2002 Employee Stock Purchase Plan - Halliburton Co.
HALLIBURTON COMPANY
2002 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The HALLIBURTON COMPANY 2002 EMPLOYEE STOCK PURCHASE PLAN
(the "Plan") is intended to provide an incentive for eligible employees of
HALLIBURTON COMPANY (the "Company") and certain of its subsidiaries to acquire
or increase a proprietary interest in the Company through the purchase of shares
of the Company's common stock. The Plan is intended to qualify as an "employee
stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). The provisions of the Plan shall be construed in a manner
consistent with the requirements of that section of the Code.
2. Definitions. Where the following words and phrases are used in
the Plan, they shall have the respective meanings set forth below, unless the
context clearly indicates to the contrary:
"Board" means the Board of Directors of the Company.
"Committee" means the Board or a committee of members of the Board
appointed by the Board to administer this Plan.
"Company" means Halliburton Company and, where required by the
context, shall include any Participating Company.
"Corporate Change" means one of the following events: (i) the
merger, consolidation, or other reorganization of the Company in which
the outstanding Stock is converted into or exchanged for a different
class of securities of the Company, a class of securities of any other
issuer (except a direct or indirect wholly owned subsidiary of the
Company), cash or other property; (ii) the sale, lease or exchange of
all or substantially all of the assets of the Company to any other
corporation or entity (except a direct or indirect wholly owned
subsidiary of the Company); or (iii) the adoption by the stockholders
of the Company of a plan of liquidation or dissolution.
"Eligible Compensation" means an employee's regular straight-time
earnings or base salary, determined before giving effect to any
elective salary reduction or deferral agreements and including vacation
and sick time, but excluding overtime, incentive compensation, bonuses,
special payments, commissions, severance pay, short-term disability
pay, long-term disability pay, geographical coefficients, shift
differential and any other items of compensation.
"Eligible Employee" means, as of each Enrollment Date, each
employee of the Company or a Participating Company who, as of such
Enrollment Date, has completed a six-month period of service with the
Company and/or its Subsidiaries (service with a n acquired entity or
operation shall be credited for this purpose), but excluding (i)
employees who are employed in a foreign country whose laws or
regulations effectively prohibit participation in the Plan and (ii)
employees who are customarily employed by the Company less than twenty
(20) hours per week or less than five (5) months in any calendar year.
Additionally, the Committee may also determine that a designated group
of highly compensated employees are ineligible to participate in the
Plan so long as the group fits within the definition of "highly
compensated employee" in Code Section 414(q).
"Enrollment Date" means the first day of each Purchase Period.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the closing price for a share of
Stock on the New York Stock Exchange (or if the Stock is not then
listed on such exchange, such other national securities exchange on
which the Stock is then listed) for the last Trading Day on the date of
such determination, as reported on the New York Stock Exchange (or such
other national securities exchange) Composite Tape or such other source
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as the Committee deems reliable, or if no prices are reported on that
date, on the last preceding date on which such prices are so reported.
"Participating Company" means any present or future parent
corporation or Subsidiary of the Company that participates in the Plan
pursuant to paragraph 4.
"Purchase Date" means the last Trading Day of each Purchase
Period.
"Purchase Period" means a period of approximately six months
beginning on (i) the first Trading Day on or after each July 1 and
ending on the last Trading Day in the period ending the following
December 31, or (ii) the first Trading Day on or after each January 1
and ending on the last Trading Day in the period ending the following
June 30. The first Purchase Period shall begin on the first Trading Day
on or after July 1, 2002. The Committee shall have the power to change
the duration of Purchase Periods (including the commencement dates
thereof) with respect to future offerings without stockholder approval
if such change is announced at least five days prior to the scheduled
beginning of the first Purchase Period to be affected thereafter.
"Purchase Price" means an amount equal to 85% of the Fair Market
Value of a share of Stock on the Enrollment Date or on the Purchase
Date, whichever is lower, subject to adjustment pursuant to paragraph
13.
"Stock" means the Company's common stock, par value $2.50 per
share.
"Subsidiary" means a corporation, domestic or foreign, which is a
"subsidiary" of the Company, as defined in section 424(f) of the
Code, whether or not such corporation exists or is hereafter organized
or acquired by the Company or a subsidiary.
"Trading Day" means a day on which the principal national stock
exchange on which the Stock is traded is open for trading.
3. Administration of the Plan. The Plan shall be administered by the
Committee. Subject to the provisions of the Plan, the Committee shall interpret
the Plan, make such rules as it deems necessary for the proper administration of
the Plan, and make all other determinations necessary or advisable for the
administration of the Plan and the purchase of Stock under the Plan, including
without limitation establishing the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars. In addition, the Committee shall
correct any defect or supply any omission or reconcile any inconsistency in the
Plan, or in any stock purchase right granted under the Plan, correct any
mistakes in the administration of the Plan in the manner and to the extent that
the Committee deems necessary or desirable to effectuate the intent of the Plan.
The Committee shall, in its sole discretion, make such decisions or
determinations and take such actions, and all such decisions, determinations and
actions taken or made by the Committee pursuant to this and the other paragraphs
of the Plan shall be conclusive on all parties. The Committee shall not be
liable for any decision, determination or action taken in good faith in
connection with the administration of the Plan. The Committee shall have the
authority to delegate routine day-to-day administration of the Plan to such
officers and employees of the Company as the Committee deems appropriate.
4. Participating Companies. The Committee may designate any present
or future parent corporation of the Company or Subsidiary that is eligible by
law to participate in the Plan as a Participating Company by written instrument
delivered to the designated Participating Company. Such written instrument shall
specify the effective date of such designation and shall become, as to such
designated Participating Company and employees in its employment, a part of the
Plan. The terms of the Plan may be modified as applied to the Participating
Company only to the extent permitted under Section 423 of the Code. Transfer of
employment among the Company and Participating Companies shall not be considered
a termination of employment hereunder. Any Participating Company may, by
appropriate action of its Board of Directors, terminate its participation in the
Plan. Moreover, the Committee may, in its discretion, terminate a Participating
Company's Plan participation in the Plan at any time. The Participating
Companies at any time shall be listed on Attachment A hereto as it may be
amended from time to time by the Committee.
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5. Eligibility. Subject to the further provisions hereof, all
Eligible Employees as of an Enrollment Date shall be eligible to participate in
the Plan with respect to the Purchase Period beginning as of such date.
6. Stock Subject to the Plan. Subject to the provisions of paragraph
13, the aggregate number of shares of Stock which may be sold under the Plan
shall not exceed 12,000,000 shares, which shares may be authorized but unissued
shares or treasury shares, including shares bought on the open market or
otherwise for purposes of the Plan.
7. Stock Purchase Rights.
(a) Grant of Stock Purchase Rights. On each Enrollment Date the
Company shall grant a stock purchase right to each Eligible Employee
who elects to participate in the Plan for the Purchase Period beginning
on such date. Subject to subparagraphs 7(f) and (g), the number of
shares of Stock subject to a stock purchase right for a participant
shall be equal to the quotient of (i) the aggregate payroll deductions
withheld on behalf of such participant during the Purchase Period,
plus any amounts carried over from the prior Purchase Period, divided
by (ii) the Purchase Price of the Stock applicable to the Purchase
Period; provided, however, that the maximum number of shares of Stock
that may be subject to any stock purchase right for a participant
during any Purchase Period may not exceed 10,000 shares (subject to
adjustment as provided in paragraph 13). No fractional shares shall
be purchased; any payroll deductions accumulated in a participant's
account and not applied to the purchase of whole shares shall be
retained in the participant's account and applied in the next Purchase
Period, subject to withdrawal by the participant pursuant to paragraph
9.
(b) Election to Participate; Payroll Deduction Authorization.
An Eligible Employee may participate in the Plan only by means of
payroll deduction. Except as provided in subparagraph 7(f), each
Eligible Employee who elects to participate in the Plan shall deliver
to the Company, within the time period prescribed by the Committee,
a payroll deduction authorization in the form prescribed by the
Company, whereby he gives notice of his election to participate in the
Plan as of the next following Enrollment Date, and whereby he
designates an integral percentage (except as provided below) to be
deducted from his Eligible Compensation for each pay period ending in
the Purchase Period and paid into the Plan for his account. The
designated percentage may not be less than 1% nor exceed 10%; provided,
however, the minimum contribution per pay period shall be $10.
(c) Changes in Payroll Authorization. All payroll deductions
made for a participant shall be credited to his account under the Plan.
A participant may discontinue his participation in the Plan as
provided in paragraph 9 hereof, or may increase or decrease the rate
of his payroll deductions during the Purchase Period by completing or
filing with the Company a new payroll deduction authorization form
authorizing a change in his payroll rate. The Committee may, in its
discretion, limit the number of payroll rate changes during any
Purchase Period. The change in rate shall be effective with the first
full payroll period following five business days after the Company's
receipt of the new payroll deduction authorization form unless the
Company elects to process a given change in payroll rate earlier.
A participant's payroll deduction authorization form shall remain
in effect for successive Purchase Periods unless terminated as provided
in paragraph 9 hereof.
(d) Automatic Payroll Reduction. Notwithstanding the foregoing,
to the extent necessary to comply with subparagraphs 7(f) and (g)
hereof, a participant's payroll deductions may be decreased to 0% at
any time during a Purchase Period. Payroll deductions shall recommence
at the rate provided in such participant's payroll deduction
authorization form at the beginning of the first Purchase Period that
is scheduled to end in the following calendar year, unless terminated
by the participant as provided in paragraph 9 hereof.
(e) Tax Withholding. At the time the stock purchase right is
exercised, in whole or in part, or at the time some or all of the
Stock issued under the Plan is disposed of, the participant must
make adequate provision for the Company's federal, state or other tax
withholding obligations, if any, that arise upon the exercise of the
stock purchase right or the disposition of the Stock. At any time, the
Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
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applicable withholding obligations, including without limitation any
withholding required to make available to the Company any tax
deductions or benefits attributable to the sale or early disposition
of Stock purchased by the participant.
(f) $25,000 Limitation. Notwithstanding anything in the Plan to
the contrary, no employee shall be granted a stock purchase right under
the Plan which permits his rights to purchase Stock under the Plan and
under all other employee stock purchase plans of the Company and its
parent corporation and Subsidiaries to accrue at a rate which exceeds
$25,000 of Fair Market Value of Stock (determined at the time such
stock purchase right is granted) for each calendar year in which
such stock purchase right is outstanding at any time (within the
meaning of Section 423(b)(8) of the Code). Any payroll deductions in
excess of the amount specified in the foregoing sentence shall be
returned to the participant as soon as administratively feasible after
the next following Enrollment Date.
(g) Special Restriction on Participation. Any provisions of the
Plan to the contrary notwithstanding, no Eligible Employee shall be
granted a stock purchase right under the Plan to the extent that,
immediately after the grant, such Eligible Employee (or any other
person whose stock would be attributed to such Eligible Employee
pursuant to Section 424(d) of the Code) would own capital stock of the
Company and/or hold outstanding options to purchase such stock
possessing 5% or more of the total combined voting power or value of
all classes of the capital stock of the Company, its parent corporation
or any Subsidiary.
8. Exercise of Stock Purchase Rights.
(a) General Statement. Subject to the limitations set forth in
paragraph 7, unless a participant withdraws from the Plan as provided
in paragraph 9, each participant in the Plan automatically and without
any act on his part shall be deemed to have exercised his stock
purchase right on each Purchase Date to the extent of his unused
payroll deductions under the Plan and to the extent the issuance of
Stock to such participant upon such exercise is lawful.
(b) Delivery of Shares to Custodian. As soon as practicable
after each Purchase Date, the Company shall deliver to a custodian
selected by the Committee one or more certificates representing (or
shall otherwise cause to be credited to the account of such custodian)
the aggregate number of whole shares of Stock with respect to which
stock purchase rights were exercised on such Purchase Date of all of
the participating employees hereunder. Such custodian shall keep
accurate records of the beneficial interests of each participant in
such shares by means of participant accounts under the Plan, and shall
provide each participant with periodic statements with respect
thereto as may be directed by the Committee. The Committee may require
that shares be retained with such custodian, or other designated
broker or agent for a designated period of time and/or may establish
other procedures to permit tracking of disqualifying dispositions of
such shares. If the Company is required to obtain from any U.S.
commission or agency authority to issue any such shares, the Company
shall seek to obtain such authority. Inability of the Company to
obtain from any commission or agency (whether U.S. or foreign)
authority which counsel for the Company deems necessary for the lawful
issuance of any such shares shall relieve the Company from liability to
any participant in the Plan except to return to him the amount of his
payroll deductions under the Plan which would have otherwise been used
upon exercise of the relevant stock purchase right.
(c) Withdrawal of Shares. A participant may, at any time, in such
form and manner as established by the custodian, direct the custodian
to deliver to the participant all or part of the shares held by the
custodian in his account or to sell such shares and deliver to the
participant the proceeds therefrom, less applicable expenses.
(d) Dividends. With respect to an individual's Stock held by the
custodian pursuant to subparagraph 8(b), the custodian shall
automatically reinvest in additional shares of Stock for such
individual's account any cash dividends received by the custodian and
attributable to such Stock and shall, in accordance with procedures
adopted by the custodian, facilitate the individual's voting rights
attributable to shares held in a participant's account.
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9. Withdrawal from the Plan.
(a) General Statement. Any participant may withdraw in whole
from the Plan at any time that is five or more days prior to the
Purchase Date relating to a particular Purchase Period. Partial
withdrawals shall not be permitted. A participant who wishes to
withdraw from the Plan must timely deliver to the Company a notice of
withdrawal in a form prepared by the Company. The Company, promptly
as practical following the receipt of the notice of withdrawal, shall
refund to the participant the amount of his payroll deductions under
the Plan which have not yet been used to purchase shares upon the
exercise of his stock purchase rights; and thereupon, automatically
and without any further act on his part, his payroll deduction
authorization and his interest in unexercised stock purchase rights
under the Plan shall terminate in full.
(b) Leave of Absence. A participant who goes on a leave of
absence shall be deemed to have elected to withdraw from the Plan.
(c) Eligibility Following Withdrawal. A participant who withdraws
from the Plan shall be eligible to participate again in the Plan upon
expiration of the Purchase Period during which he withdrew (provided
that he is otherwise an Eligible Employee at such later time).
10. Termination of Eligible Employment. If the employment of a
participant with the Company terminates for any reason whatsoever or the
participant ceases to be an Eligible Employee, then his participation in the
Plan automatically and without any act on his part shall terminate as of the
date of such termination of employment or change in status. The Company shall
promptly refund to him (or his estate or personal representative, as the case
may be) the amount of his payroll deductions under the Plan which have not yet
been used to purchase Stock, and thereupon his interest in unexercised stock
purchase rights under the Plan shall terminate in full.
11. Restriction Upon Assignment of Stock Purchase Rights. A stock
purchase right granted under the Plan shall not be transferable otherwise than
by will or the laws of descent and distribution. Each stock purchase right shall
be exercisable, during a participant's lifetime, only by the participant to whom
granted. The Company shall not recognize and shall be under no duty to recognize
any assignment or purported assignment by an employee of any of his stock
purchase rights under the Plan.
12. No Shareholder Rights or Privileges Until Exercise of Stock
Purchase Rights. With respect to shares of Stock subject to a stock purchase
right, a participant shall not be deemed to be a shareholder, and he shall not
have any of the rights or privileges of a shareholder, until such stock purchase
right has been exercised and shares delivered pursuant to subparagraph 8(b).
13. Changes in Stock; Adjustments. Whenever any change is made in the
Stock, by reason of a stock dividend or by reason of subdivision, stock split,
reverse stock split, recapitalization, reorganization, combination,
reclassification of shares or other similar change, appropriate action will be
taken by the Committee to adjust any or all of (i) the number and type of shares
subject to the Plan, (ii) the number and type of shares subject to outstanding
stock purchase rights and (iii) the Purchase Price with respect to any of the
foregoing.
In the event of a Corporate Change, unless a successor corporation
assumes or substitutes new stock purchase rights (within the meaning of Section
424(a) of the Code) for all stock purchase rights then outstanding, (i) the
Purchase Date for all stock purchase rights then outstanding shall be
accelerated to a date fixed by the Committee prior to the effective date of the
Corporate Change and (ii) upon such effective date any unexercised stock
purchase rights shall expire and the Company promptly shall refund to each
participant the amount of such participant's payroll deductions under the Plan
which have not yet been used to purchase Stock.
14. Use of Funds; No Interest Paid. All funds received or held by the
Company under the Plan shall be included in the general funds of the Company
free of any trust or other restriction, and may be used for any corporate
purpose. No interest shall be paid to any participant on amounts credited to his
account.
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15. Term of the Plan. The Plan shall be effective July 1, 2002,
provided the Plan is approved by the shareholders of the Company prior to such
date. If not sooner terminated under the provisions of paragraph 16, the Plan
shall automatically terminate upon and no further payroll deductions shall be
made and no further stock purchase rights shall be granted after the date all of
the shares of Stock reserved for issuance under the Plan, as increased and/or
adjusted from time to time, have been sold under the Plan. If on the final
Purchase Date there is an insufficient number of shares of Stock available for
all purchases under stock purchase rights exercised on such date, the number of
available shares shall be prorated among the then purchasing participants in an
equitable manner as determined by the Committee based on their deductions for
such Purchase Period and all remaining amounts shall be returned to the
participants.
16. Amendment or Termination of the Plan. The Board in its discretion
may terminate the Plan at any time with respect to any Stock for which stock
purchase rights have not theretofore been granted. The Board shall have the
right to alter or amend the Plan or any part thereof from time to time;
provided, however, that, except as provided below, no change in any stock
purchase right theretofore granted may be made that would materially impair the
stock purchase rights of the participant without the consent of such
participant. In the event the Board determines that the ongoing operation of the
Plan may result in unfavorable financial accounting consequences, the Board may,
in its discretion and, to the extent necessary or desirable, modify or amend the
Plan to reduce or eliminate such accounting consequence including, but not
limited to (i) altering the Purchase Price for any Purchase Period including a
Purchase Period underway at the time of the change in Purchase Price; and (ii)
shortening any Purchase Period so that Purchase Period ends on a new Purchase
Date, including a Purchase Period underway at the time of the Board action.
17. Securities Laws. The Company shall not be obligated to issue any
Stock pursuant to any stock purchase right granted under the Plan at any time
when the offer, issuance or sale of shares covered by such stock purchase right
has not been registered under the Securities Act of 1933, as amended, or does
not comply with such other state, federal or foreign laws, rules or regulations,
or the requirements of any stock exchange upon which the Stock may then be
listed, as the Company or the Committee deems applicable and, in the opinion of
legal counsel for the Company, there is no exemption from the requirements of
such laws, rules, regulations or requirements available for the offer, issuance
and sale of such shares. Further, all Stock acquired pursuant to the Plan shall
be subject to the Company's policies concerning compliance with securities laws
and regulations, as such policies may be amended from time to time. The terms
and conditions of stock purchase rights granted hereunder to, and the purchase
of shares by, persons subject to Section 16 of the Exchange Act shall comply
with any applicable provisions of Rule 16b-3. As to such persons, the Plan shall
be deemed to contain, and such stock purchase rights shall contain, and the
shares issued upon exercise thereof shall be subject to, such additional
conditions and restrictions as may be required from time to time by Rule 16b-3
to qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
18. No Restriction on Corporate Action. Nothing contained in the Plan
shall be construed to prevent the Company or any Subsidiary from taking any
corporate action that is deemed by the Company or such Subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any stock purchase right granted under the Plan.
No employee, beneficiary or other person shall have any claim against the
Company or any Subsidiary as a result of any such action.
19. Miscellaneous Provisions.
(a) Number and Gender. Wherever appropriate herein, words used in
the singular shall be considered to include the plural and words used
in the plural shall be considered to include the singular. The
masculine gender, where appearing in the Plan, shall be deemed to
include the feminine gender.
(b) Headings. The headings and subheadings in the Plan are
included solely for convenience, and if there is any conflict between
such headings or subheadings and the text of the Plan, the text shall
control.
(c) Not a Contract of Employment. The adoption and maintenance
of the Plan shall not be deemed to be a contract between the Company or
any Participating Company and any person or to be consideration for the
employment of any person. Participation in the Plan at any given time
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shall not be deemed to create the right to participate in the Plan, or
any other arrangement permitting an employee of the Company or any
Participating Company to purchase Stock at a discount, in the future.
The stock purchase rights and obligations under any participant's
terms of employment with the Company or any Participating Company
shall not be affected by participation in the Plan. Nothing herein
contained shall be deemed to give any person the right to be retained
in the employ of the Company or any Participating Company or to
restrict the right of the Company or any Participating Company to
discharge any person at any time, nor shall the Plan be deemed to give
the Company or any Participating Company the right to require any
person to remain in the employ of the Company or such Participating
Company or to restrict any person's right to terminate his employment
at any time. The Plan shall not afford any participant any additional
right to compensation as a result of the termination of such
participant's employment for any reason whatsoever.
(d) Compliance with Applicable Laws. The Company's obligation to
offer, issue, sell or deliver Stock under the Plan is at all times
subject to all approvals of and compliance with any governmental
authorities (whether domestic or foreign) required in connection with
the authorization, offer, issuance, sale or delivery of Stock as well
as all federal, state, local and foreign laws. Without limiting the
scope of the preceding sentence, and notwithstanding any other
provision in the Plan, the Company shall not be obligated to grant
stock purchase rights or to offer, issue, sell or deliver Stock under
the Plan to any employee who is a citizen or resident of a jurisdiction
the laws of which, for reasons of its public policy or otherwise,
prohibit the Company from taking any such action with respect to such
employee.
(e) Severability. If any provision of the Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining provisions hereof; instead, each provision
shall be fully severable and the Plan shall be construed and enforced
as if said illegal or invalid provision had never been included herein.
(f) Governing Law. All provisions of the Plan shall be construed
in accordance with the laws of Delaware except to the extent preempted
by federal law.
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