Directors' Deferred Compensation Plan - Halliburton Co.
HALLIBURTON COMPANY
DIRECTORS' DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED
EFFECTIVE AS OF OCTOBER 22, 2002
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TABLE OF CONTENTS
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ARTICLE I PURPOSE OF PLAN..........................................................................2
ARTICLE II DEFINITIONS..............................................................................3
ARTICLE III ADMINISTRATION OF THE PLAN...............................................................5
ARTICLE IV DEFERRED COMPENSATION....................................................................6
ARTICLE V DEFERRED COMPENSATION SUBJECT TO INTEREST................................................7
ARTICLE VI STOCK EQUIVALENTS........................................................................8
ARTICLE VII NATURE OF PLAN..........................................................................10
ARTICLE VIII TERMINATION OF THE PLAN.................................................................11
ARTICLE IX AMENDMENT OF THE PLAN...................................................................12
ARTICLE X GENERAL PROVISIONS......................................................................13
ARTICLE XI EFFECTIVE DATE..........................................................................14
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HALLIBURTON COMPANY
DIRECTORS' DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED
EFFECTIVE AS OF OCTOBER 22, 2002
The Board of Directors of Halliburton Company having heretofore
established the Directors' Deferred Compensation Plan, pursuant to the
provisions of Article VII of said Plan, hereby amends and supplements said Plan
to be effective in accordance with the provisions of ARTICLE XI hereof.
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ARTICLE I
PURPOSE OF PLAN
The purpose of the Plan is to assist the Directors of the Company in
planning for their retirement.
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ARTICLE II
DEFINITIONS
Where the following words and phrases appear herein, they shall have
the respective meanings set forth in this ARTICLE II, unless the context clearly
indicates to the contrary.
Section 2.01. "Administrator" shall mean any administrator appointed by
the Committee pursuant to Section 3.01 herein or, in the absence of any such
appointment, the Committee.
Section 2.02. "Board of Directors" shall mean the Board of Directors of
the Company.
Section 2.03. "Committee" shall mean the committee of those individuals
(each of whom shall be a Director) appointed by the Board of Directors pursuant
to Article III hereof.
Section 2.04. "Company" shall mean Halliburton Company.
Section 2.05. "Compensation" shall mean a Participant's compensation
for services as a Director.
Section 2.06. "Deferral Termination Date" shall mean the date a
Participant ceases to be a Director of the Company.
Section 2.07. "Deferred Compensation" shall mean Compensation deferred
pursuant to the provisions of this Plan.
Section 2.08. "Deferred Compensation Account" shall mean the
Participant's Deferred Compensation Account established pursuant to Section 4.03
herein.
Section 2.09. "Director" shall mean a member of the Board of Directors
of the Company.
Section 2.10. "Earned" or any variant thereof, when used herein with
respect to Compensation or Deferred Compensation or interest accrued pursuant to
Section 5.02, shall refer to the end of a Fiscal Quarter and, when used with
respect to a dividend or distribution on the Company's common stock referenced
in Section 6.02, shall refer to the date of payment of such dividend or
distribution by the Company.
Section 2.11. "Fiscal Quarter" shall mean the quarters of the Fiscal
Year ended July 31, October 31, January 31 and April 30.
Section 2.12. "Fiscal Year" shall mean the twelve-consecutive-month
period commencing May 1 of each year.
Section 2.13. "Market Price" of the common stock of the Company on any
date shall mean the closing sales price per share for the common stock (or, if
no closing sales price is reported, the average of the bid and ask prices per
share on such date) on the New York Stock Exchange or, if the common stock is
not then listed on such Exchange, such other national or regional securities
exchange upon which the common stock is so listed, as reported in the composite
transactions for the principal United States securities exchange on which the
common stock is then listed or, if the common stock is not then listed on any
such exchange, as reported in The NASDAQ Stock Market.
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Section 2.14. "Participant" shall mean any Director of the Company who
has elected to have all or a part of his Compensation deferred pursuant to the
Plan.
Section 2.15. "Plan" shall mean the Halliburton Company Directors'
Deferred Compensation Plan, as amended and restated effective as of October 22,
2002, and as the same may thereafter be amended from time to time.
Section 2.16. "Plan Earnings" shall mean amounts of interest to which
reference is made in Section 5.01 herein and of dividends and distributions to
which reference is made in Section 6.02 herein.
Section 2.17. "Stock Equivalent" shall mean a measure of value equal to
one share of the Company's common stock.
Section 2.18. "Stock Equivalents Account" shall mean the Participant's
Stock Equivalents Account established pursuant to Section 4.03 herein.
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ARTICLE III
ADMINISTRATION OF THE PLAN
Section 3.01. Committee. The Board of Directors shall appoint a
Committee to administer, construe and interpret the Plan. Such Committee, or
such successor Committee as may be duly appointed by the Board of Directors,
shall serve at the pleasure of the Board of Directors. Decisions of the
Committee with respect to any matter involving the Plan shall be final and
binding on the Company and all Participants. The Committee may designate an
Administrator to aid the Committee in its administration of the Plan. Such
Administrator shall maintain complete and adequate records pertaining to the
Plan, including but not limited to Participants' Deferred Compensation Accounts
and Stock Equivalent Accounts, and shall serve at the pleasure of the Committee.
Section 3.02. Indemnity.
(a) Indemnification. The Company (the "Indemnifying Party")
hereby agrees to indemnify and hold harmless the members of the
Committee and any Administrator designated by the Committee (the
"Indemnified Parties") against any losses, claims, damages or
liabilities to which any of the Indemnified Parties may become subject
to the extent that such losses, claims, damages or liabilities or
actions in respect thereof arise out of or are based upon any act or
omission of such Indemnified Party in connection with the
administration of this Plan (including any act or omission constituting
negligence on the part of such Indemnified Party, but excluding any act
or omission constituting gross negligence or willful misconduct on the
part of such Indemnified Party), and will reimburse the Indemnified
Party for any legal or other expenses reasonably incurred by him or her
in connection with investigating or defending against any such loss,
claim, damage, liability or action.
(b) Actions. Promptly after receipt by the Indemnified Party
under Section 3.02(a) herein of notice of the commencement of any
action or proceeding with respect to any loss, claim, damage or
liability against which the Indemnified Party believes he or she is
indemnified under Section 3.02(a), the Indemnified Party shall, if a
claim with respect thereto is to be made against the Indemnifying Party
under such Section, notify the Indemnifying Party in writing of the
commencement thereof; provided, however, that the omission so to notify
the Indemnifying Party shall not relieve it from any liability which it
may have to the Indemnified Party to the extent the Indemnifying Party
is not prejudiced by such omission. If any such action or proceeding
shall be brought against the Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party
shall be entitled to participate therein, and, to the extent that it
shall wish, to assume the defense thereof, with counsel reasonably
satisfactory to the Indemnified Party, and, after notice from the
Indemnifying Party to the Indemnified Party of its election to assume
the defense thereof, the Indemnifying Party shall not be liable to such
Indemnified Party under Section 3.02(a) for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation or
reasonable expenses of actions taken at the written request of the
Indemnifying Party. The Indemnifying Party shall not be liable for any
compromise or settlement of any such action or proceeding effected
without its consent, which consent will not be unreasonably withheld.
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ARTICLE IV
DEFERRED COMPENSATION
Section 4.01. Initial Elections by Participants. Any Director of the
Company may at any time elect to participate in the Plan and to have all, or
such percentage as he may specify, of the Compensation otherwise payable to him
as a Director deferred and paid to him after his Deferral Termination Date at
the time and in the manner prescribed in Section 5.02 or Section 6.05. Such
election shall be made by notice in writing delivered to the Administrator and
shall be applicable only with respect to Compensation earned after the end of
the Fiscal Quarter in which such election is made and prior to the earlier of
the effective date of a further election pursuant to Section 4.02 herein or such
Participant's Deferral Termination Date. At the time of making such initial
election hereunder, a Director shall specify the portion, if any, of such
Deferred Compensation which will be (i) held subject to the interest payment
provisions of ARTICLE V hereof or (ii) translated into Stock Equivalents in
accordance with ARTICLE VI hereof.
Section 4.02. Subsequent Elections by Participants. Subsequent to the
initial election by a Participant provided for in Section 4.01, a Participant
may at any time make a subsequent election in like manner to increase or
decrease the percentage of his Compensation to be deferred pursuant to the Plan
and to elect the portion of such Deferred Compensation and any Plan Earnings to
be (i) held subject to the interest payment provisions of ARTICLE V hereof or
(ii) translated into Stock Equivalents in accordance with ARTICLE VI hereof. Any
such election shall be effective as of the first day of the Fiscal Quarter
following the Fiscal Quarter in which such election is made. Notwithstanding
anything to the contrary herein, no such subsequent election shall effect a
transfer of any amount credited, as of the first day of such Fiscal Quarter, to
either the Deferred Compensation Account or the Stock Equivalents Account from
such account to the other account.
Section 4.03. Establishment of Deferred Compensation Accounts and Stock
Equivalents Accounts. There shall be established for each Participant an account
to be designated as such Participant's Deferred Compensation Account and, where
appropriate, an account to be designated as such Participant's Stock Equivalents
Account.
Section 4.04. Allocations to Accounts. Any Deferred Compensation and
any Plan Earnings earned by a Participant during a Fiscal Quarter shall be
credited to the Deferred Compensation Account of such Participant on the date
any such amount is earned. As of the end of such Fiscal Quarter, there shall be
deducted from such Participant's Deferred Compensation Account an amount
necessary to satisfy such Participant's specification, if any, pursuant to
Section 4.01 or 4.02 herein, of the portion of such Deferred Compensation and
Plan Earnings to be allocated to such Participant's Stock Equivalents Account in
accordance with Section 6.01 herein.
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ARTICLE V
DEFERRED COMPENSATION SUBJECT TO INTEREST
Section 5.01. Interest on Deferred Compensation Accounts. A
Participant's Deferred Compensation Account shall be credited as of the end of
each Fiscal Quarter with an amount equivalent to interest for the number of days
in such quarter (based on a fiscal year of 365 days) at Citibank, N.A.'s prime
rate for major corporate borrowers in effect on the first day of such Fiscal
Quarter applied to the balance of such account at the beginning of such Fiscal
Quarter. (No amount credited to a Participant's Deferred Compensation Account
subsequent to the beginning of a Fiscal Quarter shall bear interest during that
Fiscal Quarter.) Interest credited to a Participant's Deferred Compensation
Account shall be held in such account subject to the provisions of Section 4.04
herein.
Section 5.02. Distribution of Deferred Compensation Accounts Subject to
Interest. When a Participant's Deferral Termination Date shall occur, the
balance standing in such Participant's Deferred Compensation Account at the end
of the Fiscal Quarter in which such date occurs (after crediting interest
thereto in accordance with Section 5.01 herein) shall be distributed to such
Participant in one of the following alternative forms, as determined by the
Committee in its sole discretion:
(a) a single lump-sum payment;
(b) five equal annual installments; or
(c) ten equal annual installments.
Until payment is made, interest shall continue to accrue in the manner
provided in Section 5.01. All Plan Earnings accrued to the date of payment of
any lump-sum or annual installment shall be paid in conjunction with such
payment. The lump-sum payment or the initial annual installment shall be
distributed on the last business day of January next following the close of the
calendar year in which the Participant's Deferral Termination Date occurs. The
remaining installments, if any, shall be distributed at annual intervals
thereafter.
If a Participant's Deferral Termination Date shall occur by reason of
his death or if he shall die after his Deferral Termination Date, but prior to
receipt of all distributions provided for in this Section, all cash
distributable hereunder shall be distributed in a lump sum to such Participant's
estate or personal representative as soon as administratively feasible following
such Participant's death.
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ARTICLE VI
STOCK EQUIVALENTS
Section 6.01. Stock Equivalents Accounts. The number of Stock
Equivalents, or fractions thereof, to be credited to a Participant's Stock
Equivalents Account in accordance with Section 4.04 shall be determined by
dividing the amount of Deferred Compensation and Plan Earnings to be allocated
to such account pursuant to the Participant's specifications given in accordance
with Article IV by the Market Price of the Company's common stock on the trading
day next preceding the last business day of the Fiscal Quarter specified in
Section 4.04. The number of Stock Equivalents, so determined, shall be credited
to the Stock Equivalents Account established for the Participant.
Section 6.02. Cash and Property Dividend Credits. Additional credits
shall be made to a Participant's Deferred Compensation Account throughout the
period of such Participant's participation in the Plan, and thereafter until all
distributions to which the Participant is entitled under Section 6.05 or ARTICLE
VIII shall have been made, in amounts equal to the Plan Earnings consisting of
the cash or fair market value of any dividends or distributions declared and
made with respect to the Company's common stock payable in cash, securities
issued by the Company (other than the Company's common stock but including any
such securities convertible into the Company's common stock) or other property
which the Participant would have received from time to time had he been the
owner on the record dates for the payment of such dividends of the number of
shares of the Company's common stock equal to the number of Stock Equivalents in
his Stock Equivalents Account on such dates. Each such credit shall be effected
as of the payment date for such dividend or distribution. Each and every amount
so credited to a Participant's Deferred Compensation Account shall be held in
such account subject to the provisions of Section 4.04 herein.
Section 6.03. Stock Dividend Credits. Additional credits shall be made
to a Participant's Stock Equivalents Account throughout the period of his
participation in the Plan, and thereafter until all distributions to which the
Participant is entitled under Section 6.05 or ARTICLE VIII shall have been made,
of a number of Stock Equivalents equal to the number of shares (including
fractional shares) of the Company's common stock to which the Participant would
have been entitled from time to time as common stock dividends had such
Participant been the owner on the record dates for the payments of such stock
dividends of the number of shares of the Company's common stock equal to the
number of Stock Equivalents credited to his Stock Equivalents Account on such
dates. Such additional credits shall be effected as of the end of the Fiscal
Quarter in which payment of such stock dividend is made.
Section 6.04. Recapitalization. If, as a result of a split or
combination of the Company's outstanding common stock or other recapitalization
or reorganization, the number of shares of the Company's outstanding common
stock is increased or decreased or all or a portion of the Company's outstanding
common stock is exchanged for or converted into other securities issued by the
Company (including without limitation securities convertible into the Company's
common stock) or other property, the number of Stock Equivalents credited to a
Participant's Stock Equivalents Account shall, to the extent reasonably
practicable, be equitably adjusted to give effect to such recapitalization or
reorganization (taking into account the fair market value of any securities or
other property for which the Company's common stock was exchanged or into which
it was converted) as if the Participant had owned of record on the effective
date of such recapitalization or reorganization a number of shares of the
Company's common stock equal to the number of Stock Equivalents credited to his
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Stock Equivalents Account immediately prior thereto. To the extent that any such
adjustment is not reasonably practicable, the Board of Directors shall give
consideration to amending the Plan pursuant to ARTICLE IX in order to give
effect to the purpose of the Plan and, if no such amendments can be effected or
are considered desirable, to terminating the Plan pursuant to ARTICLE VIII.
Section 6.05. Distributions from Stock Equivalent Account After
Participant's Deferral Termination Date. When a Participant's Deferral
Termination Date shall occur, the Company shall become obligated to make the
distributions prescribed in paragraphs (a) and (b) below. At the time of any
distribution, each Stock Equivalent to be distributed shall be converted into
one share of the Company's common stock and such share shall be distributed to
the Participant. Any fraction of a Stock Equivalent to be distributed shall be
converted into an amount in cash equal to the Market Price of one share of the
Company's common stock on the trading day next preceding the date of
distribution multiplied by such fraction and such cash shall be distributed to
the Participant.
(a) Distribution shall be made in one of the following
alternative forms, as determined by the Committee in its sole
discretion:
(i) a single lump-sum distribution;
(ii) five equal annual installments; or
(iii) ten equal annual installments.
Until payment is made, Plan Earnings shall continue to be credited in the
manner provided in Section 6.02. All Plan Earnings accrued to the date of any
lump-sum distribution or annual installment shall be paid in conjunction with
such payment. The lump-sum or the initial annual installment shall be
distributed on the last business day of January next following the close of
the calendar year in which the Participant's Deferral Termination Date occurs.
The remaining installments, if any, shall be distributed at annual intervals
thereafter.
(b) If a Participant's Deferral Termination Date shall occur
by reason of his death or if he shall die after his Deferral
Termination Date but prior to receipt of all distributions provided for
in this Section, all Stock Equivalents, or the undistributed balance
thereof, shall be distributed to such Participant's estate or personal
representative as soon as administratively feasible following such
Participant's death.
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ARTICLE VII
NATURE OF PLAN
The adoption of this Plan and any setting aside of amounts by the
Company with which to discharge its obligations hereunder shall not be deemed to
create a trust. Legal and equitable title to any funds so set aside shall remain
in the Company, and any recipient of benefits hereunder shall have no security
or other interest in such funds. Any and all funds so set aside shall remain
subject to the claims of the general creditors of the Company, present and
future. This provision shall not require the Company to set aside any funds, but
the Company may set aside such funds if it chooses to do so.
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ARTICLE VIII
TERMINATION OF THE PLAN
The Board of Directors may terminate the Plan at any time. Upon
termination of the Plan, distributions in respect of credits to Participants'
Deferred Compensation Accounts and Stock Equivalents Accounts as of the date of
termination shall be made in the manner and at the time prescribed in Section
5.02 or 6.05; provided, however, that the Board of Directors shall have the
right, by amendment of the Plan made in conjunction with such termination, to
cause distributions in respect of credits to Participants' Deferred Compensation
Accounts and Stock Equivalents Accounts as of the effective date of such
termination of the Plan to be made at such time and in such manner as it may
determine, including, but not limited to, distributions in equal annual
installments of five or ten years or in a lump sum; and further provided that
the value of the accounts on distribution shall be determined in a manner
consistent with the provisions of Section 5.02 and 6.05, as applicable.
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ARTICLE IX
AMENDMENT OF THE PLAN
The Board of Directors may, without the consent of Participants or
their beneficiaries, amend the Plan at any time and from time to time; provided,
however, that no amendment may deprive a Participant of the amounts allocated to
his or her Deferred Compensation Account or Stock Equivalents Account or be
retroactive in effect to the prejudice of any Participant.
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ARTICLE X
GENERAL PROVISIONS
Section 10.01. No Preference. No Participant shall have any preference
over the general creditors of the Company in the event of the Company's
insolvency.
Section 10.02. Authorized Payments.
(a) If the Committee receives evidence satisfactory to it that
any person entitled to receive a periodic payment hereunder is, at the
time the benefit is payable, physically, mentally or legally
incompetent to receive such payment and to give a valid receipt
therefor, and that an individual or institution is then maintaining or
has custody of such person and that no guardian, committee or other
representative of the estate of such person has been duly appointed,
the Committee may direct that such periodic payment or portion thereof
be paid to such individual or institution maintaining or having custody
of such person, and the receipt of such individual or institution shall
be valid and a complete discharge for the payment of such benefit.
(b) Payments to be made hereunder may, at the written request
of the Participant, be made to a bank account designated by such
Participant, provided that deposits to the credit of such Participant
in any bank or trust company shall be deemed payment into his hands.
(c) Notwithstanding any other provisions of the Plan, if any
amounts payable under the Plan are found in a "determination" (within
the meaning of Section 1313(a) of the Internal Revenue Code of 1986) to
have been includible in gross income of a Participant prior to payment
of such amounts hereunder, such amounts shall be paid to such
Participant as soon as practicable after the Committee is advised of
such determination. For purposes of this paragraph, the Committee shall
be entitled to rely on an affidavit by a Participant and a copy of the
determination to the effect that a determination described in the
preceding sentence has occurred.
Section 10.03. Gender Words. Wherever any words are used herein in the
masculine, feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so apply, and
whenever any words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases where
they would so apply.
Section 10.04. Assignment of Benefits. Benefits provided under the Plan
may not be assigned or alienated, either voluntarily or involuntarily, other
than by will or the applicable laws of descent and distribution.
Section 10.05. Conflicts of Laws. THE LAWS OF THE STATE OF TEXAS SHALL
CONTROL THE INTERPRETATION AND PERFORMANCE OF THE TERMS OF THE PLAN. THE PLAN IS
NOT INTENDED TO QUALIFY UNDER SECTION 401(a) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, OR TO COMPLY WITH THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED.
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ARTICLE XI
EFFECTIVE DATE
This amendment and restatement of the Plan shall be effective as of
October 22, 2002, and shall continue in force during subsequent years unless
amended or revoked by action of the Board of Directors.
HALLIBURTON COMPANY
By /s/ David J. Lesar
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David J. Lesar
Chairman of the Board, President and
Chief Executive Officer
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