Code Section 404(a)(3)(B). 6.5 Expenses of Plan and Trust. All direct expenses of the Trust reasonably incurred in connection with any Account in an investment fund shall be a charge against and be paid out of such Account by the Trustee. All other expenses reasonably incurred in connection with the administration of the Plan and the Trust (including, without limitation, bonding costs, attorneys', recordkeepers' and accountants' fees and charges and the fees of the Trustee) shall be paid by the Employers. The expenses to be paid by the Employers for each Plan Year may be allocated among the individual Employers in such manner as the Committee deems equitable. 6.6 ESOP Share Dividends. All cash dividends paid with respect to shares of Company Stock held in a Company Match-Stock Account may be paid either directly to the Participants (or their Beneficiaries, as the case may be) or to the Trustee, and if paid to the Trustee, they shall be distributed to the Participants (and Beneficiaries) in cash as soon as practicable after the date received and in any event not later than 90 days after the end of the Plan Year in which the dividends were paid to the Trustee. This Section 6.6 shall become ineffective if the Matching Stock Contributions feature of the Plan ceases to qualify as an ESOP feature or such dividend "pass-throughs" cease to be deductible under Code Section 404(k). VI-3 29 SECTION VII MANAGEMENT OF PARTICIPANT ACCOUNTS 7.1 Trust Agreement. As a part of this Plan, the Company shall enter into a Trust Agreement with one or more Trustees to provide for the receiving, holding, investing and disbursing of contributions to the Plan, together with the increment, increase and income thereof and therefrom; the properties and other assets of such Accounts shall constitute the trust fund of the Trust. The Trust Agreement shall constitute a part of this Plan and all rights which may accrue to any person under this Plan shall be subject to all of the terms and provisions of such Trust Agreement. The Trust Agreement shall be subject to amendment and modification in accordance with the provisions of this Plan and such Trust Agreement. 7.2 Trustee. The Trustee shall be appointed by the Board, with such rights, powers and authorities as are set forth in the Trust Agreement and any amendment thereto or modification thereof. Any Trustee may be removed by the Board at any time as provided in the Trust Agreement, and upon any such removal or upon resignation of any Trustee, a successor Trustee shall be named by the Board. 7.3 Trust Assets for Exclusive Benefit of Participants. Except as provided in Section 6.5 and below, all assets held by each Trustee under the Plan shall be held in trust for the exclusive benefit of Participants and their Beneficiaries under the Plan, and no part of the corpus or income shall ever revert to any Employer or be used for, or diverted to, purposes other than for the exclusive benefit of Participants and their Beneficiaries under the Plan. No such person, nor any other person, shall have any interest in or right to any part of the earnings of any Account, or any rights in, to or under the Trust or any part of its assets, VII-1 30 except to the extent expressly provided in the Plan. Each Participant or other person who shall claim the right to any payment under the Plan shall be entitled to look only to the trust fund of the Trust for such payment. An Employer contribution made based on a good faith mistake of fact or good faith mistake in determining the deductibility of the contribution shall be returned to the Employer within one year of the mistaken payment or the disallowance of the deduction, as the case may be. The amount returnable is the excess of the amount contributed over the amount that would have been contributed had there not occurred such mistake. However, earnings on the excess amount may not be so returned and any losses attributable to such amount shall reduce the amount returnable. Further, the amount returnable cannot cause the Account of any Participant to be reduced to less than it would have been had the mistaken amount not been contributed. VII-2 31 SECTION VIII INVESTMENT PROVISIONS 8.1 Initial Investment of Accounts. At the time an Employee first becomes a Participant, he shall direct, on a Plan form prescribed by the Committee, that all or a designated percentage of his Accounts (other than his Company Match-Stock Account) shall be invested in any one or more of the investment funds offered under the Plan as shown on Attachment A to this Plan, which attachment shall be a part of the Plan for all purposes. The Committee may from time to time amend Attachment A and in conjunction with such amendment direct the Trustee to establish new and/or delete or freeze existing investment funds and options. If so directed by the Participants, up to 100% of the Plan assets may be invested in Company Stock. Any investment direction given by a Participant shall be deemed to be a continuing direction until changed by the Participant in accordance with Section 8.2. If a Participant fails to timely give an initial investment direction, his Accounts (other than his Company Match-Stock Account) shall be automatically invested in the investment fund so designated on Attachment A for default elections until changed by the Participant (if eligible) in accordance with Section 8.2. No provision of this Plan shall constitute a guarantee by the Employers or Trustee of the value of any investment fund offered under the Plan or an indemnity against any loss resulting from investing in any such option. 8.2 Change in Investments. Subject to any such restrictions or limitations set forth in Attachment A, a VIII-1 32 Participant (or where applicable, a Beneficiary or alternate payee under a qualified domestic relations order) may change his investment election with respect to (i) the Current Balance of any or all of his Accounts, (ii) his future contributions, and/or (iii) the Employer's future matching contributions (other than the Matching Stock Contribution) to be made on his behalf as of any Valuation Date by telephoning the Plan's recordkeeper with respect to such change. However, if a Participant directs the reinvestment of all or any part of his Company Match-Stock Account into another investment fund other than pursuant to Section 8.3 below, the Participant shall be ineligible to receive any Company matching contribution during the six months following such reinvestment and such reinvestments shall cease to be a part of the ESOP portion of the Plan. Such reinvestments shall be transferred to and accounted for under the Participant's Company Match-Cash Account and thereafter shall be part of the profit sharing portion of the Plan. A direction given by a Participant to the Trustee pursuant to Section 8.5 to tender or offer to exchange Company Stock held in his Company Match-Stock Account shall not be treated as a direction to reinvest described in the preceding sentence. In lieu of making purchases or sales of Company Stock in the open market or from the Company to effectuate transactions with respect to the Company Stock Fund, the Trustee, in its discretion, may match purchases and sales of Company Stock directed by two or more Participants to be made at substantially the same time. In such event, the price at which shares were purchased and sold shall be determined by the Trustee as near as practicable to VIII-2 33 the then prevailing average price of such shares in the open market. 8.3 ESOP Diversification Election. Each Participant who has completed 10 or more years of participation in the Plan and who has reached age 55 (a "qualified Participant") may elect (on a Plan form provided by the Committee), within 90 days after the close of each Plan Year during the "election period", to direct the Trustee to reinvest up to 25% (50% for any Plan Year after reaching age 60 and completing 10 or more years of participation) of his Company Match-Stock Account (to the extent such portion exceeds the amount to which a prior election under this Section 8.3 has been made) in one or more of the investment funds offered under the profit sharing feature of the Plan, provided the Plan then offers at least three investment options (other than one investing in qualifying employer securities) that qualify for diversification purposes under Code Section 401(a)(28). The "election period" shall be the six-Plan Year period beginning with the Plan Year the Participant first became a qualified Participant. Such reinvestment shall be made as soon as the Committee deems it practicable and in no event later than 180 days after the close of the Plan Year for which the election is made. If the Plan does not offer three qualifying investment options, the portion of the Company Match-Stock Account covered by the election shall be distributed to the qualified Participant by the Trustee within 180 days after the close of the Plan Year for which such election was made, notwithstanding anything in the Plan to the contrary; provided, however, if the vested amount of such Participant's Accounts exceeds (or at the time of any prior withdrawal exceeded) $3,500, the Participant must VIII-3 34 consent in writing to the distribution and absent such consent, such distribution shall not be made from the Plan. 8.4 Voting of Company Stock. Shares of the Company Stock held by the Trustee in a Participant's Accounts under the Company Stock Fund will be voted by the Trustee in accordance with written instructions from the Participant; provided, however, that if the Trustee has not received written voting instructions from a Participant with respect to shares held in his Company Match-Stock Account at least five days prior to the date of the meeting at which such vote is to be taken, the Trustee shall vote any stock in such Account in such manner as the Trustee determines to be in the best interests of the Participant. Notice of any such meeting shall be given by the Trustee to the Participant and a request for voting instructions shall be made by the Trustee at such time and in such form as may be provided by rules and regulations adopted by the Committee. Any provision herein requiring a Participant to give notice or a direction to the Trustee may be accomplished by such Participant delivering written evidence of such notice or such direction to the Committee and the Committee shall transmit such information to the Trustee promptly upon receipt of such written evidence. For purposes hereof, the Trustee shall be deemed to have received any such notice or direction when such written evidence thereof is delivered to the Committee. Notwithstanding anything in the Plan to the contrary, in administering the voting of shares of Company Stock pursuant to the applicable provisions of the Plan, it is intended that the confidentiality of the votes made by Participants pursuant to the provisions of the Plan shall be VIII-4 35 maintained by the Trustee and the Committee as contemplated in Section 203 of the General Corporation Law of the State of Delaware. 8.5 Tender and Exchange Offers. The provisions of this Section 8.5 shall apply in the event that a tender offer, which is subject to Section 14(d)(1) of the Securities Exchange Act of 1934, as amended, is made for shares of Company Stock or an offer to exchange securities of another company for shares of Company Stock, which is subject to the Securities Act of 1933, as amended, is made. Upon such a tender or exchange offer occurring, the Company and the Trustee shall utilize their best efforts to notify each affected Participant and to cause to be distributed to him such information as will be distributed to the shareholders of the Company generally in connection with any such tender or exchange offer and a form by which the Participant may direct in writing the Trustee as to the action, as set forth below, to take on behalf of that Participant with respect to his Accounts invested in the Company Stock Fund. If the Trustee does not receive such written directions from a Participant, the Trustee shall not tender or offer to exchange any shares of Company Stock held in the Participant's Accounts invested in the Company Stock Fund. (a) Cash Tender Offer. In connection with a cash tender offer, a Participant may direct the Trustee to tender any or all shares of Company Stock held in the Participant's Accounts invested in the Company Stock Fund. Any cash received by the Trustee as a result of such tender shall be reinvested by the Trustee in one or more of the investment options provided for in the Plan as specified by the VIII-5 36 Participant in his tender direction (which may include the Company Stock Fund if Company Stock is available for purchase, or is expected to be available for purchase within a reasonable period, after such tender), and absent an investment direction such cash shall be automatically reinvested as provided in the default election under Attachment A. (b) Exchange Offer. In connection with an exchange offer, a Participant may direct the Trustee to offer for exchange any or all shares of Company Stock held in the Participant's Accounts invested in the Company Stock Fund. Any property received by the Trustee in connection with such exchange shall be held by the Trustee under the Plan in separate accounts for the affected Participants; however, if such property does not constitute "qualifying employer securities" under ERISA, the Participant shall be given an opportunity to direct the Trustee to reinvest the proceeds of such property (which the Trustee shall sell) in one or more of the investment options provided for in the Plan (which may include the Company Stock Fund if Company Stock is available for purchase after such exchange) and absent such an investment direction, automatically as provided in the default election under Attachment A. (c) Tender and Exchange Offer. In connection with a combination tender and exchange offer, a Participant may direct the Trustee to tender and offer for exchange any or all shares of Company Stock held in the Participant's Accounts invested in the Company Stock Fund with any cash VIII-6 37 received by the Trustee as a result of such tender treated as provided in (a) above and any property received by the Trustee in connection with the exchange treated as provided in (b) above. A tender or exchange offer direction given by a Participant may be revoked by the Participant by completion of the form prescribed therefor by the Committee provided such form is filed with the Trustee at least two business days prior to the withdrawal-date-deadlines provided for in the regulations with respect to tender or exchange offers prescribed by the Securities and Exchange Commission. The Trustee shall use its best efforts to effect, on a uniform and nondiscriminatory basis, the sale or exchange of the shares of Company Stock as directed by the Participants. However, neither the Committee nor the Trustee insures that all or any part of the shares of Company Stock directed by a Participant to be tendered or exchanged will be accepted under the tender or exchange offer. Any such shares not so accepted shall remain in the Participant's Accounts and the Participant shall continue to have the same rights with respect to such shares as he had immediately prior to the Trustee's tendering of the shares. If a tender or exchange offer is made, the Committee shall adopt such rules, prescribe the use of such special administrative forms and procedures, delegate such authority, take such action and execute such instruments or documents and do every other act or thing as shall be necessary or in its judgment proper for the implementation of this Section VIII-7 38 8.5. In administering the tendering or exchange of shares of Company Stock, it is intended that the confidentiality of the tenders or exchanges, as the case may be, made by the Participants shall be maintained by the Trustee and the Committee as contemplated in Section 203 of the General Corporation Law of the State of Delaware. (d) For purposes of this Section 8.5, each Participant shall be the named fiduciary with respect to the shares of Company Stock held by the Trustee in the Participant's Accounts under the Company Stock Fund. 8.6 Put Option. Except as provided below, shares of Company Stock acquired with the proceeds of an exempt loan may not at that time or any time thereafter be subject to any put, call, option, buy-sell or other similar arrangement and the provisions of this Section 8.6 shall continue to apply to such shares notwithstanding the termination of the Plan or an amendment by which the Plan ceases to be a leveraged employee stock ownership plan under Code Section 4975(e)(7). In the event and to the extent a former Participant or Beneficiary is distributed ESOP Shares (shares from the ESOP portion of this Plan) which are not readily tradable on an established securities exchange or which are subject to a trading limitation (as defined in Treas. Reg. Section 54.4975-7(b)(1)), such former Participant or Beneficiary shall be granted, at the time that such ESOP Shares are distributed to him, a put option to sell such ESOP Shares to the Plan (which put option is nonbinding with respect to the Plan), and then, if refused by the Plan, to the Company (or its delegate). The put option shall extend for a period of 60 days following the date that such ESOP VIII-8 39 Shares are distributed to the former Participant or Beneficiary, at which time the put option will temporarily lapse. After the end of the Plan Year in which such put option lapses, and following notification to each former Participant or Beneficiary who continues to hold such distributed ESOP Shares of the value of such ESOP Shares as of the end of such Plan Year, each such former Participant or Beneficiary shall have an additional put option for the 60-day period immediately following the date such notification is given to such former Participant or Beneficiary. The period during which the put option is exercisable shall not include any period during which the Participant or Beneficiary is unable to exercise such put option because the Company is prohibited from honoring it by federal or state law. To exercise this put option, a former Participant or Beneficiary shall submit written notice to the Committee of his desire to have the Plan or Company (or its delegate) purchase all or a designated portion of such ESOP Shares which were distributed to him. Upon receipt of such written notice, the Committee, on behalf of the Plan, shall have the right to direct the Trustee to purchase all or a portion of the tendered ESOP Shares on the terms set forth below. If the Committee, on behalf of the Plan, declines to direct the Trustee to purchase the tendered ESOP Shares or a portion thereof, it shall notify the Company of such determination and shall submit to the Company the former Participant's or Beneficiary's written notice of his desire to have the Plan or the Company (or its delegate) purchase all or a designated portion of the ESOP Shares which were distributed to him. Upon receipt of such written notice, the Company (or its delegate) shall purchase the tendered ESOP Shares or such portion VIII-9 40 thereof as was not purchased by the Plan on the terms set forth below. It is specifically provided that the trustee or custodian of a rollover individual retirement account of a former Participant shall have the same put option as described herein with respect to such former Participant. Any ESOP Shares purchased by the Plan or the Company (or its delegate) pursuant to the put option provided in this Section 8.6 shall be purchased as soon as practicable after the exercise of such put option, at a price equal to the fair market value of ESOP Shares as of the most recent valuation of ESOP Shares preceding the date of such purchase; provided, however, that in the case of purchase from a "disqualified person," as defined in section 4975(e)(2) of the Code, such fair market value shall not exceed the fair market value of ESOP Shares at the date of such purchase. Payment by the Plan or the Company (or its delegate) for ESOP Shares pursuant to this put option shall be, as determined by the Company, by a single lump sum cash payment or, if the distribution constitutes a total distribution, in substantially equal annual installments (beginning no later than 30 days after the date the put option is exercised) over a period of not more than five years after the put option is exercised. The purchaser must pay a reasonable rate of interest and provide adequate security for amounts not paid after 30 days. 8.7 Independent Appraiser. Notwithstanding anything in the Plan to the contrary, for Plan purposes all valuations of shares of Company Stock (or any other employer securities) which are not readily tradable on an established securities market shall be made at least annually by an independent appraiser meeting requirements VIII-10 41 similar to the requirements of the regulations prescribed under Code Section 170(a)(1). VIII-11 42 SECTION IX TYPES OF ACCOUNTS 9.1 After-Tax Accounts. The Committee shall cause to be maintained for each Participant a separate After-Tax Account which shall reflect his own After-Tax Contributions made to this Plan, if any, and the investment (earnings/losses) of such contributions in the investment funds permitted under Attachment A. The Committee shall also cause to be maintained a subaccount thereunder to reflect his After-Tax Contributions made prior to 1987, if any. 9.2 401(k) Accounts. The Committee shall cause to be maintained for each Participant a separate 401(k) Account which shall reflect his own 401(k) Contributions made to the Plan, if any, and the investment (earnings/losses) of such contributions in the investment funds permitted under Attachment A. 9.3 Rollover Accounts. The Committee shall cause to be maintained for each Participant a separate Rollover Account which shall reflect his Company matching contributions made prior to 1987, if any, his old ESOP and/or G-P Plan Account, and his rollover contributions made to the Plan, if any, and the investment (earnings/losses) of such contributions in the investment funds permitted under Attachment A. 9.4 Company Match-Cash Accounts. The Committee shall cause to be maintained for each Participant a separate Company Match-Cash Account which shall reflect the Matching Cash Contributions made on his behalf and the investment (earnings/losses) of such contributions in the investment funds permitted under Attachment A. IX-1 43 9.5 Company Match-Stock Accounts. The Committee shall cause to be maintained for each Participant a separate Company Match-Stock Account which shall reflect the Employer's Matching Stock Contributions made on his behalf and the cash and shares of Company Stock held in such Account. 9.6 Account Information. The Committee shall deliver or cause to be delivered to each Participant at least annually a statement, in such form as the Committee shall determine, setting forth pertinent information relative to such Participant's Accounts. Such statements may be delivered by mailing the same to the Participant at his address as shown by the Committee's records, and such statement shall, for all purposes, be deemed to have been accepted as correct unless the Committee is notified in writing to the contrary within 30 days after the date of delivery thereof to the Participant. IX-2 44 SECTION X ALLOCATIONS AND ACCOUNT BALANCES 10.1 Allocation of Participant Contributions. A Participant's 401(k), After-Tax and/or Rollover Contributions shall be credited currently to his 401(k) Account, After-Tax Account and Rollover Account, respectively. 10.2 Allocation of Matching Contributions. The Employer's Matching Cash Contributions and Matching Stock Contributions made on behalf of a Participant shall be credited currently to his Company Match-Cash Account and Company Match-Stock Account, respectively. 10.3 Calculation of Account Balances. The Current Balance of any Account on any Valuation Date shall be (i) with respect to an Account invested in a mutual fund, the fair market value of the units allocated to such Account, (ii) with respect to an Account invested in a GIC fund, the "book value" of such account as reported by the insurance company and/or bank, subject to any applicable market value adjustments as provided in the investment contract, and (iii) with respect to the Company Stock Fund, the amount of cash and the number of shares of Company Stock credited to such Account as of such Valuation Date. X-1 45 SECTION XI LIMITS ON BENEFITS 11.1 Applicability of Restrictions. The special restrictions upon benefits contained in this Section XI supersede and control any other provisions of the Plan in conflict therewith; however, the provisions of Code Section 415 that may not be applied in more than one manner are hereby incorporated by reference and shall control over any Plan provision in conflict therewith. 11.2 Special Definitions Applicable to Section XI. For purposes of this Section XI, the following words and phrases shall have the meanings stated below: (a) Adjustment means the adjustment made for increases in the cost of living pursuant to Code Section 415(d). (b) Annual Addition means, with respect to a Participant, the sum for any Plan Year (which shall also be the limitation year for Code Section 415 purposes of: (1) Employer contributions; (2) Employee contributions; (3) forfeitures; and (4) amounts described in Code Sections 415(1)(1), 419(e) and 419A(f)(2) allocated to such Participant's accounts in a defined contribution plan of an Employer or Affiliate. 11.3 Defined Contribution Limit. Notwithstanding any provision of the Plan to the contrary, in no event shall the Annual Additions with respect to a Participant in a defined contribution plan for a Plan Year exceed the lesser of: (a) $30,000 (or, if greater, 1/4th of the Code Section 415(b)(1)(A) dollar limitation in effect as of the beginning of the Plan Year), subject to Adjustment; or XI-1 46 (b) 25% of the Participant's Code Section 415 Compensation (as defined below) for such Plan Year. The compensation limit referred to in (b) above shall not apply to any contribution for medical benefits (within the meaning of Code Section 419A(b)(2)) after separation from service which is otherwise treated as an Annual Addition, or any amount otherwise treated as an Annual Addition under Code Section 415(1)(1). For purposes of this Section XI, Code Section 415 Compensation means (i) a Participant's earned income, wages, salaries, and fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the employer maintaining the plan to the extent that the amounts are includable in gross income (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements and expense allowances), (ii) amounts described in Code Sections 104(a)(3), 105(a) and 105(h), but only to the extent that these amounts are includable in the gross income of the Employee, (iii) amounts paid or reimbursed by the Employer for moving expenses incurred by the Employee, but only to the extent that these amounts are excludable from gross income of the Employee, (iv) the value of a nonqualified stock option granted to an Employee, but only to the extent such value is included in the gross income of the Employee for the taxable year in which granted and (v) the amount included in the gross income of the Employee upon making the election under Code Section 83(b) and excluding the following: (a) Contributions made by the Employer to a plan of deferred compensation to the extent that, before the application of the Code Section 415 limitations to that plan, XI-2 47 the contributions are not includable in the gross income of the Employee for the taxable year in which contributed. In addition, Employer contributions made on behalf of an Employee to a simplified employee pension described in Code Section 408(k) are not considered as compensation for the taxable year in which contributed to the extent such contributions are deductible by the Employee under Code Section 219(b)(7). Additionally, any distributions from a plan of deferred compensation are not considered as Code Section 415 Compensation, regardless of whether such amounts are includable in the gross income of the Employee when distributed. However, any amounts received by an Employee pursuant to an unfunded non-qualified plan may be considered as Code Section 415 Compensation in the year such amounts are includable in the gross income of the Employee; (b) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by an Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture (see Code Section 83 and the regulations thereunder); (c) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and (d) Other amounts which receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includable in the gross income of the Employee), or contributions made by an Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in Code Section XI-3 48 403(b) (whether or not the contributions are excludable from the gross income of the Employee). Compensation for any limitation year (Plan Year) is the compensation actually paid or includable in gross income during such year. 11.4 Limitation for Two Types of Plans. If a Participant is at any time a participant in both a defined benefit plan and a defined contribution plan maintained by an Employer or an Affiliate, the sum of the "defined benefit plan fraction" and the "defined contribution plan fraction" for any Plan Year may not exceed 1.0 and, if necessary, the annual benefit of the defined benefit plan will be reduced first so that the sum of the fractions will not exceed 1.0; in no event will the annual benefit be decreased below the amount of the accrued benefit to date. If additional reductions are required for the sum of the fractions to equal 1.0, the reductions will then be made to the Annual Additions of the defined contribution plans. For the purposes of applying the foregoing limitations, all defined benefit plans and all defined contribution plans, whether or not terminated, of an Employer or Affiliate are to be treated as one defined benefit plan and one defined contribution plan, respectively; however, if defined contribution plans are combined (or the combined limit is exceeded) and the Annual Addition is required to be reduced, the Annual Addition to this Plan shall be reduced first. 11.5 Special Rules for Plans Subject to Overall Limitations Under Code Section 415(e). The Annual Addition for any Plan Year beginning before January 1, 1987, shall not be recomputed to treat all employee contributions as an Annual Addition. If the Plan satisfied the applicable requirements of Section 415 of the Code as in effect for all Plan Years beginning before January 1, 1987, an amount shall be subtracted from the numerator of the defined XI-4 49 contribution plan fraction (not exceeding such numerator) as prescribed by the Secretary of the Treasury so that the sum of the defined benefit plan fraction and defined contribution plan fraction computed under Section 415(e)(1) of the Code does not exceed 1.0 for such Plan Year. 11.6 Reallocation of Excess Contributions. If due to a reasonable error in estimating compensation or in determining the amount of his 401(k) Contributions, an allocation to a Participant shall exceed the amounts permitted to be allocated thereto for any Plan Year under this Section XI, the Participant's After-Tax Contributions, to the extent not matched by the Employer, shall be returned to the Participant with any allocable Trust gains thereon, and if the excess is not cured by such action, then the Participant's 401(k) Contributions (including, with respect to limitation years beginning after December 31, 1995, allocable Trust gains thereon), to the extent not matched by the Employer, shall be returned to the Participant and if the excess is still not cured, the excess attributable to Employer matching contributions shall be carried over to the next Plan Year and allocated to such Participant for that next Plan Year, provided the Participant remains covered by the Plan, before any other Employer contributions may be allocated to the Participant, subject to the limitations of this Section XI. Any amounts not able to be so allocated shall be allocated to all other Participants. XI-5 50 SECTION XII VESTING OF ACCOUNTS 12.1 Accounts. A Participant who is an Employee on or after January 1, 1995, shall have a full 100% vested (nonforfeitable) interest in the Current Balances of all his Accounts. XII-1 51 SECTION XIII DISTRIBUTIONS, WITHDRAWALS, FORFEITURES AND LOANS 13.1 Termination of Service. Upon a Participant's termination of employment with the Employers and Affiliates, the total vested portion of the Current Balances of his Accounts shall be immediately distributed to him in a lump sum if the vested Current Balances of his Accounts do not exceed (and at the time of any prior withdrawal did not exceed) $3,500. If the Participant's Accounts are not immediately distributable as provided above, the distribution of his Accounts shall be made or begin under the Plan on the Valuation Date coincident with or immediately following the earliest of such Participant's 65th birthday, death or written consent to such distribution; however, a Participant may elect to defer such distribution until a date that is after his 65th birthday and prior to the April 1 next following the year in which he reaches age 70 1/2. Distributions not immediately cashed out under the provisions above shall be paid in five substantially equal annual installments, unless the Participant elects, by filing the proper form with the Plan prior to the commencement of the installment payments, to receive a lump sum. A Participant who is receiving installments may elect at any time to accelerate the balance of such installments. Notwithstanding anything in the Plan to the contrary, amounts held in the Participant's 401(k) Account may not be distributed prior to the earliest of: (a) his termination of service (within the meaning of Code Section 401(k)), disability, or death; (b) his attainment of age 59 1/2; (c) a financial hardship as provided in Section 13.4; XIII-1 52 (d) the termination of the Plan without establishment of a successor plan; (e) the date of the sale or other disposition by an Employer to an entity that is not an Affiliate of substantially all of the assets (within the meaning of Code Section 409(d)(2)) used by such corporation in a trade or business of such corporation with respect to a Participant who continues employment with the corporation acquiring such assets, provided the Employer continues to maintain the Plan; or (f) the date of the sale or other disposition by an Employer of its interest in a subsidiary (within the meaning of Code Section 409(d)(3)) to an entity which is not an Affiliate with respect to a Participant who continues employment with such subsidiary, provided the Employer continues to maintain the Plan. 13.2 401(k) Account - Age 59 1/2 Withdrawals. A Participant who is an Employee and age 59 1/2 or older may withdraw all or a specified portion of the Current Balance of his 401(k) Account as of any Valuation Date; provided, however, only two such withdrawals may be made in any calendar year. 13.3 After-Tax Account and Rollover Account Withdrawals. A Participant who is an Employee may withdraw all or a specified portion of the Current Balance of his After-Tax Account, and/or Rollover Account as of any Valuation Date; provided, however, only two such withdrawals may be made in any calendar year. Withdrawals from an After-Tax Account shall be taken first from any pre-1987 contributions made by the Participant. If a Participant withdraws an After-tax Contribution that was made after 1994 and which has not been held in the Plan for at least 24 months, the Participant XIII-2 53 will be ineligible to receive a Company matching contribution during the six-month period following such withdrawal. 13.4 Hardship Withdrawals. A Participant, who is an Employee and has already obtained all other distributions and all nontaxable loans, if any, currently available to him under the Plan and all other qualified plans of the Employer and its Affiliates, may at any time make a request for a hardship withdrawal from his Accounts; however, no such request shall be approved by the Committee unless it finds that the Participant is facing an "immediate and heavy financial need" (as defined below). The amount of a hardship withdrawal shall be limited to an amount that does not exceed that amount which the Committee determines is required to meet the immediate and heavy financial need created by the hardship, including any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the hardship distribution. A Participant shall specify which Accounts the hardship distribution is to be made from; however, a hardship withdrawal shall not include any earnings credited to a 401(k) Account. Upon making a hardship withdrawal, no Company matching contributions shall be made with respect to such Participant during the six-month period following the hardship withdrawal. A hardship withdrawal shall be made in a lump sum as soon as practical after the date the Participant's requested hardship withdrawal is approved. The following standards shall be applied on a uniform and non-discriminatory basis in determining the existence of a hardship. A financial need shall be deemed to be an "immediate and heavy financial need" only if it is on account of: (1) Uninsured medical expenses described in Section 213(d) of the Code incurred or to be incurred by the Participant, the Participant's spouse, or any XIII-3 54 dependents of the Participant (as defined in Section 152 of the Code); (2) Costs directly related to the purchase (excluding mortgage payments) of the principal residence of the Participant; (3) Payment of tuition, related educational fees, and room and board expenses for the next 12 months of post-secondary education for the Participant, his or her spouse, children, or dependents (as defined in Section 152 of the Code); (4) The need to prevent the eviction of the Participant from his principal residence or foreclosure on the mortgage of the Participant's principal residence; or (5) Any other "safe harbor" need provided by IRS regulations or rulings; and may be an "immediate and heavy financial need," as determined by the Committee based on all relevant facts and circumstances, if it is on account of: (6) Uninsured losses due to theft, fire, vandalism or natural disasters; (7) Needed supplemental income to offset loss of earnings to Participants (or their spouses) who are on medical or disability leaves of absence and whose income has been reduced as a result thereof; XIII-4 55 (8) Payment of final obligations incurred in connection with an involuntary move out of an Employer-owned house; (9) Needed supplemental income to offset the loss of earnings of a Participant's spouse due to a layoff or involuntary termination of such spouse's employment; (10) Payment of a court-ordered divorce property settlement and related costs, including attorneys' fees and court costs; (11) Expenses associated with the sale of the Participant's primary residence (and if associated with an Employer transfer, not paid by the Employer); (12) Expenses associated with the addition of a living area to the Participant's primary residence; (13) Expenses associated with the refinancing of a mortgage on the Participant's primary residence; (14) Funeral expenses for the Participant's spouse, children, parents, brothers, sisters, or spouse's parents; or (15) Uninsured medical expenses of members of the Participant's family (including children, parents, brothers, sisters and spouse's parents) that are not medical expenses covered by item (1) above. XIII-5 56 Unless the Committee has actual knowledge to the contrary, a distribution will be treated as "necessary to satisfy a financial need" if the Participant furnishes the Committee a written representation that the Participant's need cannot reasonably be relieved: (1) through reimbursement or compensation by insurance or otherwise; (2) by liquidation of the Participant's assets, including those of his spouse and minor children; (3) by cessation of his contributions under the Plan; or (4) by other distributions or nontaxable (at the time of the loan) loans from plans maintained by the Employer or by any other employer, or by borrowing from commercial sources on reasonable commercial terms in an amount sufficient to satisfy the need. 13.5 Loans. A Participant (or Beneficiary), who is a "party in interest" as defined in ERISA Section 3(14), may borrow from his Accounts under the Plan, subject to the following provisions of this Section 13.5. A Participant seeking a loan hereunder must complete a written application which shall specify the terms pursuant to which the loan is to be made, and provide such other information and documentation as the Committee shall reasonably require. The Committee shall, in accordance with its established standards, review and approve or disapprove a completed application as soon as practicable after its receipt thereof, and shall XIII-6 57 promptly notify the applying person of such approval or disapproval. A loan shall be subject to the following requirements: (a) The loan may not exceed the lesser of (l) $50,000, reduced by the excess, if any, of the highest outstanding balance of such plan loans to the Participant during the one-year period ending on the day before the loan is made over the outstanding balance of such plan loans, if any, on the date when the loan is made, or (ii) 50% of the value of the Participant's vested interest in his Accounts. For this purpose, all plans of the Employers and Affiliates shall be considered one plan; (b) The loan must be for at least $1,000; (c) The loan shall provide for a fixed rate of interest for the entire term of the loan. The applicable interest rate for Plan loans shall be a reasonable rate equal to a commercially comparable rate as established by the Committee from time to time consistent with the applicable provisions of the Code and other legal requirements; (d) The loan shall be for a term designated by the borrower, which must be in a multiple of six months, but cannot be less than six months or exceed 60 months; (e) No loan may be made within six months of the date of the borrower's most recent loan from the Plan and no more than two loans may be outstanding at any time; and XIII-7 58 (f) If a loan is made from the Company Match-Stock Account and involves the sale of Company Stock by the Trustee, the Participant will not be eligible to receive a Company matching contribution during the six-month period following such loan. Each loan shall be evidenced by a promissory note executed by the borrower and payable to the Trust, due and payable in full not later than the earlier of: (i) its fixed maturity date meeting the requirements above or (ii) the time which the person ceases to be a party in interest to the Plan. The promissory note shall provide for the payment of equal installments each pay period of principal and interest on the unpaid balance of principal at the fixed annual rate on the date the note is executed and further provide, with respect to a person who is an Employee, that the payments shall be made through payroll deductions. The promissory note shall evidence such additional terms as are required by this Section 13.5 or the Committee. Loans shall be funded by exhausting Accounts or portions thereof in the order designated by the borrower. Each loan shall be made only from the Accounts of the borrowing Participant, shall be taken from the investment funds in which such Accounts are invested in accordance with the instructions of the Participant, and a loan (and its note) shall be treated as a separate investment of, and shall be allocated solely to, the Participant's Accounts from which the Participant's loan was funded. A person may elect to prepay the entire balance of the loan at any time. No partial prepayments will be permitted. All loan repayments shall be transmitted by the Employer to the Trustee as soon as practicable after such amounts are withheld or received. XIII-8 59 Each loan repayment of principal and interest will be allocated to the Participant's Accounts in accordance with the Participant's current investment direction for future contributions to the Plan, or, if there is no current investment direction in effect, then in the investment fund so designated on Attachment A for default elections until changed by the Participant in accordance with Section 8.2. Each loan under the Plan shall be secured by 50% of the present value of the Participant's entire vested interest in the Plan. If a Participant with an outstanding loan takes a Leave of Absence or incurs a temporary disability such that the regular installment payments cannot be made on a payroll deduction basis, the Participant will be required to make the regular payments of principal and interest at the time and place established by the Committee. If any time prior to the full repayment of a loan, the Participant or Beneficiary should cease to be a party in interest, or the Plan should terminate, or any event of default otherwise occurs under the documents evidencing the loan, the unpaid balance owed by the Participant on the loan shall be due and payable in full 90 days after such event without notice or demand. If the Participant or Beneficiary does not repay the full amount of the unpaid balance within the time established by the Committee, the Committee may take whatever steps it deems necessary to collect the unpaid balance of the loan plus any accrued interest; provided, however, a Participant's 401(k) Account shall not be reduced by reason of a loan default prior to the date that a distribution event under the Plan occurs that permits such a reduction upon distribution. XIII-9 60 Notwithstanding anything to the contrary contained herein, each loan shall be made only in accordance with the regulations and rulings of the Internal Revenue Service, including that all plans of the Employers and their Affiliates be treated as one plan, and other applicable state and federal laws. The Committee shall act in its sole discretion to ascertain whether the requirements of such laws, regulations, and rulings have been met. 13.6 Investment Fund Withdrawal Order. Distributions, withdrawals and loans under the Plan shall, if the Participant has his Account(s) invested in more than one investment fund and such distribution, withdrawal or loan does not represent 100% of the Participant's interest in the Plan, be taken from each investment fund(s) specified by the Participant. 13.7 Direct Rollover Distributions. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section 13.7, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and the portion of any distribution that is not XIII-10 61 includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). Eligible retirement plan: An eligible retirement plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. Distributee: A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse. Direct rollover: A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. 13.8 30-Day Waiver. If a distribution is one to which Code Sections 401(a)(11) and 417 do not apply, such distribution may commence less than 30 days after the notice required under Section 1.411(a)-11(c) of the Income Tax Regulations is given, provided that: (1) the plan administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a XIII-11 62 distribution (and, if applicable, a particular distribution option), and (2) the Participant, after receiving the notice, affirmatively elects a distribution. XIII-12 63 SECTION XIV PROVISIONS CONCERNING PAYMENT OF BENEFITS 14.1 Medium of Withdrawals/Distributions. Except as otherwise provided in this Section XIV, withdrawals and distributions shall be made by check, except to the extent that the Participant (or Beneficiary) requests the distribution from the Company Stock Fund be made in shares of Company Stock. 14.2 Time of Distribution. Subject to a deferral election pursuant to Section 13.1, all distributions shall be made or commence as soon as practicable and in any event shall begin within 60 days after the end of the later of the Plan Year in which the Participant reaches age 65 or terminates employment; provided, however, in all events distribution must be made or commence prior to the April 1 following the calendar year in which a Participant reaches age 70 1/2, regardless of whether he has then terminated employment. The required minimum distribution shall be the balance of the Participant's Accounts as of the end of the calendar year preceding the applicable "distribution year" (as defined in the regulations) divided by the Participant's applicable life expectancy (without redetermination), less any withdrawals made by the Participant during such year. The required minimum distribution as described above shall be the automatic form paid under the Plan in a single sum with respect to each distribution year. If the distribution of the Participant's interest has begun under the Plan and the Participant dies before his entire interest has been distributed to him, the remaining portion of such interest shall be distributed at least as rapidly as under the method of distribution being used as of the date of his death. XIV-1 64 Further, distribution due to the death of a Participant shall be paid in full to his Beneficiary within 60 months of his date of death. Notwithstanding anything to the contrary, the provisions of Code Section 401(a)(9), including Reg. Section 1.401(a)(9)-2, are hereby incorporated by reference and shall control over any provision in conflict therewith. 14.3 Designation of Beneficiaries. The Employee's application to become a Participant shall designate one or more Beneficiaries to receive benefits arising under the Plan in the event of his death; however, if the Participant is married, then notwithstanding a designation to the contrary, the Participant's spouse shall automatically be his sole primary Beneficiary under the Plan unless such spouse consents in writing to the designation of another person as a Beneficiary which designation is specific as to the person and, if applicable, form of benefit, acknowledges in such consent the effect of such designation on the spouse's right to benefits under the Plan, and such spousal consent is witnessed by a notary public, except where such requirement is waived by the Treasury Regulations, and the designation cannot be modified without a new spousal consent. Designated Beneficiaries may include the estate of the Participant, persons who are the natural objects of the Participant's bounty and any persons designated by the Participant to share in the benefits of the Plan after the death of the Participant. If more than one person is named, the Participant must indicate the shares and/or precedence of each person. Subject to the above spousal consent, a Participant may change his designated Beneficiaries from time to time without notice to or consent of any Beneficiary; however, any changes by a married Participant will require a new spousal consent. Any designation of Beneficiaries ("Designation") and any revocation or change thereof shall be made in writing in such form as the XIV-2 65 Committee may from time to time prescribe and shall be effective when filed with the Committee; provided, however, a Participant's marriage subsequent to a Designation shall automatically revoke all Designations theretofore filed by such Participant and a divorce shall automatically revoke a designation of that former spouse as a Beneficiary of the Participant except as otherwise provided in a qualified domestic relations order. If no Designation is in effect upon the death of a Participant, then any benefit payment which would otherwise be payable to the Beneficiaries designated by such Participant shall be paid to the person constituting his first surviving class of the following classes: (a) surviving spouse; (b) the estate of such Participant, upon receipt by the Committee of proof satisfactory to it that such person constitutes the first such surviving class. If under the foregoing provisions of this Section 14.3, a payment is made to a Participant or Beneficiary, such payment shall be a complete discharge of any liability of the Plan and Trust to such Participant or Beneficiary and shall be a complete settlement of any claim, right or interest in or to such payment. XIV-3 66 SECTION XV SPECIAL PAYMENT PROVISIONS 15.1 Payments to Minors and Incompetents. If any person entitled to receive any benefits hereunder is legally incompetent by reason of minority or otherwise, the Committee may instruct the Trustee to make distribution to the parent(s) or legal guardian(s) of such person, and such distribution shall constitute a complete discharge of all liability with respect to such benefit. 15.2 Non-Assignability of Rights. Except for the right of a Participant to name one or more Beneficiaries to receive distribution of benefits upon death of a Participant or as otherwise provided by a qualified domestic relations order, as defined in Code Section 414(p), or other applicable law, none of the benefits, payments, proceeds, claims or rights of any person is or may become entitled to receive under the Plan, contingently or otherwise, shall be subject, through legal or equitable proceedings or otherwise, to any claim of any creditor of any such person prior to actual receipt thereof by such person, nor shall any such person have any right to assign, anticipate, transfer or encumber any of the benefits, payments, proceeds, claims or rights he may expect to receive, contingently or otherwise, under this Plan, and any such attempted assignment, anticipation, transfer or encumbrance shall be wholly and absolutely void. An alternate payee under a qualified domestic relations order ("QDRO") may receive a distribution pursuant to the QDRO at any time, irrespective of whether the Participant has attained his earliest retirement age under the Plan, as defined in Code Section 414(p), provided the QDRO specifies distribution at that time or permits an agreement between the Plan and the alternate payee to authorize an earlier distribution. XV-1 67 SECTION XVI ASSOCIATED COMPANIES 16.1 Adoption of Plan. Any Affiliate which the Board shall designate an "Associated Company" and declare eligible to adopt and participate in the Plan may adopt and become a party to this Plan and the Trust Agreement provided for herein subject to and upon such terms and conditions as the Board may prescribe, including, without limitation, conditions as to: (a) the instruments to be executed and delivered by such Associated Company to the Trustee and to the Company; (b) the extent to which the Company shall act as agent or representative of such Associated Company under the Plan; and (c) authorization to the Company to act for such Associated Company and its employees who are Participants under the Plan. The Plan shall be effective with respect to each adopting Associated Company and its Employees on such date as shall be approved by the Board and specified in the instruments executed by such Associated Company adopting the Plan. Upon adoption of the Plan by an Associated Company in accordance with the provisions of this Section 16.1, such Associated Company and its Employees shall thereupon be governed and bound by all the terms and provisions of the Plan subject to the terms and conditions upon which such Associated Company adopted the Plan, and, so long as such Associated Company shall continue its participation in the Plan, it shall be an Employer hereunder. 16.2 Withdrawal from Plan. Any Employer (other than the Company) shall have the right to withdraw from the Plan effective at the end of any calendar month by giving at least 60 days' prior XVI-1 68 written notice to the Company and the Trustee. Upon any such withdrawal, the Trustee shall value the assets of the trust fund of the Trust as though such withdrawal date were a Valuation Date and the Current Balances of all the Participant Accounts shall be calculated as provided in Section X. The Trustee shall then set apart that portion of such trust fund which, as certified by the Committee, is attributable to the Participant Accounts of the Participants who are employees of such withdrawing Employer plus any contributions of such Employer not previously allocated to such Participants' Accounts. That portion of the trust fund of the Trust so set apart shall continue to be held by the Trustee in trust under the terms and provisions of the Trust Agreement as though such withdrawing Employer had entered into such Trust Agreement with the Trustee as its own separate trust agreement, and such Employer shall be deemed to have thereupon adopted the Plan as its own separate plan and shall have and may exercise all of the rights, powers and authorities of the Company under the Plan and Trust Agreement. Upon withdrawal of an Associated Company from the Plan, it shall cease to be an Employer under this Plan and shall not be eligible to again adopt and participate in this Plan unless it is again designated an "Associated Company" pursuant to Section 16.1. 16.3 Termination of Employer Participation by Company. The Company may, in its absolute discretion, terminate the participation of any other Employer in the Plan effective at the end of any calendar month by giving at least 60 days' prior written notice to such Employer, the Committee and the Trustee. Any such termination of participation of an Employer shall have the same effect as a voluntary withdrawal by such Employer pursuant to Section 16.2, and the procedures set forth in and the provisions of such section shall be applicable. XVI-2 69 SECTION XVII AMENDMENT AND TERMINATION 17.1 Right to Amend or Terminate. It is the intention of the Company by its adoption hereof to maintain a permanent profit-sharing plan and to continue to make contributions hereunder indefinitely; nevertheless: (a) the Company, by action of the Board, reserves and shall have the right at any time and from time to time to discontinue or terminate the Employers' liability to make contributions hereunder or to reduce or suspend such contributions for a fixed, indeterminate or temporary period of time; (b) the Company, by action of the Board, reserves and shall have the right to amend the Plan (including any Trust Agreement which forms a part hereof) in whole or in part at any time and from time to time and also has authorized and empowered the Committee to amend Attachment A of the Plan as provided in Section 8.1; provided, however, no such amendment or change shall adversely affect the Company's indemnification of the members of the Committee under Section III; and (c) the Company, by action of the Board, reserves and shall have the right to terminate the Plan in its entirety at any time, and such action by the Company shall be binding upon all Employers and their employees. In addition, the Committee shall be authorized and empowered to make any amendments to the Plan of a ministerial nature or which may be required to maintain the qualified status of the Plan under the Code; provided, however, the Committee shall not be authorized to make any amendment that would change the XVII-1 70 Employers' contribution obligations or significantly increase the administrative costs of the Plan or Trust. Written notice of any such action by the Company shall be given to the Committee, the Trustee and the Participants affected thereby, specifying the effective date thereof, and any such action shall be evidenced by an instrument in writing, duly executed by the Company and shall be filed with the Committee and the Trustee. Each amendment of the Plan by the Company shall be binding on each other Employer. Amendments by the Committee shall be similarly effectuated. Any amendment of the Plan may be made effective retroactively if it would be beneficial to the Participants to do so or such amendment is necessary or advisable in order to comply with the provisions of the Code or any rulings or regulations issued thereunder pertaining to employee profit sharing, stock bonus or ESOP plans and trusts. 17.2 Restrictions on Amendment. The rights of the Employers and the Company under Section 17.1 are specifically subject to the restrictions contained in this Section 17.2. No amendment, change or modification shall be made in the Plan (including any Trust Agreement which forms a part hereof) which will adversely change the vesting schedule with respect to any Participant who has three or more years of service, or eliminate any "protected benefit," other than as may be permitted by regulations, or which will give any Employer any rights in funds contributed to the Trust or in any assets of the Trust or which will, without its consent, increase the duties or liabilities of the Trustee. 17.3 Effect of Dissolution or Merger. This Plan shall automatically terminate as to an Employer upon the legal dissolution of such Employer, upon the making of a general assignment for the benefit of its creditors, or upon expiration or forfeiture of its corporate charter. It shall likewise terminate XVII-2 71 as to an Employer upon the merger, consolidation or reorganization of such Employer with any other corporation(s) or other business organization(s) unless such Employer is a surviving corporation or such other corporation(s) or business organization(s) shall, by instrument in writing filed with the Committee and the Trustee prior to the effective date of such merger, consolidation or reorganization, assume the obligations of such Employer hereunder. Written notice of any such automatic termination shall be given to the Trustee by the Committee. 17.4 Effect of Merger, Consolidation or Transfer of Assets. If this Plan is merged or consolidated with any other plan, or its assets or liabilities are transferred to any other plan, each Participant shall be entitled to a benefit immediately after the merger, consolidation or transfer at least equal to the benefit he would have received if he had been entitled to a benefit immediately preceding the merger, consolidation or transfer and the Plan had then terminated. 17.5 Expiration of Trust Term. If this Plan shall not have theretofore been terminated under the provisions hereof, it shall finally terminate upon expiration of the Trust term. 17.6 Distribution upon Termination of Plan. As of the date of termination of this Plan (other than by reason of the payment and distribution of all funds held in the Trust), the trust fund of the Trust shall be revalued as if such date were a Valuation Date and the Current Balances of all Accounts shall be calculated in accordance with Section X. Upon termination of the Plan, and prior to making any distributions from the Plan in connection therewith, the Company shall notify the appropriate District Director of the Internal Revenue Service that the Plan has been terminated and shall obtain a ruling from such District Director as to the effect of such termination. The Committee shall then instruct the XVII-3 72 Trustee, after all obligations to and incurred by it have been paid and allocated to the Participant's Accounts as provided by the Trust Agreement, to distribute to each Participant, or his beneficiary or beneficiaries, the full amount then standing to the credit of his Accounts, such distribution to be made in accordance with Section XIV, and subject to the consent requirements of Section XIII, unless regulations provide otherwise. 17.7 Consent for Alternate Forms of Benefit. Notwithstand-ing anything in the Plan to the contrary, any Plan provision that restricts or denies a Participant through the withholding of consent or the exercise of discretion by some person(s) other than the Participant of an "alternate form of benefit" is null and void. An "alternate form of benefit" encompasses the forms of benefit which provide that (a) a Participant's benefits may be paid in more than one form or (b) payment of a particular form of benefit may commence at some earlier or later than normal date for the commencement of such benefit. XVII-4 73 SECTION XVIII TOP-HEAVY RULES 18.1 Top Heavy Provisions. The following provisions are to be applied to determine if the Plan is top-heavy within the meaning of Code Section 416 and the consequences if it is so determined. Solely for the purpose of determining if the Plan, or any other plan included in a required aggregation group of which this Plan is a part, is top-heavy (within the meaning of Code Section 416(g)) the accrued benefit of an Employee other than a key employee (within the meaning of Code Section 416(i)(1)) shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all bans maintained by the Affiliated Employers, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rule of Code Section 411(b)(1)(C). 18.2 Determination of Whether of Plan is Top-Heavy. (a) Top-Heavy Ratio. The Plan shall be top-heavy for a Plan Year if the current balance of the accounts under the Plan for "key employees" (as defined below), excluding the Accounts of a Participant who is not a key employee in the year of determination but was in a prior year, exceeds 60% of the current balance of the Accounts of all Participants as of a Determination Date. The "top-heavy ratio" shall be determined in accordance with Code Section 416(g). In determining the current balance under the Plan, all distributions made during the Plan Year of the determination plus the four preceding Plan Years shall be included. However, the accounts of any Participant who has performed no services for the Employer during the five-year test period shall be disregarded. (b) Plans to be Aggregated. For purposes of determining whether the Plan is top-heavy, plans of the Employers and XVIII-1 74 Affiliates in which a key employee participates and each other plan of the Employers and Affiliates which enables any such plan to meet the requirements of Code Sections 401(a)(4) or 410 shall be aggregated in determining whether the Plan and such plan(s) are top-heavy (the Required Aggregation Group). However, the Employer may treat any other plan as part of such group if such group would continue to meet the requirements of Code Sections 401(a)(4) and 410 (the Permissive Aggregation Group). (c) Key Employees. A key employee is any Employee or former Employee Participant (or Beneficiary thereof) in an Employer plan who, at any time during the Plan Year or any of the four preceding Plan Years, is (i) an officer of the Employer having annual compensation from the Employer for a Plan Year greater than 50% of the dollar limitation in effect under Code Section 415(b)(1)(A) for the calendar year in which such Plan Year ends, (ii) one of the 10 employees owning both the largest interests in the employer and a greater than 1/2% interest and receiving compensation from the employer greater than the dollar limitation in effect under Code Section 415(c)(1)(A) for the calendar year in which such Plan Year ends, (iii) a 5% owner of the Employer, or (iv) a 1% owner of the Employer receiving annual compensation of more than $150,000 from the Employer. The number of officers who are key employees shall be limited as provided in Code Section 416(i)(1). An Employee who is not a key employee shall be a non-key employee. (d) Determination Date. The Determination Date shall be the last day of the preceding Plan Year. 18.3 If the Plan is Top-Heavy. (a) Minimum Contribution. For each year the Plan is top-heavy, each Employee in the Eligible Class shall receive an Employer contribution equal to the greater of (i) his Employer XVIII-2 75 matching contribution for that Plan Year under the Plan, or (ii) a top-heavy contribution equal to the lesser of (1) 3% of the Participant's compensation, or (2) the percentage at which Employer matching contributions are made for the key employee with the highest percentage. If the highest rate allocated to a key employee for a year in which the Plan is top-heavy is less than 3%, amounts contributed as a result of a salary reduction agreement must be included in determining contributions made on behalf of key employees. Further, in the event the Participant also participates in a defined benefit plan of the Employer or an Affiliate that is top-heavy, the Participant shall receive the minimum top-heavy contribution provided above and shall not accrue the minimum top-heavy benefit required under such other plan. For purposes of this Section XVIII, the term "compensation" shall mean the compensation stated on the employee's Form W-2 for the calendar year in which the Plan Year ends. 18.4 Super Top-Heavy Provision. In determining whether the Plan is super top-heavy for any Plan Year, the rules above shall apply with the following exceptions: (a) In determining the super top-heavy ratio, 90% shall be substituted for 60%, and (b) In computing the denominators of the defined benefit and defined contributions fractions under Code Section 415(e), a factor of 1.0 shall be used instead of 1.25. XVIII-3 76 SECTION XIX ANTIDISCRIMINATION TESTS 19.1 Special Definitions. (a) Family Member. An Individual included in the following group: an Employee's or former Employee's spouse, lineal ascendants or descendants, or the spouses of such lineal ascendants or descendants. (b) Highly Compensated Participant. The term Highly-Compensated Participant includes Highly Compensated active employees and Highly Compensated former employees. A Highly Compensated active employee includes any Employee who performs service for an Employer during the determination year and who, during the look-back year: (i) received Total Compensation from an Employer in excess of $75,000 (as adjusted pursuant to Code Section 415(d)); (ii) received Total Compensation from an Employer in excess of $50,000 (as adjusted pursuant to Code Section 415(d)) and was a member of the top-paid group for such year; or (iii) was an officer of an Employer and received Total Compensation during such year that is greater than 50% of the dollar limitation in effect under Code Section 415(b)(1)(A). Highly Compensated employee also includes: (i) Employees who are both described in the preceding sentence if the term "determination year" is substituted for the term "look-back year" and the Employee is one of the 100 Employees who received the most Total Compensation from the Affiliates during the determination year; and (ii) Employees who are 5% owners at any time during the look-back year or determination year. If no officer has satisfied the Total Compensation requirement of (iii) above during either a determination year or XIX-1 77 look-back year, the highest paid officer for such year shall be treated as a Highly Compensated Participant. For this purpose, the determination year shall be the Plan Year. The look-back year shall be the 12-month period immediately preceding the determination year, or, if elected by the Committee, the same Plan Year as the determination year. A Highly Compensated former employee includes any Employee who separated from service (or was deemed to have separated) prior to the determination year, performs no service for an Employer during the determination year, and was a Highly Compensated active employee for either the separation year or any determination year ending on or after the Employee's 55th birthday. If an employee is, during a determination year or look-back year, a Family Member of either a 5% owner who is an active or former Employee or a Highly Compensated Participant who is one of the 10 most Highly Compensated Participants ranked on the basis of Total Compensation paid by the Affiliates during such year, then the Family Member and the 5% owner or top-ten highly compensated employee shall be aggregated. In such case, the family member and 5% owner or top-ten highly compensated employee shall be treated as a single Employee receiving Total Compensation and Plan contributions or benefits equal to the sum of such Total Compensation and contributions or benefits of the Family Member and 5% owner or top-ten highly compensated employee. The determination of who is a Highly Compensated Participant, including the determination of the number and identity of employees in the top-paid group, the top 100 employees, the number of employees treated as officers and the compensation that is considered, will be made in accordance with Code Section 414(q) and the regulations thereunder. XIX-2 78 (c) Non-Highly Compensated Participant. Any Participant or former Participant who is neither a Highly Compensated Participant nor a Family Member of a Highly Compensated Participant. (d) Total Compensation. For purposes of this Section XIX, Total Compensation shall mean, for any Plan Year, one of the following: (a) the Code Section 415(d)(2) amount, i.e., compensation shall include only the following: (i) The Employee's wages, salaries, fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with an Employer maintaining the Plan to the extent that the amounts are includable in gross income (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a non- accountable plan (as described in Reg. Section 1.62-2(c)), (ii) amounts described in Code Sections 104(a)(3), 105(a), and 105(h), but only to the extent that these amounts are includable in the gross income of the Employee, (iii) amounts paid or reimbursed by an Employer for moving expenses incurred by an Employee, but only to the extent that at the time of the payment it is reasonable to believe that these amounts are not deductible by the Employee under Code Section 217, (iv) the value of a non-qualified stock option granted to an Employee by an Employer, but only to the extent that the value of the option is includable in the gross income of the Employee for the taxable year in which granted, and (v) the amount includable in the gross income of an Employee upon making the election described in Code Section 83(b); (b) the Code Section 415(d)(11)(i) amount, i.e., wages within the meaning of Code Section 3401(a) and all other payments XIX-3 79 of compensation to an Employee by his Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code Sections 6041(d) and 6051(a)(3). This definition of compensation may be modified to exclude amounts paid or reimbursed by the Employer for moving expenses incurred by an Employee, but only to the extent that at the time of the payment it is reasonable to believe that these amounts are deductible by the Employee under Code Section 217. Compensation under Code Section 415(d)(11)(i) must be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2); (c) the 415(d)(11)(ii) amount, i.e., wages within the meaning of Code Section 3401(a) (for purposes of income tax withholding at the source) but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2); or (d) any other safe harbor definition under Code Section 414(s). Whichever definition of Total Compensation is selected by the Committee as being applicable for that period of determination must be used consistently for all Employees for all purposes that refer to Code Section 414(s), e.g., for Code Section 401(a)(4) purposes, and whichever definition is applicable shall also include all elective contributions made by an Employer on behalf of its Employees that are not includable in gross income under Code Sections 125, 402(a)(8) and 402(h). 19.2 401(k) Contributions. (a) A Participant's 401(k) Contributions made shall not exceed $9,240 for the taxable year of the Participant. This XIX-4 80 dollar limitation shall be adjusted annually as provided in Code Section 415(d) pursuant to Regulations. The adjusted limitation shall be effective as of January 1 of each calendar year. (b) In the event that the dollar limitation provided for in Section 19.2(a) is exceeded, the Committee shall direct the Trustee to distribute such excess amount, and any income (or loss) allocable to such amount (as provided in (d) below), to the Participant not later than the first April 15 following the close of the Participant's taxable year. (c) In the event that a Participant is also a participant in (1) another qualified cash or deferred arrangement (as defined in Code Section 401(k)), (2) a simplified employee pension (as defined in Code Section 408(k)), or (3) a salary reduction arrangement (within the meaning of Code Section 3121(a)(5)(D)) and the elective deferrals, as defined in Code Section 402(g)(3), made under such other arrangement(s) and this Plan cumulatively exceed $9,240 (or such amount adjusted annually as provided in Code Section 402(g) pursuant to Regulations) for such Participant's taxable year, the Participant may, not later than March 1 following the close of his taxable year, notify the Committee in writing of such excess and request that his 401(k) contribution under this Plan be reduced by an amount specified by the Participant. Such amount shall then be distributed in the same manner as provided in Section 19.2(b). (d) The income (or loss) allocable to returnable contributions shall equal the sum of the allocable gain or loss for the Plan Year. Income includes all earnings and appreciation, including such items as interest, dividends, rent, royalties, gains from the sale of property, appreciation in the value of stocks, bonds, annuity and life insurance contracts, and other property, without regard to whether such appreciation has been realized. XIX-5 81 The income (or loss) allocable to returnable contributions for the Plan Year is determined by multiplying the income (or loss) for the Plan Year allocable to employee contributions, matching contributions, and amounts treated as matching contributions (whichever is applicable) by a fraction. The numerator of the fraction is the amount of returnable contributions made on behalf of the Employee for the Plan Year. The denominator of the fraction is the total account balance of the Employee attributable to employee contributions, matching contributions and amounts treated as matching contributions as to the end of the Plan Year, reduced by the gain allocable to such total amount for the Plan Year and increased by the loss allocable to such total amount for the Plan Year. 19.3 Actual Deferral Percentage. For purposes of this Section XIX, "Actual Deferral Percentage" means, with respect to the Highly Compensated Participant group and the Non-Highly Compensated Participant group for a Plan Year, the average of the ratios, calculated separately for each Participant in such group, of the amount of 401(k) contributions allocated to each Participant's 401(k) Account (unreduced by distributions made pursuant to Sections 19.2(b) and 19.2(d) for such Plan Year), to such Participant's Total Compensation for such Plan Year. For the purpose of determining the "Actual Deferral Percentage" of a Highly Compensated Participant, the 401(k) Contributions and compensation of such Highly Compensated Participant shall include the 401(k) Contributions and Total Compensation of Family Members, and such affected Family Members shall be disregarded in determining the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group. XIX-6 82 19.4 Actual Deferral Percentage Test. (a) Maximum Annual Allocation: For each Plan Year, the annual allocation derived from 401(k) contributions to the Highly Compensated Participants' 401(k) Accounts shall satisfy one of the following tests: (1) The "Actual Deferral Percentage" for the Highly Compensated Participant group shall not be more than the "Actual Deferral Percentage" of the Non-Highly Compensated Participant group multiplied by 1.25, or (2) The excess of the "Actual Deferral Percentage" for the Highly Compensated Participant group over the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group shall not be more than two percentage points. Additionally, the "Actual Deferral Percentage" for the Highly Compensated Participant group shall not exceed the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group multiplied by two. However, this alternative limitation test cannot be used to satisfy both the Actual Deferral Percentage test and the Average Contribution Percentage Test of Section 19.6 for the same Plan Year except as may otherwise be provided by the Regulations. (b) For the purposes of Sections 19.4(a) and 19.5, a Highly Compensated Participant and a Non-Highly Compensated Participant shall include any Employee eligible to make a salary deferral election, whether or not such salary deferral election was made. (c) For the purposes of this Section XIX, if two or more plans which include cash or deferred arrangements are considered one plan for the purposes of Code Section XIX-7 83 401(a)(4) or 410(b), the cash or deferred arrangements included in such plans shall be treated as one arrangement. (d) For the purposes of this Section XIX, if a Highly Compensated Participant is a member under two or more cash or deferred arrangements of an Affiliate, all such cash or deferred arrangements shall be treated as one cash or deferred arrangement for the purpose of determining the deferral percentage with respect to such Highly Compensated Participant. 19.5 Adjustments as a Result of Actual Deferral Percentage Test. In the event that the initial allocations of the 401(k) contributions made pursuant to the Plan do not satisfy one of the tests set forth in Section 19.4(a), the Committee shall adjust the 401(k) Contributions of the Highly Compensated Participants pursuant to one of the options set forth below: (a) On or before the 15th day of the third month following the end of each Plan Year, but in no event later than the close of the following Plan Year, each Highly Compensated Participant, beginning with the Participant having the highest "Actual Deferral Percentage," shall have his portion of excess 401(k) contributions (and any income allocable to such portion as provided in (d) of Section 19.2) distributed to him until one of the tests set forth in Section 19.4(a) is satisfied. However, to the extent provided by regulations, each affected Highly Compensated Participant shall first be given the election to treat such excess 401(k) Contribution as an after-tax Participant contribution, subject to the limitations of Section 19.6, and if elected the excess amount (and any Income allocable thereto as provided above) shall be deemed to be a Participant contribution and allocated to the Participant's After-Tax Contribution Account XIX-8 84 as a subaccount, but such subaccount shall be subject to the same restrictions on withdrawals and distributions as are applicable to 401(k) Contributions, but may not be withdrawn due to a financial hardship; or (b) The Employer may make a qualified matching contribution to one or more nondiscriminatory classes of Participants as necessary to satisfy one of the tests set forth in Section 19.4(a). 19.6 Maximum Average Contribution Percentage. (a) The "Average Contribution Percentage" for the Highly Compensated Participant group shall not exceed the greater of: (1) 125% of such percentage for the Non-Highly Compensated Participant group; or (2) the lesser of 200% of such percentage for the Non-Highly Compensated Participant group, or such percentage for the Non-Highly Compensated Participant group plus two percentage points or such lesser amount determined pursuant to Regulations to prevent the multiple use of this alternative limitation with respect to any Highly Compensated Participant. (b) For the purposes of this Section XIX, "Average Contribution Percentage" for a Plan Year means, with respect to the Highly Compensated Participant group and the Non-Highly Compensated Participant group, the average of the ratios (calculated separately for each Participant in each group) of: (1) the sum of the Employer Matching Cash Contributions and Participant After-Tax Contributions contributed under the Plan on behalf of each such Participant for such Plan Year to XIX-9 85 (2) the Participant's Total Compensation for such Plan Year. (c) The "Average Contribution Percentage" for a Highly Compensated Participant shall be determined by including Employer Matching Cash Contributions and Participant After-Tax Contributions and Total Compensation of Family Members and such Family Members shall be disregarded in determining the "Average Contribution Percentage" of Non-Highly Compensated Participants. (d) If two or more plans of the Employer to which matching contributions, Employee contributions, or elective deferrals are made are treated as one plan for purposes of Code Section 410(b), such plans shall be treated as one plan for purposes of this Section 19.6. In addition, if a Highly Compensated Participant participates in two or more plans described in Code Section 401(a) or arrangements described in Code Section 401(k) which are maintained by the Employer to which such contributions are made, all such contributions shall be aggregated for purposes of this Section 19.6. (e) For purposes of Sections 19.6(a) and 19.7, a Highly Compensated Participant and Non-Highly Compensated Participant shall include any Employee eligible to have Employer -Matching Cash Contributions or Participant After-Tax Contributions allocated to his Accounts for the Plan Year. 19.7 Adjustments for Excessive Contribution Percentage. (a) In the event that the "Average Contribution Percentage" for the Highly Compensated Participant group exceeds the "Average Contribution Percentage" for the Non-Highly Compensated Participant group pursuant to Section 19.6(a), the Committee (on or before the 15th day of the third month following the end of the Plan Year, but in no event later than the close of the following Plan Year) shall direct the Trustee to distribute to XIX-10 86 the Highly Compensated Participant group the amount of "Excess Aggregate Contributions" (and any income allocable to such contributions as provided in Section 19.2(d); provided, however, a matching contribution may be distributed only if such contribution is an excess aggregate contribution. It may not be distributed merely because it relates to an excess deferral, an excess contribution or an excess aggregate contribution that is distributed. In such cases, the related matching contribution shall be forfeited notwithstanding anything in the Plan to the contrary. Such distribution shall be made on behalf of the Highly Compensated Participant group in order of their "Average Contribution Percentages," beginning with the highest of such percentages. However, no forfeiture may be allocated to a Highly Compensated Participant whose contributions are reduced pursuant to this Section 19.7. (b) For the purposes of this Section 19.7, "Excess Aggregate Contributions" means, with respect to any Plan Year, the excess of: (1) the aggregate amount of contributions determined pursuant to Sections 19.6(b)(1) and 19.6(c) actually made on behalf of the Highly Compensated Participant group for such Plan Year, over (2) the maximum amount of such contributions permitted under the limitations of Section 19.6(a). (c) The determination of the amount of "Excess Aggregate Contributions" with respect to any Plan Year shall be made after: (1) first determining the excess contributions pursuant to Section 19.2(a), and (2) then determining the excess annual allocations pursuant to Section 19.4(a). XIX-11 87 SECTION XX GENERAL PROVISIONS 20.1 Employer's Rights. The Employers' rights to discipline, transfer, discharge or terminate the employment of Employees or to exercise their rights as to incidents and tenure of employment shall not be impaired or affected in any manner by reason of the existence of the Plan or any action taken under the Plan. 20.2 Notice of Address. Each Participant and each other person receiving or eligible to receive benefits under the Plan shall file with his Employer notice in writing of his post office address and each change of post office address. Any notice, statement or other communication addressed to any person at his last post office address filed with the Employer, or if no post office address was filed with the Employer by such person, then at the last post office address of the Participant by reason of whose employment such benefit is payable as shown by the Employer's records, shall be binding upon such person for all purposes of the Plan. Neither the Committee, the Employers nor the Trustee shall be required or obligated to search for or ascertain the whereabouts of any person eligible to receive benefits under the Plan. 20.3 Copies of Plan Available. Copies of the Plan and any and all amendments thereto shall be made available at all reasonable times to all Employees of an Employer at the office of such Employer designated by the Committee. 20.4 Titles and Heading. The titles to and headings of Sections in the Plan are for convenience and reference only, and, in the event of any conflict, the text of the Plan rather than such titles or headings shall control. XX-1 88 20.5 Counterparts. This Plan and all amendments thereto may be executed in any number of counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument which may be sufficiently evidenced by any one counterpart. 20.6 Applicable Law. This Plan is created under and shall be governed, construed and administered in accordance with the laws of the State of Texas, except to the extent preempted by ERISA. 20.7 Unclaimed Benefits. Any benefit payable to or on behalf of a Participant or Beneficiary which is not claimed after reasonable efforts to locate such person have been made shall be forfeited and used to reduce future Company contributions to be made to the Plan. If the Participant or his Beneficiary subsequently presents a valid claim for benefits to the Committee, the Company shall cause such forfeited benefit to be restored, unadjusted for interim Trust fund gains or losses, from current forfeitures or additional Company contributions to the Plan. IN WITNESS WHEREOF, the Company has caused its duly authorized officer to affix its name hereto on this ___ day of __________, 1995, effective for all purposes as provided herein. ATTEST: TRANSCO ENERGY COMPANY _________________________________ By:_____________________________ SECRETARY Name:___________________________ Title:__________________________ XX-2 89 ATTACHMENT A TRANSCO ENERGY COMPANY THRIFT PLAN I. Investment Funds Option A: Fidelity Retirement Money Market Portfolio Option B: Company Stock Fund Option C: Fidelity Puritan Fund Option D: Fidelity Magellan Fund Option E: Fixed Income Fund Option F: Fidelity Contrafund Option G: Fidelity OTC Portfolio Option H: Fidelity Overseas Fund Option I: Fidelity Asset Manager Option J: Fidelity Asset Manager-Growth Option K: Fidelity Asset Manager-Income II. Fund Transfer Restrictions No direct transfers between Option A and Option E may be made and any transfers from Option E to any of the other Options may not be retransferred from such Option(s) to Option A within six months of the date of such initial transfer from Option E. Subject to the above, transactions into and out of an option shall be effectuated daily, with the exception that transactions into and out of Option B shall be effectuated weekly and transactions out of Option E shall be effectuated semimonthly. III. Default Election If a Participant fails to timely give an investment direction to the Trustee with respect to his Accounts, his Accounts shall be invested in Option A until the Trustee receives a proper investment direction from the Participant. IV. Temporary Freeze on New Investments in Fund B During the period from the close of business on December 16, 1994 until the consummation of the Merger, as defined in the Agreement and Plan of Merger dated as of December 12, 1994 by and among The Williams Companies, Inc. ("Williams"), WC Acquisition Corp. and the Company (the "Merger Agreement"), or the termination 90 of the Merger Agreement without the consummation of the Merger, no transfers from other investment funds into the Company Stock Fund will be permitted and new contributions made directly to the Company Stock Fund will be temporarily invested in Option A, but fully and separately accounted for under the Company Stock Fund pending the consummation of the Merger. Upon the consummation of the Merger, the Company Stock Fund will become a fluid invested in common stock of Williams. -2- -----END PRIVACY-ENHANCED MESSAGE-----