Executive Employment Agreement - Halliburton Co. and Richard B. Cheney - Vice President Dick Cheney Halliburton Employment Contract
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement"), including the
attached Exhibits "A", "B" and "C", is entered into by and between Halliburton
Company, a Delaware corporation having offices at 3600 Lincoln Plaza, 500 N.
Akard Street, Dallas, Texas 75201-3391 ("Employer"), and Richard B. Cheney, an
individual currently residing at 2920 White Pine Lane, Jackson, Wyoming 83001
("Employee"), to be effective on the later of the date of execution of this
Agreement by the parties hereto or the date of approval of this Agreement by the
Board of Directors of Employer pursuant to the provisions of Section 6.2 (the
"Effective Date").
WITNESSETH:
WHEREAS, Employer is desirous of employing Employee pursuant to the
terms and conditions and for the consideration set forth in this Agreement, and
Employee is desirous of entering the employ of Employer pursuant to such terms
and conditions and for such consideration.
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein, Employer and Employee agree as
follows:
ARTICLE 1: EMPLOYMENT AND DUTIES:
1.1. Employer agrees to employ Employee, and Employee agrees to be
employed by Employer, beginning as of the Effective Date and continuing until
September 30, 2003 (the "Term"), subject to the terms and conditions of this
Agreement.
1.2. Beginning October 1, 1995, Employee shall be employed as Chief
Executive Officer and President of Employer. Employee agrees to serve in the
assigned position and to perform diligently and to the best of Employee's
abilities the duties and services appertaining to such position as determined by
Employer, as well as such additional or different duties and services
appropriate to such position which Employee from time to time may be reasonably
directed to perform by Employer. As of the Effective Date, Employee shall be
elected as a member of Employer's Board of Directors and, upon the retirement of
the incumbent Chairman of the Employer's Board of Directors, shall be elected to
serve as the Chairman of the Employer's Board of Directors. Employee shall at
all times comply with and be subject to such policies and procedures as Employer
may establish from time to time.
1.3. Employee shall, during the period of Employee's employment by
Employer, devote Employee's full business time, energy, and best efforts to the
business and affairs of Employer; provided, however, that it is agreed that
Employee's employment shall be on an asneeded basis between the Effective Date
and October 1, 1995 in order to enable Employee to wind up certain business
matters and to relocate his residence, and further provided that Employee shall
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be permitted to complete any speaking engagements for which he is contractually
committed on the Effective Date. Subject to the provisos to the immediately
preceding sentence, Employee may not engage, directly or indirectly, in any
other business, investment, or activity that interferes with Employee's
performance of Employee's duties hereunder, is contrary to the interests of
Employer, or requires any significant portion of Employee's business time. The
foregoing notwithstanding, the parties recognize and agree that Employee may
engage in passive personal investments and other business activities which do
not conflict with the business and affairs of the Employer or interfere with
Employee's performance of his duties hereunder. In that regard, Employee may
serve on the board of directors of up to three corporations of his choice, so
long as service on any such board simultaneously with his service on Employer's
Board of Directors does not constitute a violation of federal statutory
provisions, or related rules and regulations, pertaining to interlocking
directorships and the meeting times of such boards of directors do not conflict
with the meeting times of Employer's Board of Directors. Except as provided in
the preceding sentence, Employee may not serve on the board of directors of any
entity other than the Employer during the Term without the approval of the Audit
Committee of the Employer's Board of Directors in accordance with the Employer's
policies and procedures regarding such service, which approval will not be
unreasonably withheld. Employee shall be permitted to retain any compensation
received for such speaking engagements and service on other corporations' boards
of directors.
1.4. Employee acknowledges and agrees that Employee owes a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of the Employer and to do no act which would intentionally injure
Employer's business, its interests, or its reputation. It is agreed that any
direct or indirect interest in, connection with, or benefit from any outside
activities, particularly commercial activities, which interest might in any way
adversely affect Employer, or any of its affiliates, involves a possible
conflict of interest. In keeping with Employee's fiduciary duties to Employer,
Employee agrees that Employee shall not knowingly become involved in a conflict
of interest with Employer, or its affiliates, or upon discovery thereof, allow
such a conflict to continue. Moreover, Employee agrees that Employee shall
disclose to the Audit Committee of the Employer's Board of Directors any facts
which might involve a possible conflict of interest.
1.5 Effective as of the Effective Date, Employer and Employee shall
enter into an Indemnification Agreement containing the terms and conditions set
forth in Exhibit A attached to, and forming a part of, this Agreement.
1.6 Employee represents that he is not aware of any pre-existing health
problems which have not been disclosed to Employer.
ARTICLE 2: COMPENSATION AND BENEFITS:
2.1. For the period between the Effective Date and December 31, 1995,
Employee's base salary shall be $250,000.00 which shall be paid in accordance
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with Employer's standard payroll practice for its executives commencing with the
payroll period beginning October 1, 1995. Thereafter, Employee's base salary
during the Term shall be not less than $1,000,000.00 per annum which shall be
paid in accordance with the Employer's standard payroll practice for its
executives.
2.2. Employee shall be entitled to a bonus of $150,000.00 for the period
between the Effective Date and December 31, 1995 provided he remains employed by
the Employer during the entirety of such period. Such bonus shall be payable in
a single lump sum payment as soon as practicable following December 31, 1995.
Beginning in 1996 and for the remainder of the Term, Employee shall participate
in Employer's Annual Reward Plan or such similar incentive arrangement as may be
mutually agreeable to Employee and Employer.
2.3. As of the Effective Date, the Employer shall grant to Employee
under the Halliburton Company 1993 Stock and Long-Term Incentive Plan a
nonqualified stock option to purchase up to 200,000 shares of the Employer's
common stock. The form and other terms and conditions of such option (other than
the exercise price, which shall be the closing price of Employer's common stock
on the New York Stock Exchange on the Effective Date) are set forth in Exhibit B
attached to, and forming a part of, this Agreement.
2.4. As of October 1, 1995, the Employer shall grant to Employee under
the Halliburton Company 1993 Stock and Long-Term Incentive Plan 100,000 shares
of the Employer's common stock subject to the restrictions and other terms and
conditions set forth in Exhibit C attached to, and forming a part of, this
Agreement.
2.5. At all times during the Term while Employee is employed by Employer
hereunder, Employee will be designated as a participant in the Halliburton
Company Senior Executives' Deferred Compensation Plan. For 1995, Employee will
receive an allocation of $125,000 to his Deferred Compensation Account under
such plan provided he remains employed with the Employer as of December 31, 1995
and thereafter during the Term will receive an allocation of at least
$500,000.00 to his Deferred Compensation Account thereunder at the end of each
full calendar year included in such Term provided he was employed by the
Employer throughout the calendar year for which such allocation is to be made.
2.6. The Employer will pay or reimburse Employee for all reasonable
expenses incurred by Employee in the course of moving his principal residence,
family and goods from Jackson, Wyoming to Dallas, Texas, including trips to and
from Dallas, Texas to locate a new residence, packing, unpacking, storage,
cartage and housing expenses of Employee and his family in Dallas, Texas for a
period of up to four months from October 1, 1995 and prior to Employee's
purchase of a new principal residence.
2.7. From and after the Effective Date, Employer shall pay, or reimburse
Employee, for all ordinary, reasonable and necessary expenses which Employee
incurs in performing his duties under this Agreement including, but not limited
to, travel, entertainment, professional dues and subscriptions, and all dues,
fees and expenses associated with membership in various professional, business
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and civic associations and societies of which Employee's participation is in the
best interest of Employer. Employer will reimburse Employee for reasonable legal
expenses in connection with the negotiation of this Agreement.
2.8. During the Term and while Employee is employed by Employer, and in
addition to any group term life insurance otherwise generally provided to
executive employees of Employer, Employer will purchase and maintain at its
expense term life insurance on the life of Employee in the face amount of
$2,500,000 payable to the beneficiary or beneficiaries designated by Employee;
provided, however, that Employer's obligation to purchase and maintain such
insurance shall be contingent upon Employee's insurability at no more than 150%
of standard risk costs from a high quality insurance carrier (excluding special
risk carriers).
2.9. While employed by Employer, Employee shall be allowed to
participate, on the same basis generally as other employees of Employer, in all
general employee benefit plans and programs, including improvements or
modifications of the same, which on the effective date or thereafter are made
available by Employer to all or substantially all of Employer's executive
employees. Such benefits, plans, and programs may include, without limitation,
medical, health, and dental care, life insurance, disability protection, and
qualified retirement plans. Except as specifically provided herein, nothing in
this Agreement is to be construed or interpreted to provide greater rights,
participation, coverage, or benefits under such benefit plans or programs than
provided to executive employees pursuant to the terms and conditions of such
benefit plans and programs.
2.10. Employer shall not by reason of this Article 2 be obligated to
institute, maintain, or refrain from changing, amending, or discontinuing, any
incentive compensation or employee benefit program or plan, so long as such
actions are similarly applicable to covered employees generally.
2.11. Employer may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
ARTICLE 3: TERMINATION PRIOR TO EXPIRATION OF TERM AND
EFFECTS OF SUCH TERMINATION:
3.1. Employee's employment with Employer shall be terminated (i) upon
the death of Employee, (ii) upon Employee's permanent disability (permanent
disability being defined as Employee's physical or mental incapacity to perform
his usual duties as an employee with such condition likely to remain
continuously and permanently); provided, however, that in such event, Employee's
employment shall be continued hereunder for a period of not less than one year
from the date of such disability, but not beyond the end of the Term, with
Employee's base salary during such period to be reduced by any Employer-financed
disability benefits, or (iii) subject to the provisions of clause (ii), at any
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time during the Term by Employer upon notice to Employee or by Employee upon 60
days' notice to Employer for any or no reason.
3.2. If Employee's employment is terminated by reason of a "Voluntary
Termination" (as hereinafter defined), the death of Employee, permanent
disability of Employee (as defined in Section 3.1) or by the Employer for
"Cause" (as hereinafter defined), all future compensation to which Employee is
otherwise entitled and all future benefits for which Employee is eligible shall
cease and terminate as of the date of termination, except as specifically
provided in this Section 3.2. Employee, or his estate in the case of Employee's
death, shall be entitled to pro rata base salary through the date of such
termination and shall be entitled to any individual bonuses or individual
incentive compensation not yet paid but due under Employer's plans but shall not
be entitled to any other payments by or on behalf of Employer except for those
which may be payable pursuant to the terms of Employer's employee benefit plans
(as hereinafter defined). For purposes of this Section 3.2, a "Voluntary
Termination" of the employment relationship by Employee prior to expiration of
the Term shall be a termination of employment in the sole discretion of and at
the election of Employee, other than (i) a termination of Employee's employment
because of a material breach by Employer of any material provision of this
Agreement which remains uncorrected for thirty (30) days following written
notice of such breach by Employee to Employer or (ii) a termination of
Employee's employment within six (6) months of a material reduction in
Employees' rank or responsibility with Employer. For purposes of this Section
3.2, the term "Cause" shall mean any of (i) Employee's gross negligence or
willful misconduct in the performance of the duties and services required of
Employee pursuant to this Agreement; (ii) Employee's final conviction of a
felony; or (iii) Employee's material breach of any material provision of this
Agreement which remains uncorrected for thirty (30) days following written
notice to Employee by Employer of such breach.
3.3. If Employee's employment is terminated for any reason other than as
described in Section 3.2 above during the Term, Employer shall pay to Employee a
severance benefit consisting of a single lump sum cash payment equal to the
value of any shares of Employer's common stock (based upon the closing price of
Employer's common stock on the New York Stock Exchange on the date of
termination of employment) which were granted to Employee pursuant to Section
2.4 and which are forfeited as a result of Employee's termination of employment
plus the lesser of (i) 150% of the base salary (referenced with respect to the
rate of such base salary as in effect at the date of Employee's termination of
employment) that Employee would have received between the date of such
termination of employment and the end of the Term or (ii) $3,000,000. Such
severance benefit shall be paid no later than sixty (60) days following
Employee's termination of employment. The severance benefit paid pursuant to
this Section 3.3 to Employee shall be in consideration of Employee's continuing
obligations hereunder after such termination (including, without limitation,
Employee's non-competition obligations). Employee shall not be under any duty or
obligation to seek or accept other employment following a termination of
employment pursuant to which severance benefit payments under this Section 3.3
are owing and the amounts due Employee pursuant to this Section 3.3 shall not be
reduced or suspended if Employee accepts subsequent employment or earns any
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amounts as a self-employed individual. Employee's rights under this Section 3.3
are Employee's sole and exclusive rights against the Employer or its affiliates
and the Employer's sole and exclusive liability to Employee under this
Agreement, in contract, tort or otherwise, for the termination of his employment
relationship with Employer. Employee covenants not to sue or lodge any claim,
demand or cause of action against Employer based upon Employee's termination of
employment for any monies other than those specified in this Section 3.3. If
Employee breaches this covenant, Employer shall be entitled to recover from
Employee all sums expended by Employer (including costs and attorneys' fees), in
connection with such suit, claim, demand or cause of action. Nothing contained
in this Section 3.3 shall be construed to be a waiver by Employee of any
benefits accrued for or due Employee under any employee benefit plan (as such
term is defined in the Employees' Retirement Income Security Act of 1974, as
amended) maintained by Employer.
3.4. It is expressly acknowledged and agreed that the decision as to
whether "Cause" exists for termination of the employment relationship by the
Employer and whether and as of what date Employee has become permanently
disabled is delegated to the Board of Directors of Employer for determination.
If Employee disagrees with the decision reached by Employer, the dispute will be
limited to whether the Board of Directors of Employer reached this decision in
good faith.
3.5. Termination of the employment relationship does not terminate those
obligations imposed by this Agreement which are continuing obligations,
including, without limitation, Employee's obligations under Articles 4 and 5.
ARTICLE 4: OWNERSHIP AND PROTECTION OF INTELLECTUAL
PROPERTY AND CONFIDENTIAL INFORMATION:
4.1. All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by Employee, individually or in conjunction with others, during
Employee's employment by Employer (whether during business hours or otherwise
and whether on Employer's premises or otherwise) which relate to Employer's
business, products or services (including, without limitation, all such
information relating to corporate opportunities, research, financial and sales
data, pricing and trading terms, evaluations, opinions, interpretations,
acquisition prospects, the identity of customers or their requirements, the
identity of key contacts within the customer's organizations or within the
organization of acquisition prospects, or marketing and merchandising
techniques, prospective names, and marks), and all writings or materials of any
type embodying any of such items, shall be disclosed to Employer and are and
shall be the sole and exclusive property of Employer.
4.2. Employee acknowledges that the businesses of Employer and its
affiliates are highly competitive and that their strategies, methods, books,
records, and documents, their technical information concerning their products,
equipment, services, and processes, procurement procedures and pricing
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techniques, the names of and other information (such as credit and financial
data) concerning their customers and business affiliates, all comprise
confidential business information and trade secrets which are valuable, special,
and unique assets which Employer, or its affiliates use in their business to
obtain a competitive advantage over their competitors. Employee further
acknowledges that protection of such confidential business information and trade
secrets against unauthorized disclosure and use is of critical importance to
Employer, and its affiliates in maintaining their competitive position. Employee
hereby agrees that Employee will not, at any time during or after his employment
by Employer, make any unauthorized disclosure of any confidential business
information or trade secrets of Employer, or its affiliates, or make any use
thereof, except in the carrying out of his employment responsibilities
hereunder. The above notwithstanding, a disclosure shall not be unauthorized if
(i) it is required by law or by a court of competent jurisdiction or (ii) it is
in connection with any judicial or other legal proceeding in which Employee's
legal rights and obligations as an employee or under this Agreement are at
issue; provided, however, that Employee shall, to the extent practicable and
lawful in any such events, give prior notice to Employer of his intent to
disclose any such confidential business information in such context so as to
allow Employer an opportunity (which Employee will not oppose) to obtain such
protective orders or similar relief with respect thereto as it may deem
appropriate.
4.3. All written materials, records, and other documents made by, or
coming into the possession of, Employee during the period of Employee's
employment by Employer which contain or disclose confidential business
information or trade secrets of Employer, or its affiliates shall be and remain
the property of Employer, or its affiliates, as the case may be. Upon
termination of Employee's employment by Employer, for any reason, Employee
promptly shall deliver the same, and all copies thereof, to Employer.
ARTICLE 5: POST-EMPLOYMENT AND NON-COMPETITION OBLIGATIONS:
5.1. As part of the consideration for the compensation and benefits to
be paid to Employee hereunder, and as an additional incentive for Employer to
enter into this Agreement, Employer and Employee agree to the non-competition
provisions of this Article 5. Employee agrees that during the period of
Employee's non-competition obligations hereunder, Employee will not, directly or
indirectly for Employee or for others, in any geographic area or market where
Employer or any of their affiliated companies are conducting any business (other
than de minimis business operations) as of the date of termination of the
employment relationship or have during the previous twelve months conducted any
business (other than de minimis business operations):
(i) engage in any business directly competitive with any business
(other than de minimis business operations) conducted by
Employer or any of Employer's affiliates;
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(ii) render advice or services to, or otherwise assist, any other
person, association, or entity who is engaged, directly or
indirectly, in any business directly competitive with any
business (other than de minimis business operations) conducted
by Employer or any of Employer's affiliates; or
(iii) induce any employee of Employer or any of its affiliates (other
than Employee's personal secretary or administrative assistant)
to terminate his employment with Employer, or itsaffiliates, or
hire or assist in the hiring of any such induced employee by any
person, association, or entity not affiliated with Employer.
These non-competition obligations shall extend until two years after termination
of the employment relationship between Employer and Employee. The above
notwithstanding, nothing in this Section 5.1 shall prohibit Employee from
engaging in or being employed by any entity that engages in the provision of
management consulting or other consulting services to third parties, even where
such entity on occasion renders advice or services to, or otherwise assists, any
other person, association, or entity who is engaged, directly or indirectly, in
any business directly competitive with any business conducted by Employer or any
of Employer's affiliates, so long as Employee does not personally, directly or
indirectly (A) participate in rendering such advice, services or assistance to
any such competing person, association or entity, (B) provide any information or
other assistance to any other person employed by Employee or by any such
consulting entity for use, directly or indirectly, in rendering such assistance
to any competing person, association or entity or (C) engage in any conduct
which would be violative of the provisions of Article 4 hereof.
5.2. Employee understands that the foregoing restrictions may limit his
ability to engage in certain businesses anywhere in the world during the period
provided for above, but acknowledges that Employee will receive sufficiently
high remuneration and other benefits under this Agreement to justify such
restriction. Employee acknowledges that money damages would not be sufficient
remedy for any breach of this Article 5 by Employee, and agrees that Employer,
on its own behalf or on behalf of any of its affiliates, shall be entitled to
specific performance and injunctive relief as remedies for such breach or any
threatened breach. Such remedies shall not be deemed the exclusive remedies for
a breach of this Article 5, but shall be in addition to all remedies available
at law or in equity to Employer, including, without limitation, the recovery of
damages from Employee and his agents involved in such breach.
5.3. It is expressly understood and agreed that Employer and Employee
consider the restrictions contained in this Article 5 to be reasonable and
necessary to protect the proprietary information and/or goodwill of Employer and
its affiliates. Nevertheless, if any of the aforesaid restrictions are found by
a court having jurisdiction to be unreasonable, or overly broad as to geographic
area or time, or otherwise unenforceable, the parties intend for the
restrictions therein set forth to be modified by such courts so as to be
reasonable and enforceable and, as so modified by the court, to be fully
enforced.
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ARTICLE 6: MISCELLANEOUS:
6.1. For purposes of this Agreement, (i) the terms "affiliates" or
"affiliated" means an entity who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
Employer or in which Employer has a 50% or more equity interest, and (ii) any
action or omission permitted to be taken or omitted by Employer hereunder shall
only be taken or omitted by Employer upon the express authority of the Board of
Directors of Employer or of any Committee of the Board to which authority over
such matters may have been delegated.
6.2 Although executed and delivered by the parties hereto, this
Agreement shall not become effective until such time as the Board of Directors
of Employer has expressly approved this Agreement. Employer agrees to notify
Employee promptly of the date of such approval.
6.3. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when received by or tendered to Employee or Employer, as
applicable, by pre-paid courier or by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Employer, to Halliburton Company at its corporate headquarters
to the attention of the General Counsel of Halliburton Company.
If to Employee, to his last known personal residence.
6.4. This Agreement shall be governed in all respects by the laws of the
State of Texas, excluding any conflict-of-law rule or principle that might refer
to the laws of another State or country.
6.5. No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
6.6. It is a desire and intent of the parties that the terms,
provisions, covenants, and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law. If any such term, provision,
covenant, or remedy of this Agreement or the application thereof to any person,
association, or entity or circumstances shall, to any extent, be construed to be
invalid or unenforceable in whole or in part, then such term, provision,
covenant, or remedy shall be construed in a manner so as to permit its
enforceability under the applicable law to the fullest extent permitted by law.
In any case, the remaining provisions of this Agreement or the application
thereof to any person, association, or entity or circumstances other than those
to which they have been held invalid or unenforceable, shall remain in full
force and effect.
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6.7. This Agreement shall be binding upon and inure to the benefit of
Employer and any other person, association, or entity which may hereafter
acquire or succeed to all or substantially all of the business or assets of
Employer by any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise. Employee's rights and obligations under this
Agreement are personal and such rights, benefits, and obligations of Employee
shall not be voluntarily or involuntarily assigned, alienated, or transferred,
whether by operation of law or otherwise, without the prior written consent of
Employer, other than in the case of death or incompetence of Employee.
6.8. This Agreement replaces and merges any previous agreements and
discussions pertaining to the subject matter covered herein. This Agreement
constitutes the entire agreement of the parties with regard to such subject
matter, and contains all of the covenants, promises, representations,
warranties, and agreements between the parties with respect such subject matter.
Each party to this Agreement acknowledges that no representation, inducement,
promise, or agreement, oral or written, has been made by either party with
respect to such subject matter, which is not embodied herein, and that no
agreement, statement, or promise relating to the employment of Employee by
Employer that is not contained in this Agreement shall be valid or binding. Any
modification of this Agreement will be effective only if it is in writing and
signed by each party whose rights hereunder are affected thereby, provided that
any such modification must be authorized or approved by the Board of Directors
of Employer.
IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement at Dallas, Texas in multiple originals to be effective on the date
first stated above.
HALLIBURTON COMPANY
By:
Thomas H. Cruikshank
Chairman of the Board and
Chief Executive Officer
EMPLOYEE
Name: Richard B. Cheney
Date: August 10, 1995
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Exhibit A To
Executive Employment Agreement
By and Between Richard B. Cheney and
Halliburton Company
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made this 10th day of August, 1995 by and between
Halliburton Company, a Delaware corporation, (the "Company") and Richard B.
Cheney (the "Indemnitee").
RECITALS
A. The Indemnitee has been requested to serve, or is presently serving,
as a Director and/or an officer of the Company. The Company desires the
Indemnitee to serve or to continue to serve in such capacity. The Company
believes that the Indemnitee's undertaking or continued undertaking of such
responsibilities is important to the Company and that the protection afforded by
this Agreement will enhance the Indemnitee's ability to discharge such
responsibilities under existing circumstances. The Indemnitee is willing,
subject to certain conditions including without limitation the execution and
performance of this Agreement by the Company and the Company's agreement to
provide the Indemnitee at all times the broadest and most favorable (to
Indemnitee) indemnification permitted by applicable law (whether by legislative
action or judicial decision), to serve or to continue to serve in that capacity.
B. In addition to the indemnification to which the Indemnitee is
entitled under the Composite Certificate of Incorporation of the Company (the
"Certificate") or the By-laws, as amended, of the Company (the "By-laws"), the
Company has purchased and currently maintains insurance protecting its officers
and directors and certain other persons (including the Indemnitee) against
certain losses arising out of actual or threatened actions, suits or proceedings
to which such persons may be made or threatened to be made parties ("D&O
Insurance").
NOW, THEREFORE, for and in consideration of the premises, the mutual
promises hereinafter set forth, the reliance of the Indemnitee hereon in
continuing to serve the Company in his present capacity and in undertaking to
serve the Company in any additional capacity or capacities, the Company and the
Indemnitee agree as follows:
1. Indemnification - General. The Company shall indemnify and advance
Expenses (as hereinafter defined) to Indemnitee to the fullest extent, and only
to the extent, permitted by applicable law in effect on the date hereof and to
such greater extent as applicable law may thereafter from time to time permit.
The rights of Indemnitee provided under the preceding sentence shall include,
but shall not be limited to, the rights set forth in the other Sections of this
Agreement.
Although there can be no assurance as to the continuation or renewal of
the D&O Insurance or that any such D&O Insurance will provide coverage for
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losses to which the Indemnitee may be exposed, the Company will use commercially
reasonable efforts, taking into consideration availability of D&O Insurance in
the marketplace, to continue D&O Insurance in effect at current levels for the
duration of Indemnitee's service and for six (6) years thereafter.
2. Proceedings Other than Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the indemnification rights provided in
this Section 2 if, by reason of his Corporate Status (as hereinafter defined),
he is, or is threatened to be made, a party to, or otherwise incurs Expenses in
connection with, any threatened, pending or completed Proceeding (as hereinafter
defined), other than a Proceeding by or in the right of the Company. Pursuant to
this Section 2, Indemnitee shall be indemnified against Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by him or on his behalf in connection with such Proceeding or any claim, issue
or matter therein, if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company, and,
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
3. Proceedings by or in the Right of the Company. Indemnitee shall be
entitled to the indemnification rights provided in this Section 3, if, by reason
of his Corporate Status, he is, or is threatened to be made, a party to, or
otherwise incurs Expenses in connection with, any threatened, pending or
completed Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 3, Indemnitee shall be
indemnified against Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Company. Notwithstanding the foregoing, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in such
Proceeding as to which Indemnitee shall have been adjudged to be liable to the
Company if applicable law prohibits such indemnification; provided, however,
that, if applicable law so permits, indemnification against Expenses shall
nevertheless be made by the Company despite such adjudication of liability, if
and only to the extent that the Court of Chancery of the State of Delaware, or
the court in which such Proceeding shall have been brought or is pending, shall
determine.
4. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For the purposes of this Section 4 and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
2
<PAGE>
5. Contribution. In the event that the indemnity contained in Sections
2, 3 or 4 of this Agreement is unavailable or insufficient to hold Indemnitee
harmless in a Proceeding described therein, then in accordance with the
non-exclusivity provisions of the Delaware General Corporation Law and the
Certificate and By-laws, and separate from and in addition to, the indemnity
provided elsewhere herein, the Company shall contribute to Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by or on behalf of Indemnitee in connection with such Proceeding or any claim,
issue or matter therein, in such proportion as appropriately reflects the
relative benefits received by, and fault of, the Company on the one hand and
Indemnitee on the other in the acts, transactions or matters to which the
Proceeding relates and other equitable considerations.
6. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including such
documentation and information as is reasonably available to Indemnitee
and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The determination of
Indemnitee's entitlement to indemnification shall be made not later
than 90 days after receipt by the Company of the written request for
indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested indemnification.
(b) Indemnitee's entitlement to indemnification under any of
Sections 2, 3, 4 and 5 of this Agreement shall be determined in the
specific case: (i) by the Board of Directors by a majority vote of a
quorum of the Board consisting of Disinterested Directors (as
hereinafter defined); (ii) by Independent Counsel (as hereinafter
defined), in a written opinion if a quorum of the Board of Directors
consisting of Disinterested Directors is not obtainable or, even if
obtainable, such quorum of Disinterested Directors so directs; or (iii)
by the stockholders of the Company. If, with regard to Section 5 of
this Agreement, such a determination is not permitted by law or if a
quorum of Disinterested Directors so directs, such determination shall
be made by the Chancery Court of the State of Delaware or the court in
which the Proceeding giving rise to the claim for indemnification is
brought.
(c) In the event that the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 6(b) of this Agreement, the Independent Counsel shall be
selected as provided in this Section 6(c). The Independent Counsel
shall be selected by the Board of Directors, and the Company shall give
written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. Indemnitee may, within 7 days after
receipt of such written notice of selection shall have been given,
deliver to the Company a written objection to such selection. Such
objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of "Independent
3
<PAGE>
Counsel" as defined in Section 13 of this Agreement, and the objection
shall set forth with particularity the factual basis of such assertion.
If such written objection is made, the Independent Counsel so selected
shall be disqualified from acting as such. If, within 20 days after
submission by Indemnitee of a written request for indemnification
pursuant to Section 6(a) of this Agreement, no Independent Counsel
shall have been selected, or if selected shall have been objected to,
in accordance with this Section 6(c), either the Company or Indemnitee
may petition the Court of Chancery of the State of Delaware for the
appointment as Independent Counsel of a person selected by such court
or by such other person as such court shall designate, and the person
so appointed shall act as Independent Counsel under Section 6(b) of
this Agreement, and the Company shall pay all reasonable fees and
expenses incident to the procedures of this Section 6(c), regardless of
the manner in which such Independent Counsel was selected or appointed.
7. Advancement of Expenses. The Company shall advance all reasonable
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding within 20 days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such Proceeding. Indemnitee
shall, and hereby undertakes to, repay any Expenses advanced if it shall
ultimately be determined that Indemnitee is not entitled to be indemnified
against such Expenses.
8. Presumptions and Effect of Certain Proceedings. The termination of
any proceeding described in any of Sections 2, 3 or 4 of this Agreement, or of
any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company or, with
respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.
9. Term of Agreement. All agreements and obligations of the Company
contained herein shall commence as of the time the Indemnitee commenced to serve
as a director, officer, employee or agent of the Company (or commenced to serve
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise) and shall continue for so long as Indemnitee shall so serve or
shall be, or could become, subject to any possible Proceeding in respect of
which Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder.
10. Notification and Defense of Claim. Promptly after receipt by
Indemnitee of notice of the commencement of any Proceeding, Indemnitee will, if
a claim in respect thereof is to be made against the Company under this
Agreement, notify the Company of the commencement thereof; but the omission to
notify the Company will not relieve it from any liability which it may have to
Indemnitee otherwise than under this Agreement. With respect to any such
Proceeding as to which Indemnitee notifies the Company of the commencement
thereof:
4
<PAGE>
(a) The Company will be entitled to participate therein at its
own expense.
(b) Except as otherwise provided below, to the extent that it
may wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof, with
counsel satisfactory to Indemnitee. After notice from the Company to
Indemnitee of its election so to assume the defense thereof, the
Company will not be liable to Indemnitee under this Agreement for any
legal or other Expenses subsequently incurred by Indemnitee in
connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the
right to employ its counsel in such Proceeding but the fees and
Expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of Indemnitee
unless (i) the employment of counsel by Indemnitee has been authorized
by the Company, or (ii) Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company and Indemnitee
in the conduct of the defense of such Proceeding, or (iii) the Company
shall not in fact have employed counsel to assume the defense of such
Proceeding, in each of which cases the fees and Expenses of counsel
shall be at the expense of the Company. The Company shall not be
entitled to assume the defense of any Proceeding brought by or on
behalf of the Company or as to which Indemnitee shall have made the
conclusion provided for in (ii) above.
(c) The Company shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any
Proceeding or claim effected without its written consent. The Company
shall not settle any Proceeding or claim in any manner which would
impose any penalty or limitation on Indemnitee without Indemnitee's
written consent. Neither the Company nor Indemnitee will unreasonably
withhold their consent to any proposed settlement.
11. Enforcement.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it
hereby in order to induce Indemnitee to serve or continue to serve as a
director and/or officer of the Company, and acknowledges that
Indemnitee is relying upon this Agreement in serving or continuing to
serve in such capacity.
(b) In the event Indemnitee is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Company shall reimburse Indemnitee for
all of Indemnitee's reasonable fees and Expenses in bringing and
pursuing such action.
12. Non-Exclusivity of Rights. The rights of indemnification and to
receive advancement of Expenses as provided by this Agreement shall not be
5
<PAGE>
deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Certificate, the By-laws, any agreement, a
vote of stockholders or a resolution of directors, or otherwise.
13. Definitions. For purposes of this Agreement:
(a) "Corporate Status" describes the status of a person who is
or was a director, officer, employee, agent or fiduciary of the Company
or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person is or was
serving at the request of the Company.
(b) "Disinterested Director" means a director of the Company who
is not and was not at any time a party to the Proceeding in respect of
which indemnification is sought by Indemnitee.
(c) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other
disbursements or Expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend or investigating a Proceeding.
(d) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter material to
either such party or (ii) any other party to the Proceeding giving rise
to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any person
who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either
the Company or Indemnitee in an action to determine Indemnitee's rights
under this Agreement.
(e) "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative
hearing or any other proceeding whether civil, criminal, administrative
or investigative.
14. Severability. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.
15. Governing Law; Binding Effect; Amendment and Termination.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY
6
<PAGE>
CONFLICT-OF-LAW RULE OR PRINCIPLE THAT MIGHT REFER TO THE
LAWS OF ANOTHER STATE OR COUNTRY.
(b) This Agreement shall be binding upon Indemnitee and upon the
Company, its successors and assigns, and shall inure to the benefit of
Indemnitee, his heirs, personal representatives and assigns and to the
benefit of the Company, its successors and assigns.
(c) No amendment, modification, termination or cancellation of
this Agreement shall be effective unless in writing by the parties.
The parties have executed this Agreement as of the day and year first
above written.
HALLIBURTON COMPANY
By: /s/ Thomas H. Cruikshank
-----------------------------
Thomas H. Cruikshank
Chairman of the Board and
Chief Executive Officer
/s/ Richard B. Cheney
------------------------------
Richard B. Cheney
Indemnitee
7
<PAGE>
Exhibit B to
Executive Employment Agreement
By and Between Richard B. Cheney and
Halliburton Company
NONSTATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the 10th day of August, 1995, between HALLIBURTON
COMPANY, a Delaware corporation (the "Company"), and Richard B. Cheney
("Employee").
To carry out the purposes of the HALLIBURTON COMPANY 1993 STOCK AND
LONG-TERM INCENTIVE PLAN (the "Plan"), by affording Employee the opportunity to
purchase shares of common stock, par value $2.50 per share, of the Company
("Stock"), and in consideration of the mutual agreements and other matters set
forth herein and in the Plan, the Company and Employee hereby agree as follows:
1. Grant of Option. The Company hereby irrevocably grants to Employee
the right and option ("Option") to purchase all or any part of an aggregate of
200,000 shares of Stock, on the terms and conditions set forth herein and in the
Plan, which Plan is incorporated herein by reference as a part of this
Agreement. This Option shall not be treated as an incentive stock option within
the meaning of section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code").
2. Purchase Price. The purchase price of Stock purchased pursuant to
the exercise of this Option shall be $_______ per share, which has been
determined to be not less than the fair market value of the Stock at the date of
grant of this Option. For all purposes of this Agreement, fair market value of
Stock shall be determined in accordance with the provisions of the Plan.
3. Exercise of Option. Subject to the earlier expiration of this Option
as herein provided, this Option may be exercised, by written notice to the
Company at its principal executive office addressed to the attention of its Vice
President and Secretary, at any time and from time to time after the date of
grant hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a percentage of the aggregate number of shares offered
by this Option determined by the number of full years from the date of grant
hereof to the date of such exercise, in accordance with the following schedule:
<TABLE>
<CAPTION>
Percentage of Shares
Number of Full Years That May be Purchased
<S> <C>
Less than 1 year 0%
1 year 33 1/3%
2 years 67%
3 years 100%
</TABLE>
<PAGE>
This Option is not transferable by Employee otherwise than by will or
the laws of descent and distribution, and may be exercised only by Employee
during Employee's lifetime. This Option may be exercised only while Employee
remains an employee of the Company, subject to the following exceptions:
(a) If Employee's employment with the Company terminates by
reason of disability (disability being defined as being physically or
mentally incapable of performing the Employee's usual duties as an
Employee with such condition likely to remain continuously and
permanently, as determined by the Committee administering the Plan (the
"Committee")), this Option may be exercised in full by Employee (or
Employee's estate or the person who acquires this Option by will or the
laws of descent and distribution or otherwise by reason of the death of
Employee) at any time during the period ending on the Expiration Date.
(b) If Employee dies while in the employ of the Company,
Employee's estate, or the person who acquires this Option by will or
the laws of descent and distribution or otherwise by reason of the
death of Employee, may exercise this Option in full at any time during
the period ending on the Expiration Date.
(c) If Employee's employment with the Company terminates by
reason of retirement at or after age 62 or earlier retirement with
consent of the Committee, this Option may be exercised in full by
Employee at any time during the period ending on the Expiration Date
(as defined below). If Employee dies after such retirement, this Option
may be exercised in full by Employee's estate (or the person who
acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of the Employee) during the period
ending on the Expiration Date.
(d) If Employee's employment with the Company is terminated by
the Company other than for "Cause" or Employee terminates his
employment with the Company (i) because of a material breach by the
Company of any material provision of any employment agreement between
the Company and Employee which remains uncorrected for 30 days
following written notice of such breach by Employee to the Company or
(ii) within six months of a material reduction in Employee's rank or
responsibilities with the Company, this Option may be exercised in full
by Employee at any time during the period ending on the Expiration Date
or by Employee's estate (or the person who acquires this Option by will
or the laws of descent and distribution or otherwise by reason of the
death of the Employee) during the period ending on the Expiration Date
if Employee dies during such period. For purposes of this Agreement,
the term "Cause" shall mean any of (i) Employee's gross negligence or
willful misconduct in the performance of the duties and services
required of Employee pursuant to this Agreement, (ii) Employee's final
conviction of a felony; or (iii) Employee's material breach of any
material provision of this Agreement which remains uncorrected for 30
days following written notice to Employee by the Company of such
breach.
-2-
<PAGE>
(e) If Employee's employment with the Company terminates for any
reason other than those set forth in subparagraphs (a) through (d)
above, this Option may be exercised by Employee at any time during the
period of 30 days following such termination, or by Employee's estate
(or the person who acquires this Option by will or the laws of descent
and distribution or otherwise by reason of the death of the Employee)
during a period of six months following Employee's death if Employee
dies during such 30-day period, but in each case only as to the number
of shares Employee was entitled to purchase hereunder upon exercise of
this Option as of the date Employee's employment so terminates.
This Option shall not be exercisable in any event prior to the
expiration of six months from the date of grant hereof or after the expiration
of ten years from the date of grant hereof (the "Expiration Date")
notwithstanding anything hereinabove contained. The purchase price of shares as
to which this Option is exercised shall be paid in full at the time of exercise
(a) in cash (including check, bank draft or money order payable to the order of
the Company), (b) by delivering to the Company shares of Stock having a fair
market value equal to the purchase price, or (c) by a combination of cash or
Stock. Payment may also be made, in the discretion of the Committee or its
delegate, as appropriate, by delivery (including by facsimile transmission) to
the Company of an executed irrevocable option exercise form, coupled with
irrevocable instructions to a broker-dealer designated by the Company to
simultaneously sell a sufficient number of the shares as to which the option is
exercised and deliver directly to the Company that portion of the sales proceeds
representing the exercise price. No fraction of a share of Stock shall be issued
by the Company upon exercise of an Option or accepted by the Company in payment
of the purchase price thereof; rather, Employee shall provide a cash payment for
such amount as is necessary to effect the issuance and acceptance of only whole
shares of Stock. Unless and until a certificate or certificates representing
such shares shall have been issued by the Company to Employee, Employee (or the
person permitted to exercise this Option in the event of Employee's death) shall
not be or have any of the rights or privileges of a shareholder of the Company
with respect to shares acquirable upon an exercise of this Option.
4. Withholding of Tax. To the extent that the exercise of this Option
or the disposition of shares of Stock acquired by exercise of this Option
results in compensation income to Employee for federal or state income tax
purposes, Employee shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may require
to meet its withholding obligation under applicable tax laws or regulations,
and, if Employee fails to do so, the Company is authorized to withhold from any
cash or Stock remuneration then or thereafter payable to Employee any tax
required to be withheld by reason of such resulting compensation income. Upon an
exercise of this Option, the Company is further authorized in its discretion to
satisfy any such withholding requirement out of any cash or shares of Stock
distributable to Employee upon such exercise.
-3-
<PAGE>
5. Status of Stock. Notwithstanding any other provision of this
Agreement, in the absence of an effective registration statement for issuance
under the Securities Act of 1933, as amended (the "Act"), of the shares of Stock
acquirable upon exercise of this Option, or an available exemption from
registration under the Act, issuance of shares of Stock acquirable upon exercise
of this Option will be delayed until registration of such shares is effective or
an exemption from registration under the Act is available. The Company intends
to use its best efforts to ensure that no such delay will occur. In the event
exemption from registration under the Act is available upon an exercise of this
Option, Employee (or the person permitted to exercise this Option in the event
of Employee's death or incapacity), if requested by the Company to do so, will
execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.
Employee agrees that the shares of Stock which Employee may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable securities laws, whether
federal or state. Employee also agrees (i) that the certificates representing
the shares of Stock purchased under this Option may bear such legend or legends
as the Company deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the Company if such proposed transfer would in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities
law and (iii) that the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the shares of Stock
purchased under this Option.
If Employee desires to sell any shares of Stock acquired pursuant to
the provisions of this Agreement and if such shares may not be sold on the open
market without registration pursuant to applicable securities laws, then the
Company shall, within five days after notice from Employee indicating his
intention to sell such shares and the number of shares to be sold, purchase for
cash such shares at a price per share based on the closing sales price for
shares of Stock traded on the New York Stock Exchange on the date of receipt by
the Company of said notice.
6. Employment Relationship. For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of either the Company, a parent or subsidiary corporation
(as defined in section 424 of the Code) of the Company, or a corporation or a
parent or subsidiary of such corporation assuming or substituting a new option
for this Option. Any question as to whether and when there has been a
termination of such employment, and the cause of such termination, shall be
determined by the Committee or its delegate, as appropriate, and such
determination shall be final.
7. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
8. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas, excluding any conflict-of-law
rule or principle that might refer to the laws of another State or country.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all as of the day and year first above written.
HALLIBURTON COMPANY
By:--------------------------
Thomas H. Cruikshank
Chairman of the Board and
Chief Executive Officer
--------------------------
Richard B. Cheney
Employee
-5-
<PAGE>
Attachment to Nonstatutory Stock Option Agreement
Please furnish the following information for shareholder records:
------------------------------- -----------------------------
(Given name and initial must be used Social Security Number
for stock registry) (if applicable)
------------------------------- -----------------------------
Birth Date
Month/Day/Year
------------------------------- -----------------------------
Name of Employer
------------------------------- -----------------------------
Address (Zip Code) Day phone number
United States Citizen: Yes x No___
PROMPTLY NOTIFY THE VICE PRESIDENT AND SECRETARY
OF HALLIBURTON COMPANY
3600 LINCOLN PLAZA, DALLAS, TEXAS 75201
OF ANY CHANGE IN ADDRESS.
-6-
<PAGE>
Exhibit C to
Executive Employment Agreement
By and Between Richard B. Cheney and
Halliburton Company
RESTRICTED STOCK AGREEMENT
AGREEMENT made as of the 1st day of October, 1995, between HALLIBURTON
COMPANY, a Delaware corporation (the "Company"), and Richard B. Cheney
("Employee").
1. Award.
(a) Shares. Pursuant to the Halliburton Company 1993 Stock and
Long-Term Incentive Plan (the "Plan"), 100,000 shares (the "Restricted Shares")
of the Company's common stock, par value $2.50 per share ("Stock"), shall be
issued as hereinafter provided in Employee's name subject to certain
restrictions thereon.
(b) Issuance of Restricted Shares. The Restricted Shares shall
be issued upon acceptance hereof by Employee and upon satisfaction of the
conditions of this Agreement.
(c) Plan Incorporated. Employee acknowledges receipt of a copy
of the Plan, and agrees that this award of Restricted Shares shall be subject to
all of the terms and conditions set forth in the Plan, including future
amendments thereto, if any, pursuant to the terms thereof, which Plan is
incorporated herein by reference as a part of this Agreement.
2. Restricted Shares. Employee hereby accepts the Restricted Shares
when issued and agrees with respect thereto as follows:
(a) Forfeiture Restrictions. The Restricted Shares may not be
sold, assigned, pledged, exchanged, hypothecated or otherwise transferred,
encumbered or disposed of to the extent then subject to the Forfeiture
Restrictions (as hereinafter defined), and in the event of termination of
Employee's employment with the Company for a reason other than those set forth
in the first sentence of subparagraph (c) of this Paragraph 2, Employee shall,
for no consideration, forfeit to the Company all Restricted Shares to the extent
then subject to the Forfeiture Restrictions. The prohibition against transfer
and the obligation to forfeit and surrender Restricted Shares to the Company
upon termination of employment are herein referred to as "Forfeiture
Restrictions." The Forfeiture Restrictions shall be binding upon and enforceable
against any transferee of Restricted Shares.
<PAGE>
(b) Lapse of Forfeiture Restrictions. The Forfeiture
Restrictions shall lapse as to the Restricted Shares in accordance with the
following schedule provided that Employee has been continuously employed by the
Company from the date of this Agreement through the lapse date:
<TABLE>
<CAPTION>
Percentage of Total
Number of Restricted Shares
as to Which Forfeiture
Lapse Date Restrictions Lapse
<S> <C>
First Anniversary of the
date of this Agreement 12.5%
Second Anniversary of the
date of this Agreement 12.5%
Third Anniversary of the
date of this Agreement 12.5%
Fourth Anniversary of the
date of this Agreement 12.5%
Fifth Anniversary of the
date of this Agreement 12.5%
Sixth Anniversary of the
date of this Agreement 12.5%
Seventh Anniversary of the
date of this Agreement 12.5%
Eighth Anniversary of the
date of this Agreement 12.5%
</TABLE>
(c) Notwithstanding the provisions of subparagraph (b) of
Paragraph 2, the Forfeiture Restrictions shall lapse as to all of the Restricted
Shares on the earlier of (i) the occurrence of a Corporate Change (as such term
is defined in the Plan), or (ii) the date Employee's employment with the Company
is terminated by reason of death, disability (disability being defined as being
physically or mentally incapable of performing Employee's usual duties as an
employee, with such condition likely to remain continuously and permanently, as
determined by the Committee which administers the Plan (the "Committee")),
2
<PAGE>
retirement on or after age sixty-two or retirement prior to age sixty-two with
consent of the Committee, or (iii) involuntary termination by the Company other
than for Cause or (iv) Employee's termination of his employment with the Company
(y) because of a material breach by the Company of any material provision of any
employment agreement between the Company and Employee which remains uncorrected
for thirty (30) days following written notice of such breach by Employee to the
Company or (z) within six (6) months of a material reduction in Employee's rank
or responsibilities with the Company. For purposes of this Agreement, the term
"Cause" shall mean any of (i) Employee's gross negligence or willful misconduct
in the performance of the duties and services required of Employee pursuant to
this Agreement, (ii) Employee's final conviction of a felony; or (iii)
Employee's material breach of any material provision of this Agreement which
remains uncorrected for thirty (30) days following written notice to Employee by
the Company of such breach.
(d) Certificates. A certificate evidencing the Restricted Shares
shall be issued by the Company in Employee's name, or at the option of the
Company, in the name of a nominee of the Company, pursuant to which Employee
shall have voting rights and shall be entitled to receive all dividends unless
and until the Restricted Shares are forfeited pursuant to the provisions of this
Agreement. The certificate shall bear a legend evidencing the nature of the
Restricted Shares, and the Company may cause the certificate to be delivered
upon issuance to the Secretary of the Company or to such other depository as may
be designated by the Company as a depository for safekeeping until the
forfeiture occurs or the Forfeiture Restrictions lapse pursuant to the terms of
the Plan and this award. Upon request of the Committee or its delegate, Employee
shall deliver to the Company a stock power, endorsed in blank, relating to the
Restricted Shares then subject to the Forfeiture Restrictions. Upon the lapse of
the Forfeiture Restrictions without forfeiture, the Company shall cause a new
certificate or certificates to be issued without legend in the name of Employee
for the shares upon which Forfeiture Restrictions lapsed. Notwithstanding any
other provisions of this Agreement, the issuance or delivery of any shares of
Stock (whether subject to restrictions or unrestricted) may be postponed for
such period as may be required to comply with applicable requirements of any
national securities exchange or any requirements under any law or regulation
applicable to the issuance or delivery of such shares. The Company shall not be
obligated to issue or deliver any shares of Stock if the issuance or delivery
thereof shall constitute a violation of any provision of any law or of any
regulation of any governmental authority or any national securities exchange.
3. Withholding of Tax. To the extent that the receipt of the Restricted
Shares or the lapse of any Forfeiture Restrictions results in income to Employee
for federal or state income tax purposes, Employee shall deliver to the Company
at the time of such receipt or lapse, as the case may be, such amount of money
or shares of unrestricted Stock as the Company may require to meet its
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withholding obligation under applicable tax laws or regulations, and, if
Employee fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Employee any tax required to be
withheld by reason of such resulting compensation income.
4. Status of Stock. Employee agrees that the Restricted Shares will not
be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities laws. Employee also
agrees (i) that the certificates representing the Restricted Shares may bear
such legend or legends as the Company deems appropriate in order to assure
compliance with applicable securities laws, (ii) that the Company may refuse to
register the transfer of the Restricted Shares on the stock transfer records of
the Company if such proposed transfer would be in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities
law and (iii) that the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the Restricted Shares. If
Employee desires to sell any shares of Common Stock acquired pursuant to the
provisions of this Agreement upon which restrictions have theretofore lapsed and
if such shares may not be sold on the open market without registration pursuant
to applicable securities laws, then the Company shall, within five (5) days
after notice from the Employee indicating his intention to sell such shares and
the number of shares to be sold, purchase for cash such shares at a price per
share based on the closing sales price for shares of Common Stock traded on the
New York Stock Exchange on the date of receipt by the Company of said notice.
5. Employment Relationship. For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of either the Company, any successor corporation or a parent
or subsidiary corporation (as defined in section 424 of the Code) of the Company
or any successor corporation. Any question as to whether and when there has been
a termination of such employment, and the cause of such termination, shall be
determined by the Committee, and its determination shall be final.
6. Committee's Powers. No provision contained in this Agreement shall
in any way terminate, modify or alter, or be construed or interpreted as
terminating, modifying or altering any of the powers, rights or authority vested
in the Committee or, to the extent delegated, in its delegate pursuant to the
terms of the Plan or resolutions adopted in furtherance of the Plan, including,
without limitation, the right to make certain determinations and elections with
respect to the Restricted Shares.
7. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
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8. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas, excluding any conflict-of-law
rule or principle that might refer to the laws of another State or country.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by an officer thereunto duly authorized, and Employee has executed this
Agreement, all as of the date first above written.
HALLIBURTON COMPANY
By:------------------------------
Thomas H. Cruikshank
Chairman of the Board and
Chief Executive Officer
------------------------------
Richard. B. Cheney
Employee
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Please Check Appropriate Item (One of the boxes must be checked):
--- I do not desire the alternative tax treatment provided for
--- in the Internal Revenue Code Section 83(b).
---* I do desire the alternative tax treatment provided for in
--- Internal Revenue Code Section 83(b) and desire that forms
for such purpose be forwarded to me.
* I acknowledge that the Company has suggested that before this block is
checked that I check with a tax consultant of my choice.
Please furnish the following information for shareholder records:
---------------------------- ------------------------
(Given name and initial must be used Social Security Number
for stock registry) (if applicable)
---------------------------- ------------------------
Birth Date
Month/Day/Year
---------------------------- ------------------------
Name of Employer
---------------------------- ------------------------
Address (Zip Code) Day phone number
United States Citizen: Yes No___
PROMPTLY NOTIFY THIS OFFICE OF ANY CHANGE IN ADDRESS.
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