<PAGE> 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
<TABLE>
<CAPTION>
=============================================================================================================
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
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
($1 par value) 1,000,000(3) $30 3/4 $30,750,000 $10,604
=============================================================================================================
</TABLE>
(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.
===============================================================================
<PAGE> 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
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 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-
<PAGE> 8
ITEM 8. EXHIBITS.
<TABLE>
<S> <C> <C>
*(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).
</TABLE>
_______________________________
* 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-
<PAGE> 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
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<PAGE> 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.
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<PAGE> 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:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
* 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
</TABLE>
-10-
<PAGE> 12
<TABLE>
<S> <C>
* 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)
</TABLE>
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<PAGE> 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-
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<S> <C> <C>
*(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).
</TABLE>
_______________________________
* The exhibits have heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and are incorporated herein by
reference.
<PAGE> 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.
<PAGE> 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:
<TABLE>
<CAPTION>
If Redeemed during
the 12-Month Period Percentage of
beginning April 15 Principal Amount
------------------- ----------------
<S> <C>
2000 . . . . . . . . . . . . . . . . . . . . . . 103.0
2001 . . . . . . . . . . . . . . . . . . . . . . 102.4
2002 . . . . . . . . . . . . . . . . . . . . . . 101.8
2003 . . . . . . . . . . . . . . . . . . . . . . 101.2
2004 . . . . . . . . . . . . . . . . . . . . . . 100.6
2005 . . . . . . . . . . . . . . . . . . . . . . 100.0
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 8
<TABLE>
<S> <C>
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
</TABLE>
<PAGE> 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
<PAGE> 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
<PAGE> 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__________________________
<PAGE> 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
__________________________
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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)
<PAGE> 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
<PAGE> 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)
<PAGE> 1
EXHIBIT 99
TRANSCO ENERGY COMPANY
THRIFT PLAN
(34TH AMENDMENT)
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C> <C>
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
</TABLE>
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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
</TABLE>
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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
</TABLE>
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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
</TABLE>
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<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
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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
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<PAGE> 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
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<PAGE> 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.
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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.
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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
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<PAGE> 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.
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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
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<PAGE> 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.
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<PAGE> 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
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<PAGE> 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.
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<PAGE> 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
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<PAGE> 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,
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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).
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<PAGE> 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,
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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.
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<PAGE> 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
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<PAGE> 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
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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
<PAGE> 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
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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
<PAGE> 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
<PAGE> 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
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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
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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
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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
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similar to the requirements of the regulations prescribed under Code Section
170(a)(1).
VIII-11
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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.
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<PAGE> 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.
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<PAGE> 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.
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<PAGE> 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
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<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
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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
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(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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
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(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.
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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.
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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
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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
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distribution (and, if applicable, a particular
distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
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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.
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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
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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.
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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.
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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
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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.
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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
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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
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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
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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.
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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
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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
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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.
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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
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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.
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(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
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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
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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.
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<PAGE> 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.
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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
<PAGE> 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
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<PAGE> 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
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<PAGE> 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
<PAGE> 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).
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<PAGE> 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.
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<PAGE> 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:__________________________
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<PAGE> 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
<PAGE> 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.
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