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Williams Code of Business Conduct

Message from the CEO

Core Values & Beliefs

Guidance for Resolving and Reporting Concerns

1. Where to Seek Guidance
2. Quick Ethics Check
3. Reporting Suspected Violations
4. Investigations and Corrective Actions

Our Work Environment

1. Equal Opportunity, Affirmative Action and Diversity
2. Harassment/Violence
3. Health, Safety and the Environment
4. Alcohol and Substance Abuse
5. Employee Privacy
6. Q&As

Compliance With All Laws

1. Antitrust
2. Trading on Inside Information
3. Public Disclosures
4. Political Contributions
5. Commercial Bribery
6. Fraudulent Conduct
7. Obstruction of Justice
8. FERC Standards of Conduct
9. Foreign Business Dealings
10. Q&As

Conflict of Interest

1. Corporate Opportunities
2. Outside Employment
3. Financial Interests
4. Gifts and Entertainment
5. Relatives
6. Q&As

Protecting Company Assets

1. Use of Company Assets
2. Recording of Funds, Assets, Etc.
3. Confidential Information
4. Intellectual Property
5. Q&As

Williams Ethics & Compliance Program

1. Program Description
2. Organizational Structure
3. Contact Information

 

Message from the CEO

Williams' success has been and always will be tied to our employees' commitment to the company's Core Values & Beliefs. It is not enough to achieve the right results. They must be achieved the right way.

Of course, business conduct issues are not always black and white. That is where this Code of Business Conduct can help. The Code, which was approved by the Executive Officer Team and Williams' Board of Directors, was designed as a guide for all our employees and directors to help them put the Core Values & Beliefs into practice when performing their duties on behalf of Williams. While no Code can be totally comprehensive, it does provide guidance for some of the more common issues we might face at Williams.

This Code also identifies other resources available to all of us to help resolve ethical issues at work. The company understands there are times when we all need help deciding the right thing to do, and it is important we know where we can turn for assistance in resolving such issues.

Corporate governance is taken very seriously at Williams, and we are all responsible for reading, understanding and adhering to the business conduct standards outlined in this Code. Though not anticipated, any waiver of this Code must be approved by the Williams Board of Directors, and such waiver for directors and executive officers must be promptly disclosed to shareholders.

Thank you for your continued commitment to the company's Core Values & Beliefs and doing business the right way. Williams' future success depends on it.


Sincerely,

Alan Armstrong
Chairman, President and Chief Executive Officer

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Core Values & Beliefs

Integrity
Integrity must not be compromised. Honest relationships and trust are essential for long-term business success. We deal fairly in all our business relations.

Investors
We are committed to providing our investors an attractive return over the long term.

Customers
Customers are the essence of our business. Customers are all parties with whom we deal. We work to satisfy our customers' requirements and anticipate their expectations. To succeed, we must work with our customers to help make them winners, too.

Employees
People are the company's most valuable resource. Employees possess immense powers of innovation, imagination, skill and a desire to accomplish something of significance. Working as a team enables all of us to realize our full potential.

Communities
We recognize and enthusiastically accept our responsibility to the communities we serve, through acting as a good neighbor and through involvement and support for community activities. We are committed to protecting the public, the environment and our natural resources by operating in a safe, reliable manner.

Entrepreneurial Spirit
We maintain a corporate culture that values originality, invention and creativity, and that nurtures these qualities through openness and reverence for the entrepreneurial spirit.

Tolerance for Risk
The company's willingness to take risks in deploying new technology and investing in large capital projects is central to its culture and its success.

Efficiency
Efficiency means the difference between success and failure. We will relentlessly pursue a more efficient way to do everything we undertake.

Autonomy of Operating Units
The autonomy of operating units is important to promote focus, fast decision making and ultimately commitment, which is essential for success. At the same time, cooperation must exist so that operating units work efficiently together and share ideas. Autonomy and entrepreneurial spirit go hand in hand.

Change
We welcome change for the opportunities it offers.

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Guidance for Resolving and Reporting Concerns

Quick Ethics Check

If you are in doubt when faced with an ethical dilemma at work, ask yourself:

  • Is it legal?
  • Does it comply with our Core Values & Beliefs?
  • Would you want your family and friends to know about it?

If you are still not sure what to do, seek guidance from one of the reporting channels listed in the next section.

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Where to Seek Guidance

This Code is a guide for helping Williams employees conduct their business in a manner consistent with Williams' Core Values & Beliefs. Because our business can be very complex at times, the Code is not meant to provide all the answers. It also doesn't form the basis for a contract or claim of any kind. Instead, the Code is intended to be a practical guide to some of the more common situations that many of us may face from time to time.

Just like the Code, none of us is expected to have all the answers. When we have questions or concerns about business conduct, the company expects us to seek the guidance we need from the following reporting channels. Personnel in these reporting channels are sensitive to requests for confidential and anonymous treatment. However, reports involving a threat to life and property, illegal activities or legal action against the company are examples of when action required by the company may not allow for complete confidentiality or anonymity.

Supervisor – It is often most effective to report our concerns to our immediate supervisor. Supervisors are directly responsible for providing their employees with the resources necessary to resolve problems or concerns.

Next Level(s) of Management – In the event an issue is not handled to our satisfaction or we are not comfortable discussing it with our immediate supervisor, we can take the matter to the next level(s) of management. Another effective channel for problem solving is Human Resources, who has a primary role to support the employee. In addition, the Legal Department is there to assist us with legal issues.

Functional Vice President – If these previous steps do not resolve the issue, we can make arrangements to review the situation with our functional vice president.

Business Ethics Resource Center – If the above channels do not provide a satisfactory resolution, we may also contact the Business Ethics Resource Center (see contact information at the end of this Code). All concerns reported to the Business Ethics Resource Center will be evaluated to determine the appropriate course of action to be taken. If we want to report anonymously, we may call the Action Line (1-800-324-3606).

In addition, the Audit Committee of the Williams Board of Directors has established procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters. If we have unresolved concerns regarding questionable accounting or auditing matters, we should promptly contact one of the reporting channels listed above. These reporting channels should immediately communicate those concerns to the Business Ethics Resource Center, which is responsible for reporting such information to the Audit Committee.

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Reporting Suspected Violations

We all have a responsibility for promptly reporting unauthorized or unlawful activity. Williams understands employees may be reluctant to report violations if they believe the reporting employee will be subjected to retaliation. Therefore, it is important for us to understand that Williams will not tolerate retaliation against any employee who reports a suspected violation in good faith.

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Investigations and Corrective Actions

All reports of suspected violations will be evaluated by Williams. An investigation will be conducted if the evaluation points to a potential problem. If the results of an investigation indicate that corrective action needs to be taken, the company will determine the appropriate steps, including employee discipline, dismissal and possible legal proceedings. Such actions will also be brought against individuals who have willfully failed to report known violations.

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Our Work Environment

A good working environment helps support many of our Core Values. It helps protect our most valuable resource, our employees, and allows us all to reach our greatest potential. It is also consistent with our recognized responsibility to serve our communities by helping to protect the public and the environment.

A positive work environment helps promote a willingness among employees to embrace change, take risks, and work together as efficiently as possible. It also creates a culture that nurtures our entrepreneurial spirits, and supports us when it is more effective to be autonomous.

We all are responsible for promoting the most productive and positive working environment possible. By doing so, we support our Core Values and contribute to our company’s future success.

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Equal Opportunity, Affirmative Action and Diversity

Williams has a strong commitment to equal opportunity, affirmative action and diversity in the workforce. We believe in treating people with dignity and providing equal employment and advancement opportunities based on merit, experience and other work-related criteria.

We value the unique contributions that every employee brings to her or his role within the company and consider the variety of perspectives and backgrounds that exist within Williams a competitive advantage for us in the marketplace. Williams is committed to treating all employees fairly, without regard to any characteristics that have no bearing on job performance.

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Harassment/Violence

Respecting the rights of others in the workplace is a primary focus at Williams. There are certain behaviors that are not acceptable under any circumstances – such as harassment and/or violence of any kind. Examples include any unwelcome behavior such as advances, inappropriate jokes, intimidation, offensive language, physical contact or anything that creates a hostile working environment for an ordinary, reasonable employee.

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Health, Safety & the Environment

Williams is committed to the goal of healthy, safe and environmentally sound business practices and operations. We are responsible for using all reasonable efforts to operate in a manner that preserves the environment and protects the health and safety of our employees and others. We are also responsible for complying with all applicable laws and regulations relating to the protection of the environment and the maintenance of a healthy and safe workplace.

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Alcohol and Substance Abuse

Our work benefits from our clear thinking and ability to react quickly. It is important for us to understand that Williams will not tolerate unauthorized use, possession and distribution, or being under the influence of alcohol or illegal drugs in the workplace. A voluntary Employee Assistance Program (EAP) is available through Williams for those seeking to overcome drug or alcohol related problems.

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Employee Privacy

At Williams, we respect the privacy of others. We are responsible for maintaining employee privacy through the careful handling of employee information at all times. We, as employees, have the right to expect that our personnel records will only be accessed by those with a legitimate reason for doing so. In turn, we must understand Williams’ right to access all company property, communications, records and information created in the business setting.

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Q&As

What if my supervisor starts to play favorites with job assignments and overtime, and I begin to feel discriminated against? What should I do?
You should tell your supervisor in clear and specific terms that you feel you have not been treated fairly in terms of job assignments and overtime. If you feel your supervisor has not responded to your concerns in a fair manner, take advantage of the other reporting channels available to you and identified in the Introduction to this Code.

If I had a manager that kept asking me out socially after work, even though I had no interest and had continually refused the invitations, what should I do?
Tell him or her no. You should immediately report the situation, most likely to your manager's boss or Human Resources.

If I receive a call from another company requesting a reference check on a former Williams employee, how should I handle the call?
You should not provide any information, but should politely refer the caller to Human Resources. By establishing Human Resources as a clearinghouse for all reference requests, we can ensure that the information we release is accurate, authorized, and representative of the company's position.

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Compliance With All Laws

Our Core Values talk about integrity and Williams’ commitment to its stakeholders – investors, customers, employees and communities. We believe an honest and trusting relationship with all our stakeholders is essential to our long-term business success. This belief drives our commitment to be a good corporate citizen and to comply with all applicable laws and regulations.

We must understand the laws affecting our business activities and be responsible for compliance. Complying with both the spirit and letter of the law best serves the interest of Williams and its stakeholders.

The following is a brief listing of some of the major laws that can impact our business. Because legal issues can be very complex, if in doubt, we are encouraged to seek guidance from our management and legal counsel.

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Antitrust

Williams believes that fair competition and a free enterprise system serves the best interest of the company and its stakeholders. The antitrust laws were enacted to help preserve the free enterprise system by promoting competition. These laws prohibit business practices that result in unreasonable restraints of trade or discriminatory trade practices. The following are examples of practices that may be illegal:

  • Creation of a monopoly or attempts to create a monopoly;
  • Agreements among competitors to fix prices, divide markets, allocate customers or limit the quality or production of products; and
  • Price discrimination and other predatory trade practices.

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Trading on Insider Information

Williams recognizes the importance of strong and healthy securities markets. To ensure such markets, and to prevent the misappropriation of a company's confidential information, the law forbids us from purchasing or selling securities if we have material information which has not been made public (inside information). Material information covers such topics as company earnings, acquisitions or divestitures, new products or services, changes in strategy, etc.

The law applies equally to Williams securities and the securities of others who are involved with Williams in what would be a significant transaction for those other entities. Thus, whenever the company is negotiating an acquisition of an entity, company employees should not trade in equity securities of Williams or the to-be-acquired entity. This includes "tipping" others about material, non-public information.

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Public Disclosures

Williams is committed to complying with all public disclosure laws and regulations, including but not limited to the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002. We must assure that all disclosures made in all periodic reports and documents filed with the Securities and Exchange Commission, and other public communications by the company are fair, accurate, timely and understandable. This is an obligation of all employees involved in any aspect of the process of preparing and/or certifying to a public disclosure.

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Political Contributions

It is important to recognize that we have corporate interests at stake at the federal and state levels, and there are times when it is in our best interests to make our combined voices heard by our elected representatives. Laws governing political contributions are complex and vary in each state and country. In the United States, no company funds can be contributed to candidates for federal office or committees formed to support such candidates. However, certain states and foreign countries do permit political contributions by corporations. The use of company funds or assets for political purposes must be approved through the Government Affairs Department which, among other things, will obtain Legal Department confirmation that the proposed use is permissible under federal, state, or other applicable law.

In accordance with applicable laws and regulations, Williams has established a Political Action Committee (PAC). Employee participation in the Williams PAC is voluntary, and employees have a right not to participate without fear of retaliation.

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Commercial Bribery

Williams considers one of its most valuable assets to be its reputation of integrity. We seek fair and honest business relationships with all our stakeholders. To that end, Williams does not tolerate the offering or accepting of bribes, kickbacks or other payoffs designed to influence the recipient’s judgment.

The following are examples of conduct that is prohibited by Williams:

  • Payment or receipt of money, gifts, loans or other favors that are designed to, or may tend to, compromise our ability to make objective and fair business decisions;
  • Payment or receipt of kickbacks for obtaining business; and
  • Payment of bribes to government officials to obtain favorable treatment.

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Fraudulent Conduct

Our company is committed to conducting its business dealings in an honest and non-fraudulent manner. We will not intentionally deceive to gain an advantage over or injure another party. All company information provided to any person or entity must be free from deliberate misrepresentation. For example, when dealing with a business associate, we must not make representations we know are false or lack the proper authority.

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Obstruction of Justice

Williams has always recognized the importance and benefits of a properly functioning justice system. We must always conduct ourselves in a way that does not interfere with or obstruct the operation of any legal or governmental system. This includes:

  • Obeying and not hindering the activities supported by legal and governmental mandates; and
  • Not tampering with or illegally influencing any person who is scheduled to appear as a witness in any legal or governmental proceeding; and
  • Retaining documents consistent with the company's retention policies, and not destroying any records with the intent to impede or obstruct any governmental investigation

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FERC Standards of Conduct

Williams is committed to treating every customer fairly and equitably, and as an energy company is committed to compliance with the FERC regulations. The FERC Standards of Conduct expressly prohibits Williams interstate natural gas pipelines (Williams' pipelines) from giving its energy affiliates, through a tariff provision or otherwise, undue preference over its non-affiliate customers to ensure that transportation services are provided on a non-discriminatory basis. This prohibition includes the improper exchange of information between Williams' pipelines and its energy affiliates as to non-public transportation information or non-affiliate shipper information.

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Foreign Business Dealings

Those of us involved in global business must be aware of and comply with international laws, which are frequently complex and unique. One of the most significant laws in this area is the Foreign Corrupt Practices Act. This Act makes it illegal to get or keep business by making improper payments to foreign officials, political parties and governments. The Act also requires significant accounting practices to deter the creation of slush funds to finance illegal payments.

Occasionally, the company has found that certain foreign government officials refuse to perform their ordinary duties without the payment of some small amount, even though they are not significant policy or decision-makers. In some situations, a delay in their performance may materially and adversely affect the regular operations of the company. Under these conditions, and if allowed by law, officers of the company are permitted to authorize "facilitating payments" in small amounts to these officials in order to protect the company’s operations. Because the laws and interpretations of each foreign country are complex, legal counsel must be consulted before any payments are made.

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Q&A

I will be attending a trade association meeting next month and I am curious about our chances for receiving a contract award. I would like to discuss this with other bidders who will be there. Is that all right?
No. You should not discuss bids, terms of contracts, or similar proprietary business information with employees of competing firms. This might give others an unfair advantage, and it might create an antitrust problem. Don't initiate such conversations or respond to any outside inquiries.

My family and friends often ask me about Williams and whether they should buy the company stock. If I tell them what I know about our business prospects and suggest they buy the stock, would that be a problem?
Yes, The rules of "inside" information apply whether you buy or sell stock yourself or if you give the information to someone else. If another person buys or sells stock based on non-public information or "tips" provided by you, both of you could be held liable for violation of federal securities laws. In any case, you should at all times refuse to recommend that anyone buy or sell Williams stock. Besides this concern, employees should never discuss confidential business information with anyone who does not have a need to know it.

Is it permissible for a business representative to entertain a government decisionmaker by taking him or her on an extravagant outing in an effort to speed up a decision on a matter?
Generally the law prohibits any payment, whether direct or, as in this case, indirect, whose purpose is to influence a government employee's behavior. The company, the business representative and the government decisionmaker could all be prosecuted for bribery, if the offer were made and accepted.

Several of my co-workers and I strongly support a certain political candidate. May we work together to support this candidate?
Of course. Williams encourages participation in the political process. However, you may not use company funds, equipment or materials to support the candidate, claim to represent the company's opinions or views of a candidate or issue, and you may not engage in political activities while you are on the job.

We will be attending a foreign trade show and have shipped our product displays from the United States. What if we experience unusual delays in getting our displays released by the customs officials of the foreign country? I'm told it is customary in this country to pay $100 to speed up processing of the customs document. Would this be proper?
In some foreign cultures, it is customary and necessary to make payments called "facilitating payments." These payments are for expediting routine governmental actions such as obtaining a permit or visa. In some cases, these payments may be illegal or improper. Before making such a payment, consult first with the Legal Department.

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Conflict of Interest

Our Core Values represent a strong commitment to our investors, customers, employees and communities. We always want to act in the best interest of these stakeholders. Therefore, we all are expected to avoid or disclose any activity that may interfere, or have the appearance of interfering, with our responsibilities to Williams and its stakeholders. Activities that cannot be avoided must be disclosed to the immediate supervisor. That supervisor is responsible to establish and monitor procedures that ensure Williams is not disadvantaged.

Although no list of potential conflicts of interest can be complete, the following examples highlight activities which could cause conflicts:

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Corporate Opportunities

We owe a duty to the company to advance its legitimate interests when the opportunity to do so arises. We should not compete with Williams or use company property, information or our position to divert business opportunities away from Williams for our own personal gain.

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Outside Employment

The success of Williams depends on our strong commitment to our job responsibilities. While we are permitted to work outside of Williams, we must make sure that such employment does not prevent us from fulfilling our job responsibilities at Williams. We may not be employed by or perform services for a competitor, customer or supplier without prior supervisory approval.

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Financial Interests

We are all encouraged to pursue a secure financial future for ourselves. At the same time, we want to always take care that our financial involvements do not have a negative impact on our ability to make sound and objective business decisions.

In regard to ourselves or a close relative or associate, a direct or indirect financial interest in any enterprise which does business with, or is a competitor of, Williams represents a potential conflict of interest and should be fully reported to our immediate supervisor. In addition, the company prohibits the following:

  • Employee participation in directed share (sometimes known as friends and family) programs offered by other business entities that have or may develop commercial relationships with Williams; and
  • Compensation, either directly or indirectly by an external party, to employees who represent the company on the advisory boards of key vendors or industry groups.

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Gifts and Entertainment

Williams understands that business gifts and entertainment can help build strong relationships with our business partners. However, we must understand that Williams does not tolerate the offering or receiving of gifts and entertainment designed to influence the recipient’s judgment. There is no substitute for good judgment in this situation and if we are concerned about any particular situation, we should err on the side of caution.

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Relatives

Situations may arise where a relative (defined as one who is related to another by blood or marriage) is employed or has a financial stake in an entity that does business with Williams. Frequently, this is not a problem, but the potential for actual or perceived conflicts of interest may exist. Such situations include, but are not limited to, the following:

  • A relative involved in a business seeking to provide goods and services to Williams;
  • Gifts or other benefits offered to a relative by any enterprise that does business with Williams; and
  • A relative working for a competitor.

We all need to be cautious of situations that can result in our inability to make objective business decisions, or lead to the disclosure of competitive or confidential information.

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Q&A

I am thinking about starting my own outside business to bring in some extra income. Would this be a conflict of interest?
An outside business activity does not necessarily put you in a conflict of interest situation. If your outside business activity did not compete with Williams, and your participation in this business was accomplished outside your normal work hours and did not adversely impact your ability to do your job, this would probably not be a conflict of interest. However, you should review the matter with your supervisor before starting the activity.

A Williams officer is thinking about taking a potential customer to an exclusive resort. Would this be acceptable?
If the purpose of this activity is to help build a good working relationship with the potential customer, then it would be acceptable. However, the activity would be against company policy if (1) it was offered in return for securing the potential customer's business or (2) it was an attempt by the officer to compromise the potential customer's ability to make objective and fair business decisions.

What are the guidelines if I have a relative who works for one of Williams' competitors?
There is nothing wrong with relatives (or other personal relations) working for competitors or suppliers. However, you should be doubly aware of any potential conflict of interest (for example, there should be no discussion or exchange of sensitive information). It would be a good idea to alert your supervisor, thereby evidencing your appreciation of the potential sensitivity of the situation.

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Protecting Company Assets

Taking care of our company assets is a critical part of our ability to be successful. We are all responsible for safeguarding the company resources entrusted to us. The wise use of these assets significantly benefits Williams and its stakeholders.

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Use of Company Assets

How we use and care for our company assets can have a direct impact on our financial success. We are responsible for properly handling those assets that are entrusted to us. In general, we may not take, loan, donate, sell, damage or use company assets for non-corporate purposes unless specifically authorized. However, occasional personal use of certain company equipment (ie. personal telephone calls, facsimiles, e-mails, Internet access) is permissible if the frequency and cost of such use is not excessive and does not conflict with company business or policy.

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Recording of Funds, Assets, Etc.

The proper management and recording of company funds, assets, liabilities and business transactions is critical for supporting Williams' day-to-day operations. It allows the company to maximize the benefits of all its available resources. Thus, we must maintain books and records, through adequate internal controls and procedures, which reflect actual transactions and conform to generally accepted accounting principles.

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Confidential Information

Much of the information developed or held by Williams is confidential and must be protected from unauthorized disclosure. This information plays a key role in our business strategies. We are responsible for safeguarding such information in order to maintain our competitive advantage in the marketplace.

A few examples of confidential information are financial data, employee records, marketing research, pricing and sales programs. Materials that contain confidential data, such as notebooks, e-mail, memos, etc., should always be securely stored and shared only on a need-to know basis.

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Intellectual Property

Our ideas, concepts and other information we produce are important assets to Williams. This "intellectual property" is central in developing new products and attracting new business opportunities. Examples of intellectual property include patents, trademarks, copyrights and trade secrets.

We are responsible for identifying and protecting Williams’ intellectual property at all times. In addition to protecting the intellectual property of Williams, we will also afford this same respect toward the intellectual property of others.

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Q&A

My group is receiving new personal computers and printers. The local elementary school in my neighborhood could really use the old equipment. May I donate it to the school on Williams' behalf?
Though company equipment may be obsolete, there are other factors that must be considered before the company chooses to discard or donate it, such as accounting practices and corporate contribution policies. Therefore, check with Williams management before making a donation of company property.

If a supplier inadvertently leaves a document in my office that is related to a competitor's product, can I keep or make a copy of the document and share it with others to benefit Williams?
No. The document may be confidential and cannot be disclosed without proper authorization. Reviewing it would violate our policy and may lead to a lawsuit. Once such a document is discovered, it should be brought to the attention of your supervisor and the Legal Department.

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Williams Ethics & Compliance Program

Program Description
This Code is just one component of the company's overall Ethics & Compliance Program, which was established to (a) effectively communicate the company's business conduct expectations to all employees and (b) provide the necessary means to help prevent, detect and report violations of law and company policy. Other major components of this program include our Core Values & Beliefs, company policies/procedures/practices, and annual compliance training.

In addition, high-level personnel have been assigned responsibility for ensuring the effectiveness of the Ethics & Compliance Program. For example, Group Compliance Officers (consisting of the top officer of each operating group, plus the Chief Ethics and Compliance Officer for the corporate group) are responsible for adopting, implementing and maintaining the Ethics & Compliance Program within their respective groups. An Ethics Advisory Panel (made up of high-level representatives from each of the major groups within Williams) meets regularly to oversee the effectiveness of the Ethics & Compliance Program. Also, the Ethics & Compliance Program is overseen by the Audit Committee and the Nominating and Governance Committee of the Williams Board of Directors.

The chart below shows the organizational structure of the Ethics & Compliance Program.

Ethics & Compliance Program Organizational Structure

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Contact Information

If you need to contact anyone within the Ethics & Compliance Program organization, or have any questions regarding the company's Ethics & Compliance Program, please contact the Business Ethics Resource Center as follows:

Call:
(918) 573-7459
(800) 324-3606 (Action Line, if you want to call anonymously)

Stop by: 38-4 Floor of The Williams Tower

Fax: (918) 573-6831

E-mail: actionline@williams.com

Regular Mail:
Williams
One Williams Center
Tulsa, OK 74172
Attn: Business Ethics Resource Center, MD 38-4

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