Exhibit 10.3
THE WILLIAMS COMPANIES
SUPPLEMENTAL RETIREMENT PLAN
(Effective as of January 1, 1988)
SECOND AMENDMENT
The Williams Companies Supplemental Retirement Plan, effective as of January 1,
1988 (the "Plan") is hereby amended effective as of the dates set forth below,
in the following respects:
1. A new Section 1.1A of ARTICLE I is hereby added effective January 1,
2002, as follows:
1.1A Base Pay. The regular wages and salary of a Participant, which
does not include any short term disability paid by an Employer,
overriding royalties, amounts paid under a phantom override plan,
bonuses (including, but not limited to bonuses under The Williams
Companies, Inc. Executive Incentive Compensation Plan), salary
reduction amounts contributed to The Williams Companies, Inc.
Investment Plus Plan or a similar plan, salary reduction amounts
contributed to any qualified transportation plan established by an
Employer in accordance with Code Section 132(f) or to any cafeteria
plan or flexible benefits plan established by an Employer in
accordance with Code Section 125 and related sections of the Code,
severance pay, cost of living pay, housing pay, relocation pay
(including mortgage interest differential) or any such other taxable
and non-taxable fringe benefits and extraordinary compensation of any
kind.
2. A new Section 1.3A of ARTICLE I is hereby added effective January 1,
2002, as follows:
1.3A Code. The Internal Revenue Code of 1986, as amended.
3. Section 1.5 of ARTICLE I of the Plan is hereby amended and restated
effective January 1, 2002, in its entirety as follows:
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1.5 Committee. The Compensation Committee of the Board.
4. Section 1.7 of ARTICLE I of the Plan is hereby amended and restated
effective January 1, 2003, in its entirety as follows:
1.7 Eligible Employee. Any Employee of an Employer who (i) is a
participant in the Pension Plan and (ii) holds a position that has
been classified as an executive position by the Company's executive
compensation department. A Participant who is not so classified as
holding an executive position shall cease to be an Eligible Employee
and become a Former Participant as of January 1, 2003. Any exception
to the foregoing eligibility requirements shall only be made upon
approval of the Chief Executive Officer of the Company.
5. Section 1.11 of ARTICLE I of the Plan is hereby amended and restated
effective January 1, 2002, in its entirety as follows:
1.11 Normalized Pension Benefit. The pension benefit which would have
been paid during a Plan Year to the Participant or his Beneficiary
(including a spouse or other contingent annuitant) pursuant to the
benefit formula set forth in Section 2.1 of the Pension Plan which is
applicable to such Participant and the method of payment selected by
the Participant under the Pension Plan, without taking into account
the Code Limitations; but taking into account only the Supplemental
Retirement Compensation of the Participant in lieu of "Compensation"
under Section 2.19 of the Pension Plan; reduced, however in all cases
by the Actuarial Equivalent of any amount, if any, payable to the
Participant or his Beneficiary (including a spouse or other contingent
annuitant) under a Supplemental Retirement Benefits Agreement.
6. Section 1.12 of ARTICLE I of the Plan is hereby amended and restated
effective January 1, 2003, in its entirety as follows:
1.12 Participant. An Eligible Employee who agrees to be bound by the
terms of this Plan by filing such form or forms as the Committee may
require. A person who was a Participant in the Plan prior to January
1, 2003 shall cease to
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be a Participant on January 1, 2003, unless such person continues to
be an Eligible Employee, as such term is defined as of January 1,
2003.
7. A new Section 1.18A of ARTICLE I of the Plan is hereby added effective
January 1, 2002, as follows:
1.18A "Supplemental Retirement Compensation" means, the total wages or
salary paid to a Participant each Plan Year by an Employer or an
affiliate, including Base Pay, short term disability ("STD") paid by
an Employer, overriding royalties, amounts paid under a phantom
override plan, bonuses (unless specifically excluded under a written
bonus arrangement such as The Williams Companies, Inc. Executive
Incentive Compensation Plan), if any, when paid, salary reduction
amounts contributed to The Williams Companies, Inc. Investment Plus
Plan or a similar plan designated by the "Administrative Committee"
under the Pension Plan, salary reduction amounts contributed to any
qualified transportation plan established by the Company in accordance
with Code Section 132(f) or to any cafeteria plan or flexible benefits
plan established by the Company in accordance with Code Section 125
and related sections of the Code, but excluding severance pay, cost of
living pay, housing pay, relocation pay (including mortgage interest
differential) and all such other taxable and non-taxable fringe
benefits and extraordinary compensation, all as determined by the
Committee, in its sole and absolute discretion. For purposes of
determining "Average Monthly Compensation" under the Pension Plan, the
Supplemental Retirement Compensation taken into account with respect
to any Plan Year beginning on or after January 1, 2002, shall not
exceed three (3) times such Participant's Base Pay for such Plan Year.
For purposes of determining an "Accrued Benefit" under the Pension
Plan, if a Participant is credited with less than two thousand eighty
(2,080) "Hours of Service" under the Pension Plan for determining
"Benefit Service" under the Pension Plan during a Plan Year, his
Supplemental Retirement Compensation for that Plan Year shall be the
product of his actual Supplemental Retirement Compensation for such
Plan Year as described above multiplied by a fraction the numerator of
which is two thousand eighty (2,080) and the denominator of which is
the
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number of "Hours of Service" under the Pension Plan with which he is
credited for such Plan Year.
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8. ARTICLE IV of the Plan is hereby amended and restated effective January
1, 2002, in its entirety as follows:
Subject to Section 7.8, a Participant's Supplemental Retirement
Benefit, if any and if vested, shall normally commence to be paid at
the same time and shall normally be paid pursuant to the same method
of payment as is selected by the Participant under the Pension Plan;
however, the Committee, in its sole and absolute discretion, is
authorized to approve or reject a Participant's request for a time of
commencement of payment or a method of payment, or both, hereunder
which is different from the time or method of payment under the
Pension Plan. A Participant's Supplemental Retirement Benefit shall be
reduced by the same survivor pension reduction factors applicable to
such Participant's Pension Plan Benefit.
If a Participant begins to receive benefit payments before age 65
under the Pension Plan, then the Participant's Supplemental Retirement
Benefit shall commence at the same time as payments from the Pension
Plan and shall be reduced by the same actuarial reduction factors
applicable to such Participant's Pension Plan Benefit. A Former
Participant shall not be entitled to a distribution of his
Supplemental Retirement Benefit solely by reason of the fact that such
Former Participant is no longer an Eligible Employee.
9. In all other respects, the Plan remains unchanged.
IN WITNESS WHEREOF, the Company has caused this Second Amendment of the Plan to
be executed this 31st day of December, 2002, to be effective as of the dates set
forth above.
THE WILLIAMS COMPANIES, INC.
By: /s/ Michael P. Johnson
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