Exhibit 10.13
PERFORMANCE-BASED DEFERRED STOCK AGREEMENT
THIS DEFERRED STOCK AGREEMENT (the "Agreement") is by and between THE
WILLIAMS COMPANIES, INC., a Delaware corporation (the "Company") and the
individual identified on the last page hereof (the "Participant").
1. Grant of Deferred Stock. The Company hereby grants to the Participant
effective February 5, 2004 (the "Effective Date"), subject to the terms and
conditions of The Williams Companies, Inc.'s 2002 Incentive Plan (the
"Plan") and this Agreement, the right to receive a total of XX,XXX shares
of the Common Stock of the Company at the end of the initial deferral
period (as defined herein). These shares are referred to in the Agreement
as "Deferred Stock" during the initial deferral period and during the
extended deferral period (as defined herein). Until the Deferred Stock
vests and is paid, the Participant shall have no rights as a stockholder of
the Company with respect to the Deferred Stock.
2. Incorporation of Plan. The Plan is hereby incorporated herein by reference
and all capitalized terms used herein shall have the meaning set forth in
the Plan. The Participant acknowledges receipt of a copy of the Plan and
hereby accepts the Deferred Stock subject to all the terms and provisions
of the Plan.
3. Compensation Committee Decisions and Interpretations. The Participant
hereby agrees to accept as binding, conclusive and final all decisions and
interpretations of the Compensation Committee of the Board of Directors,
upon any questions arising under the Plan.
4. Vesting and Payment of Deferred Stock.
a. The initial deferral period begins with the Effective Date and ends
with payment of the Deferred Stock as provided in subparagraph 4c(i):
i) Each year during the period 2004 through 2008 ("Vesting Period")
will serve as a vesting opportunity. Until either the entire
Award is vested or the Term of the Award (as defined herein)
expires, one-third of the Deferred Stock shall vest on that date
("Vesting Date") within the Vesting Period in which:
(a) Participant remains an active employee of the Company or any
of its parent, subsidiaries or affiliates through the
Vesting Date; and
(b) The Compensation Committee certifies that the Company met
its annual target under the performance measure that the
Compensation Committee defines and approves for this Award
each performance year; or
(ii) Death of the Participant while employed by the Company or any of
its parent, subsidiaries or affiliates; or
(iii) Disability of the Participant while employed by the Company or
any of its parent, subsidiaries or affiliates; or
(iv) Termination of the Participant's employment with the Company or
any of its parent, subsidiaries or affiliates, voluntarily for
Good Reason or involuntarily (other than due to Cause), within
two years following a Change in Control as set forth in the Plan.
Provided, in the event that no vesting or only partial vesting occurs
during the Vesting Period, any unvested Deferred Stock shall be
forfeited the later of five years following the Effective date of this
Agreement ("Term of the Award") or following the Compensation
Committee's determination of whether the target for the performance
year 2008 has been attained.
b. In the event of Retirement of the Participant from the Company or any
of its parent, subsidiaries or affiliates, the portion of the award
that is eligible for vesting in the year of Retirement will be
prorated and vesting accelerated.
c. Deferred Stock which is vested will be paid based upon the following:
(i) Unless the Participant chooses to extend the date for payment,
the Company will deliver to the Participant, or the Participant's
legal representative as soon as practicable after the Participant
is entitled to the payment of Deferred Stock, a certificate or
certificates equal in number to the number of shares of Deferred
Stock vested less the number of shares required to cover minimum
statutory withholding requirements. Such payment shall occur:
(a) five years from the Effective Date; or
(b) if the entire award is not vested at that time, following
the Compensation Committee certification that the target for
the performance year 2008 has been attained; or
(c) in the event of death of the Participant, payment will be
made to the Participant's legal representative as soon as
practicable after notification to the Company of death.
(ii) Notwithstanding the normal withholding provisions of subparagraph
4c(i), if the Participant becomes subject to taxation upon the
vesting of Deferred Stock due to a change in applicable law (or
regulation) and such change occurs after the date on which the
Participant signs this Agreement, the number of shares of
Deferred Stock necessary to cover minimum statutory withholding
requirements will be used to satisfy such requirements upon such
vesting and the remaining vested Deferred Stock will be delivered
as provided in subparagraph 4c(i).
(iii) The Participant may make a one-time, irrevocable election to
extend the date for payment of the Deferred Stock for up to an
additional five years (the "extended deferral period") provided
this election is made at least 12 months prior to the vesting of
such Deferred Stock above. The Participant acknowledges that the
number of shares further deferred will be less any shares
withheld to cover minimum statutory withholding requirements due
when the Deferred Stock vests.
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(iv) If the payment of any Deferred Stock in any year in conjunction
with other compensation earned by the Participant in such year
causes the total compensation earned by the Participant in such
year to exceed the pay cap in Internal Revenue Code Section
162(m), the Company in its sole discretion may extend the
deferral period for all or any portion of such Deferred Stock
until the next year in which the Participant's total compensation
including Deferred Stock does not exceed the pay cap.
5. Payment of Dividend Equivalents. Subject to Company discretion to reinvest
in the form of additional awards or to take such action as it deems
appropriate, if at anytime a dividend is paid on the Common Stock of the
Company in cash or otherwise, an equivalent amount per share will be paid
to the Participant based on the number of shares of Deferred Stock then
standing in the Participant's name on the books and records of the Company
with respect to the Award made hereunder. Upon conversion of Deferred Stock
into Common Stock hereunder, the right to payment of Dividend Equivalents
under this provision will cease.
6. Other Provisions.
a. The Participant understands and agrees that payments under this
Agreement shall not be used for, or in the determination of, any other
payment or benefit under any continuing agreement, plan, policy,
practice or arrangement providing for the making of any payment or the
provision of any benefits to or for the Participant or the
Participant's beneficiaries or representatives, including, without
limitation, any employment agreement, any change of control severance
protection plan or any employee benefit plan as defined in Section
3(3) of ERISA, including, but not limited to qualified and
non-qualified retirement plans.
b. The Participant agrees and understands stock certificates issued may
be held as collateral for monies he/she owes to Company or any of its
parent, affiliated or subsidiary companies or their vendor(s)
contracted to provide business tools or services for use by
Participant in his or her employment, including but not limited to
personal loan(s), Company credit card debt, relocation repayment
obligations or benefits from any plan that provides for pre-paid
educational assistance.
c. In the event that the Participant's employment with the Company or any
of its parent, subsidiaries or affiliates terminates prior to the
vesting of the Deferred Stock granted under this agreement, such
Deferred Stock shall be forfeited (except as provided in paragraph 4).
d. The Participant acknowledges that this Award and similar awards are
made on a selective basis and are, therefore, to be kept confidential.
e. Neither the Deferred Stock, nor the Participant's interest in the
Deferred Stock, may be sold, assigned, transferred, pledged or
otherwise disposed of or encumbered at any time prior to the vesting
and payment of such Deferred Stock under this Agreement.
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f. If the Participant at any time forfeits any or all of the Deferred
Stock pursuant to this Agreement, the Participant agrees that all of
the Participant's rights to and interest in the Deferred Stock shall
terminate upon forfeiture without payment of consideration.
g. The Compensation Committee shall make determination as to whether an
event has occurred resulting in the forfeiture of the Deferred Stock,
in accordance with this Agreement, and all determinations of the
Compensation Committee shall be final and conclusive.
h. With respect to the right to receive payment of the Deferred Stock
under this Agreement, nothing contained herein shall give the
Participant any rights that are greater than those of a general
creditor of the Company.
7. Notices. All notices to the Company required hereunder shall be in writing
and delivered by hand or by mail, addressed to The Williams Companies,
Inc., One Williams Center, Tulsa, Oklahoma 74172, Attention: Stock
Administration Department. Notices shall become effective upon their
receipt by the Company if delivered in the forgoing manner.
THE WILLIAMS COMPANIES, INC.
By
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Steven J. Malcolm
Chairman, President and
Chief Executive Officer
Participant:
I hereby accept the terms and conditions of the Deferred Stock Agreement:
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Dated this day of , 200 .
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