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Directors' Deferred Compensation Plan - Halliburton Co.

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                              HALLIBURTON COMPANY

                      DIRECTORS' DEFERRED COMPENSATION PLAN

                             AS AMENDED AND RESTATED

                        EFFECTIVE AS OF OCTOBER 22, 2002

<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

                                                                                                                  Page
                                                                                                                  ----
<S>                        <C>                                                                                    <C>
ARTICLE I                  PURPOSE OF PLAN..........................................................................2

ARTICLE II                 DEFINITIONS..............................................................................3

ARTICLE III                ADMINISTRATION OF THE PLAN...............................................................5

ARTICLE IV                 DEFERRED COMPENSATION....................................................................6

ARTICLE V                  DEFERRED COMPENSATION SUBJECT TO INTEREST................................................7

ARTICLE VI                 STOCK EQUIVALENTS........................................................................8

ARTICLE VII                NATURE OF PLAN..........................................................................10

ARTICLE VIII               TERMINATION OF THE PLAN.................................................................11

ARTICLE IX                 AMENDMENT OF THE PLAN...................................................................12

ARTICLE X                  GENERAL PROVISIONS......................................................................13

ARTICLE XI                 EFFECTIVE DATE..........................................................................14
</TABLE>



                                       i

<PAGE>

                               HALLIBURTON COMPANY

                      DIRECTORS' DEFERRED COMPENSATION PLAN

                             AS AMENDED AND RESTATED

                        EFFECTIVE AS OF OCTOBER 22, 2002



         The  Board  of  Directors  of  Halliburton  Company  having  heretofore
established  the  Directors'   Deferred   Compensation  Plan,  pursuant  to  the
provisions of Article VII of said Plan,  hereby amends and supplements said Plan
to be effective in accordance with the provisions of ARTICLE XI hereof.

<PAGE>

                                    ARTICLE I
                                 PURPOSE OF PLAN

         The  purpose of the Plan is to assist the  Directors  of the Company in
planning for their retirement.









                                       2
<PAGE>

                                   ARTICLE II
                                   DEFINITIONS

         Where the following  words and phrases appear  herein,  they shall have
the respective meanings set forth in this ARTICLE II, unless the context clearly
indicates to the contrary.

         Section 2.01. "Administrator" shall mean any administrator appointed by
the  Committee  pursuant  to Section  3.01 herein or, in the absence of any such
appointment, the Committee.

         Section 2.02. "Board of Directors" shall mean the Board of Directors of
the Company.

         Section 2.03. "Committee" shall mean the committee of those individuals
(each of whom shall be a Director)  appointed by the Board of Directors pursuant
to Article III hereof.

         Section 2.04. "Company" shall mean Halliburton Company.

         Section 2.05. "Compensation" shall  mean a  Participant's  compensation
for services as a Director.

         Section  2.06.  "Deferral  Termination  Date"  shall  mean  the  date a
Participant ceases to be a Director of the Company.

         Section 2.07. "Deferred  Compensation" shall mean Compensation deferred
pursuant to the provisions of this Plan.

         Section  2.08.   "Deferred   Compensation   Account"   shall  mean  the
Participant's Deferred Compensation Account established pursuant to Section 4.03
herein.

         Section 2.09.  "Director" shall mean a member of the Board of Directors
of the Company.

         Section 2.10.  "Earned" or any variant  thereof,  when used herein with
respect to Compensation or Deferred Compensation or interest accrued pursuant to
Section  5.02,  shall refer to the end of a Fiscal  Quarter and,  when used with
respect to a dividend or distribution on the Company's  common stock  referenced
in  Section  6.02,  shall  refer  to the date of  payment  of such  dividend  or
distribution by the Company.

         Section 2.11.  "Fiscal  Quarter"  shall mean the quarters of the Fiscal
Year ended July 31, October 31, January 31 and April 30.

         Section 2.12.  "Fiscal Year"  shall mean  the  twelve-consecutive-month
period commencing May 1 of each year.

         Section 2.13.  "Market Price" of the common stock of the Company on any
date shall mean the closing  sales price per share for the common  stock (or, if
no closing  sales price is  reported,  the average of the bid and ask prices per
share on such date) on the New York Stock  Exchange  or, if the common  stock is
not then listed on such  Exchange,  such other  national or regional  securities
exchange upon which the common stock is so listed,  as reported in the composite
transactions  for the principal United States  securities  exchange on which the
common  stock is then  listed or, if the common  stock is not then listed on any
such exchange, as reported in The NASDAQ Stock Market.

                                       3
<PAGE>


         Section 2.14.  "Participant" shall mean any Director of the Company who
has elected to have all or a part of his Compensation  deferred  pursuant to the
Plan.

         Section  2.15.  "Plan" shall mean the  Halliburton  Company  Directors'
Deferred  Compensation Plan, as amended and restated effective as of October 22,
2002, and as the same may thereafter be amended from time to time.

         Section 2.16.  "Plan  Earnings" shall mean amounts of interest to which
reference is made in Section 5.01 herein and of dividends and  distributions  to
which reference is made in Section 6.02 herein.

         Section 2.17. "Stock Equivalent" shall mean a measure of value equal to
one share of the Company's common stock.

         Section 2.18. "Stock Equivalents  Account" shall mean the Participant's
Stock Equivalents Account established pursuant to Section 4.03 herein.

                                       4
<PAGE>

                                   ARTICLE III
                           ADMINISTRATION OF THE PLAN

         Section  3.01.  Committee.  The  Board of  Directors  shall  appoint  a
Committee to administer,  construe and interpret the Plan.  Such  Committee,  or
such  successor  Committee as may be duly  appointed by the Board of  Directors,
shall  serve  at the  pleasure  of the  Board  of  Directors.  Decisions  of the
Committee  with  respect  to any  matter  involving  the Plan shall be final and
binding on the Company and all  Participants.  The  Committee  may  designate an
Administrator  to aid the  Committee  in its  administration  of the Plan.  Such
Administrator  shall maintain  complete and adequate  records  pertaining to the
Plan, including but not limited to Participants'  Deferred Compensation Accounts
and Stock Equivalent Accounts, and shall serve at the pleasure of the Committee.


         Section 3.02.  Indemnity.

                  (a)  Indemnification.  The Company (the "Indemnifying  Party")
         hereby  agrees  to  indemnify  and hold  harmless  the  members  of the
         Committee  and  any  Administrator  designated  by the  Committee  (the
         "Indemnified   Parties")  against  any  losses,   claims,   damages  or
         liabilities to which any of the Indemnified  Parties may become subject
         to the extent  that such  losses,  claims,  damages or  liabilities  or
         actions  in respect  thereof  arise out of or are based upon any act or
         omission   of  such   Indemnified   Party   in   connection   with  the
         administration of this Plan (including any act or omission constituting
         negligence on the part of such Indemnified Party, but excluding any act
         or omission  constituting gross negligence or willful misconduct on the
         part of such  Indemnified  Party),  and will reimburse the  Indemnified
         Party for any legal or other expenses reasonably incurred by him or her
         in connection with  investigating  or defending  against any such loss,
         claim, damage, liability or action.


                  (b) Actions.  Promptly after receipt by the Indemnified  Party
         under  Section  3.02(a)  herein of notice  of the  commencement  of any
         action  or  proceeding  with  respect  to any  loss,  claim,  damage or
         liability  against which the  Indemnified  Party  believes he or she is
         indemnified  under Section 3.02(a),  the Indemnified  Party shall, if a
         claim with respect thereto is to be made against the Indemnifying Party
         under such  Section,  notify the  Indemnifying  Party in writing of the
         commencement thereof; provided, however, that the omission so to notify
         the Indemnifying Party shall not relieve it from any liability which it
         may have to the Indemnified Party to the extent the Indemnifying  Party
         is not  prejudiced by such  omission.  If any such action or proceeding
         shall be brought against the Indemnified  Party and it shall notify the
         Indemnifying Party of the commencement  thereof, the Indemnifying Party
         shall be entitled to  participate  therein,  and, to the extent that it
         shall wish,  to assume the defense  thereof,  with  counsel  reasonably
         satisfactory  to the  Indemnified  Party,  and,  after  notice from the
         Indemnifying  Party to the Indemnified  Party of its election to assume
         the defense thereof, the Indemnifying Party shall not be liable to such
         Indemnified Party under Section 3.02(a) for any legal or other expenses
         subsequently  incurred by the Indemnified  Party in connection with the
         defense  thereof  other  than  reasonable  costs  of  investigation  or
         reasonable  expenses  of actions  taken at the  written  request of the
         Indemnifying  Party. The Indemnifying Party shall not be liable for any
         compromise  or  settlement  of any such action or  proceeding  effected
         without its consent, which consent will not be unreasonably withheld.

                                       5
<PAGE>

                                   ARTICLE IV
                              DEFERRED COMPENSATION

         Section 4.01.  Initial  Elections by Participants.  Any Director of the
Company  may at any time elect to  participate  in the Plan and to have all,  or
such percentage as he may specify, of the Compensation  otherwise payable to him
as a Director  deferred and paid to him after his Deferral  Termination  Date at
the time and in the manner  prescribed  in Section  5.02 or Section  6.05.  Such
election shall be made by notice in writing  delivered to the  Administrator and
shall be applicable  only with respect to  Compensation  earned after the end of
the Fiscal  Quarter in which such  election  is made and prior to the earlier of
the effective date of a further election pursuant to Section 4.02 herein or such
Participant's  Deferral  Termination  Date.  At the time of making such  initial
election  hereunder,  a Director  shall  specify  the  portion,  if any, of such
Deferred  Compensation  which will be (i) held subject to the  interest  payment
provisions  of ARTICLE V hereof or (ii)  translated  into Stock  Equivalents  in
accordance with ARTICLE VI hereof.

         Section 4.02.  Subsequent Elections by Participants.  Subsequent to the
initial  election by a  Participant  provided for in Section 4.01, a Participant
may at any time  make a  subsequent  election  in like  manner  to  increase  or
decrease the percentage of his Compensation to be deferred  pursuant to the Plan
and to elect the portion of such Deferred  Compensation and any Plan Earnings to
be (i) held subject to the interest  payment  provisions  of ARTICLE V hereof or
(ii) translated into Stock Equivalents in accordance with ARTICLE VI hereof. Any
such  election  shall be  effective  as of the first day of the  Fiscal  Quarter
following  the Fiscal  Quarter in which such  election is made.  Notwithstanding
anything to the contrary  herein,  no such  subsequent  election  shall effect a
transfer of any amount credited,  as of the first day of such Fiscal Quarter, to
either the Deferred  Compensation  Account or the Stock Equivalents Account from
such account to the other account.

         Section 4.03. Establishment of Deferred Compensation Accounts and Stock
Equivalents Accounts. There shall be established for each Participant an account
to be designated as such Participant's  Deferred Compensation Account and, where
appropriate, an account to be designated as such Participant's Stock Equivalents
Account.

         Section 4.04.  Allocations to Accounts.  Any Deferred  Compensation and
any Plan  Earnings  earned by a  Participant  during a Fiscal  Quarter  shall be
credited to the Deferred  Compensation  Account of such  Participant on the date
any such amount is earned. As of the end of such Fiscal Quarter,  there shall be
deducted  from  such  Participant's  Deferred  Compensation  Account  an  amount
necessary  to satisfy  such  Participant's  specification,  if any,  pursuant to
Section 4.01 or 4.02 herein,  of the portion of such Deferred  Compensation  and
Plan Earnings to be allocated to such Participant's Stock Equivalents Account in
accordance with Section 6.01 herein.

                                       6
<PAGE>

                                    ARTICLE V
                    DEFERRED COMPENSATION SUBJECT TO INTEREST

         Section   5.01.   Interest  on  Deferred   Compensation   Accounts.   A
Participant's  Deferred  Compensation Account shall be credited as of the end of
each Fiscal Quarter with an amount equivalent to interest for the number of days
in such quarter  (based on a fiscal year of 365 days) at Citibank,  N.A.'s prime
rate for major  corporate  borrowers  in effect on the first day of such  Fiscal
Quarter  applied to the balance of such account at the  beginning of such Fiscal
Quarter.  (No amount credited to a Participant's  Deferred  Compensation Account
subsequent to the beginning of a Fiscal Quarter shall bear interest  during that
Fiscal  Quarter.)  Interest  credited to a Participant's  Deferred  Compensation
Account shall be held in such account  subject to the provisions of Section 4.04
herein.

         Section 5.02. Distribution of Deferred Compensation Accounts Subject to
Interest.  When a  Participant's  Deferral  Termination  Date shall  occur,  the
balance standing in such Participant's  Deferred Compensation Account at the end
of the Fiscal  Quarter  in which  such date  occurs  (after  crediting  interest
thereto in  accordance  with Section 5.01 herein) shall be  distributed  to such
Participant  in one of the  following  alternative  forms,  as determined by the
Committee in its sole discretion:

         (a)      a single lump-sum payment;

         (b)      five equal annual installments; or

         (c)      ten equal annual installments.

         Until payment is made,  interest shall continue to accrue in the manner
provided in Section 5.01.  All Plan  Earnings  accrued to the date of payment of
any  lump-sum  or  annual  installment  shall be paid in  conjunction  with such
payment.  The  lump-sum  payment  or the  initial  annual  installment  shall be
distributed  on the last business day of January next following the close of the
calendar year in which the Participant's  Deferral  Termination Date occurs. The
remaining  installments,  if any,  shall  be  distributed  at  annual  intervals
thereafter.

         If a Participant's  Deferral  Termination Date shall occur by reason of
his death or if he shall die after his Deferral  Termination  Date, but prior to
receipt  of  all   distributions   provided  for  in  this  Section,   all  cash
distributable hereunder shall be distributed in a lump sum to such Participant's
estate or personal representative as soon as administratively feasible following
such Participant's death.

                                       7
<PAGE>

                                   ARTICLE VI
                                STOCK EQUIVALENTS

         Section  6.01.  Stock  Equivalents   Accounts.   The  number  of  Stock
Equivalents,  or  fractions  thereof,  to be credited to a  Participant's  Stock
Equivalents  Account in  accordance  with  Section 4.04 shall be  determined  by
dividing the amount of Deferred  Compensation  and Plan Earnings to be allocated
to such account pursuant to the Participant's specifications given in accordance
with Article IV by the Market Price of the Company's common stock on the trading
day next  preceding  the last  business day of the Fiscal  Quarter  specified in
Section 4.04. The number of Stock Equivalents, so determined,  shall be credited
to the Stock Equivalents Account established for the Participant.

         Section 6.02. Cash and Property  Dividend Credits.  Additional  credits
shall be made to a Participant's  Deferred  Compensation  Account throughout the
period of such Participant's participation in the Plan, and thereafter until all
distributions to which the Participant is entitled under Section 6.05 or ARTICLE
VIII shall have been made, in amounts  equal to the Plan Earnings  consisting of
the cash or fair market  value of any  dividends or  distributions  declared and
made with  respect to the  Company's  common stock  payable in cash,  securities
issued by the Company  (other than the Company's  common stock but including any
such securities  convertible  into the Company's common stock) or other property
which the  Participant  would  have  received  from time to time had he been the
owner on the record  dates for the  payment of such  dividends  of the number of
shares of the Company's common stock equal to the number of Stock Equivalents in
his Stock Equivalents  Account on such dates. Each such credit shall be effected
as of the payment date for such dividend or distribution.  Each and every amount
so credited to a Participant's  Deferred  Compensation  Account shall be held in
such account subject to the provisions of Section 4.04 herein.

         Section 6.03. Stock Dividend Credits.  Additional credits shall be made
to a  Participant's  Stock  Equivalents  Account  throughout  the  period of his
participation in the Plan, and thereafter  until all  distributions to which the
Participant is entitled under Section 6.05 or ARTICLE VIII shall have been made,
of a number  of Stock  Equivalents  equal to the  number  of  shares  (including
fractional  shares) of the Company's common stock to which the Participant would
have  been  entitled  from  time to time as  common  stock  dividends  had  such
Participant  been the owner on the record  dates for the  payments of such stock
dividends  of the number of shares of the  Company's  common  stock equal to the
number of Stock Equivalents  credited to his Stock  Equivalents  Account on such
dates.  Such  additional  credits  shall be effected as of the end of the Fiscal
Quarter in which payment of such stock dividend is made.

         Section  6.04.  Recapitalization.  If,  as  a  result  of  a  split  or
combination of the Company's outstanding common stock or other  recapitalization
or  reorganization,  the number of shares of the  Company's  outstanding  common
stock is increased or decreased or all or a portion of the Company's outstanding
common stock is exchanged for or converted into other  securities  issued by the
Company (including without limitation securities  convertible into the Company's
common stock) or other property,  the number of Stock Equivalents  credited to a
Participant's   Stock  Equivalents  Account  shall,  to  the  extent  reasonably
practicable,  be equitably adjusted to give effect to such  recapitalization  or
reorganization  (taking into account the fair market value of any  securities or
other property for which the Company's  common stock was exchanged or into which
it was  converted)  as if the  Participant  had owned of record on the effective
date of such  recapitalization  or  reorganization  a number  of  shares  of the
Company's common stock equal to the number of Stock Equivalents  credited to his

                                       8
<PAGE>

Stock Equivalents Account immediately prior thereto. To the extent that any such
adjustment  is not  reasonably  practicable,  the Board of Directors  shall give
consideration  to  amending  the Plan  pursuant  to  ARTICLE IX in order to give
effect to the purpose of the Plan and, if no such  amendments can be effected or
are considered desirable, to terminating the Plan pursuant to ARTICLE VIII.

         Section  6.05.   Distributions  from  Stock  Equivalent  Account  After
Participant's   Deferral   Termination  Date.  When  a  Participant's   Deferral
Termination  Date shall occur,  the Company  shall become  obligated to make the
distributions  prescribed  in paragraphs  (a) and (b) below.  At the time of any
distribution,  each Stock  Equivalent to be distributed  shall be converted into
one share of the Company's  common stock and such share shall be  distributed to
the Participant.  Any fraction of a Stock Equivalent to be distributed  shall be
converted  into an amount in cash equal to the Market  Price of one share of the
Company's   common  stock  on  the  trading  day  next  preceding  the  date  of
distribution  multiplied by such fraction and such cash shall be  distributed to
the Participant.

                  (a)  Distribution  shall  be made  in  one  of  the  following
         alternative  forms,  as  determined   by  the  Committee  in  its  sole
         discretion:

                       (i)    a single lump-sum distribution;

                       (ii)   five equal annual installments; or

                       (iii)  ten equal annual installments.

  Until  payment is made,  Plan  Earnings  shall  continue to be credited in the
  manner provided in Section 6.02. All Plan Earnings  accrued to the date of any
  lump-sum  distribution or annual installment shall be paid in conjunction with
  such  payment.  The  lump-sum  or the  initial  annual  installment  shall  be
  distributed  on the last  business day of January next  following the close of
  the calendar year in which the Participant's Deferral Termination Date occurs.
  The remaining  installments,  if any, shall be distributed at annual intervals
  thereafter.

                  (b) If a Participant's  Deferral  Termination Date shall occur
         by  reason  of  his  death  or  if  he  shall  die  after  his Deferral
         Termination Date but prior to receipt of all distributions provided for
         in this Section,  all Stock Equivalents,  or the undistributed  balance
         thereof, shall be distributed to such Participant's  estate or personal
         representative as  soon as  administratively  feasible  following  such
         Participant's death.



                                       9
<PAGE>

                                   ARTICLE VII
                                 NATURE OF PLAN

         The  adoption  of this Plan and any  setting  aside of  amounts  by the
Company with which to discharge its obligations hereunder shall not be deemed to
create a trust. Legal and equitable title to any funds so set aside shall remain
in the Company,  and any recipient of benefits  hereunder shall have no security
or other  interest  in such funds.  Any and all funds so set aside shall  remain
subject to the claims of the  general  creditors  of the  Company,  present  and
future. This provision shall not require the Company to set aside any funds, but
the Company may set aside such funds if it chooses to do so.

                                       10
<PAGE>

                                  ARTICLE VIII
                             TERMINATION OF THE PLAN

         The  Board  of  Directors  may  terminate  the Plan at any  time.  Upon
termination of the Plan,  distributions  in respect of credits to  Participants'
Deferred  Compensation Accounts and Stock Equivalents Accounts as of the date of
termination  shall be made in the manner and at the time  prescribed  in Section
5.02 or 6.05;  provided,  however,  that the Board of  Directors  shall have the
right, by amendment of the Plan made in conjunction  with such  termination,  to
cause distributions in respect of credits to Participants' Deferred Compensation
Accounts  and  Stock  Equivalents  Accounts  as of the  effective  date  of such
termination  of the Plan to be made at such  time and in such  manner  as it may
determine,  including,  but  not  limited  to,  distributions  in  equal  annual
installments  of five or ten years or in a lump sum; and further  provided  that
the  value of the  accounts  on  distribution  shall be  determined  in a manner
consistent with the provisions of Section 5.02 and 6.05, as applicable.

                                       11
<PAGE>

                                   ARTICLE IX
                              AMENDMENT OF THE PLAN

         The Board of  Directors  may,  without the consent of  Participants  or
their beneficiaries, amend the Plan at any time and from time to time; provided,
however, that no amendment may deprive a Participant of the amounts allocated to
his or her  Deferred  Compensation  Account or Stock  Equivalents  Account or be
retroactive in effect to the prejudice of any Participant.

                                       12
<PAGE>

                                    ARTICLE X
                               GENERAL PROVISIONS

         Section 10.01.  No Preference. No Participant shall have any preference
over  the  general  creditors  of  the  Company  in  the event  of the Company's
insolvency.

         Section 10.02.  Authorized Payments.


                  (a) If the Committee receives evidence satisfactory to it that
         any person entitled to receive a periodic payment  hereunder is, at the
         time  the   benefit  is  payable,   physically,   mentally  or  legally
         incompetent  to  receive  such  payment  and to  give a  valid  receipt
         therefor,  and that an individual or institution is then maintaining or
         has custody of such  person and that no  guardian,  committee  or other
         representative  of the estate of such  person has been duly  appointed,
         the Committee may direct that such periodic  payment or portion thereof
         be paid to such individual or institution maintaining or having custody
         of such person, and the receipt of such individual or institution shall
         be valid and a complete discharge for the payment of such benefit.

                  (b) Payments to be made hereunder may, at the written  request
         of the  Participant,  be  made  to a bank  account  designated  by such
         Participant,  provided that deposits to the credit of such  Participant
         in any bank or trust company shall be deemed payment into his hands.

                  (c)  Notwithstanding  any other provisions of the Plan, if any
         amounts payable under the Plan are found in a  "determination"  (within
         the meaning of Section 1313(a) of the Internal Revenue Code of 1986) to
         have been includible in gross income of a Participant  prior to payment
         of  such  amounts  hereunder,  such  amounts  shall  be  paid  to  such
         Participant  as soon as  practicable  after the Committee is advised of
         such determination. For purposes of this paragraph, the Committee shall
         be entitled to rely on an affidavit by a Participant  and a copy of the
         determination  to the  effect  that a  determination  described  in the
         preceding sentence has occurred.

         Section 10.03. Gender Words.  Wherever any words are used herein in the
masculine,  feminine or neuter  gender,  they shall be  construed as though they
were also used in another  gender in all cases  where  they would so apply,  and
whenever any words are used herein in the singular or plural form, they shall be
construed  as though  they were also used in the other  form in all cases  where
they would so apply.

         Section 10.04. Assignment of Benefits. Benefits provided under the Plan
may not be assigned or alienated,  either  voluntarily or  involuntarily,  other
than by will or the applicable laws of descent and distribution.

         Section 10.05.  Conflicts of Laws. THE LAWS OF THE STATE OF TEXAS SHALL
CONTROL THE INTERPRETATION AND PERFORMANCE OF THE TERMS OF THE PLAN. THE PLAN IS
NOT INTENDED TO QUALIFY  UNDER  SECTION  401(a) OF THE INTERNAL  REVENUE CODE OF
1986, AS AMENDED,  OR TO COMPLY WITH THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED.

                                       13
<PAGE>

                                   ARTICLE XI
                                 EFFECTIVE DATE

         This  amendment  and  restatement  of the Plan shall be effective as of
October 22, 2002,  and shall  continue in force during  subsequent  years unless
amended or revoked by action of the Board of Directors.

                                   HALLIBURTON COMPANY



                                   By  /s/ David J. Lesar
                                     ------------------------------------------
                                           David J. Lesar
                                           Chairman of the Board, President and
                                           Chief Executive Officer


                                       14

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