Deferred Compensation Plan - Dresser Industries Inc.
DRESSER INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
As Amended and Restated
Effective January 1, 2000
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Table of Contents
I. PURPOSE OF PLAN..........................................................1
II. DEFINITIONS AND CONSTRUCTION.............................................1
2.1 Definitions........................................................1
2.2 Number and Gender..................................................3
2.3 Headings...........................................................3
2.4 Effect Upon Other Plans............................................3
III. ADMINISTRATION........................................................3
3.1 Administration by the Board; Right to Delegate.....................3
3.2 Required Vote; Meetings............................................3
3.3 Powers and Duties..................................................4
3.4 Unit Price.........................................................4
3.5 Expenses...........................................................4
IV. UNIT STOCK BENEFITS AND CASH BENEFITS.................................4
4.1 Dividend Equivalents on Unit Stock Benefits........................4
4.2 Interest on Cash Benefit...........................................5
4.3 Corporate Changes..................................................5
4.4 Unilateral Termination.............................................5
V. BENEFITS.................................................................5
5.1 Valuation..........................................................5
5.2 Conversion From Unit Stock Benefit to Cash Benefit.................5
5.3 Medium of Payment..................................................6
5.4 Election of Options................................................6
5.5 Payment of Dividend Equivalents and Interest.......................6
5.6 Death or Disability................................................7
5.7 To Whom Payments are Made..........................................7
5.8 Forfeiture.........................................................7
VI. MISCELLANEOUS.........................................................7
6.1 Elections..........................................................7
6.2 Reserves...........................................................7
6.3 Withholding........................................................7
6.4 Plan Not to Constitute Contract of Employment......................8
6.5 Nontransferability and Nonassignability............................8
6.6 Amendment, Suspension or Termination...............................8
6.7 Reliance Upon Information..........................................8
6.8 Governing Law......................................................9
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DRESSER INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
WHEREAS, Dresser Industries, Inc. (the "Company") established the
Dresser Industries, Inc. Deferred Compensation Plan, hereinafter referred to as
the "Plan," effective August 19, 1965, for the benefit of certain of its
employees;
WHEREAS, deferrals under the Plan have ceased and no new Participant
may join the Plan; and
WHEREAS, the Company desires to restate the Plan and to amend the Plan
in several respects, intending thereby to provide an uninterrupted and
continuing program of benefits;
NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of January 1, 2000, except as
otherwise indicated herein:
I. PURPOSE OF PLAN
The purposes of this Plan are to (i) provide greater incentive for
employees to attain and maintain the highest standards of performance; (ii)
retain employees of outstanding competence; (iii) further the identity of
interests of such employees with those of the Company's stockholders generally;
and (iv) reward such employees for outstanding performance.
II. DEFINITIONS AND CONSTRUCTION
2.1 Definitions. Where the following words and phrases are used in
this Plan, they shall have the respective meanings set forth below, unless the
context clearly indicates to the contrary:
(a) "Benefits" means the net, unforfeited amounts, including
Interest and Dividend Equivalents to be paid to a Participant (or the estate or
beneficiary of a Participant) under the Plan.
(b) "Benefit Payment Option" means one of the schedules
specifying the timing of the payment of a Participant's Benefit under the Plan
as set forth in Section 5.4 of the Plan.
(c) "Board" means the Board of Directors of Dresser Industries,
Inc.
(d) "Cash Benefit" means the amount credited in a dollar amount
under the Plan on behalf of a Participant as a result of such Participant's
Deferred Compensation and any Interest credited thereon.
(e) "Company" means Dresser Industries, Inc. and its wholly-owned
subsidiaries.
(f) "Crediting Date" means the January 15 next following the end
of the Fiscal Year for which the credit is awarded or, if such January 15 is not
a business day, the next business day.
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(g) "Deferred Compensation" means amounts deferred under the
terms of the Plan prior to the Effective Date.
(h) "Director" means a member of the Board.
(i) "Disability" means such an absence of physical or mental
powers in a Participant so as to render him incapable of competently performing
his duties for the Company.
(j) "Dividend Equivalent" means, with respect to a particular
Unit Stock Benefit, the sum of (i) the total amount of cash dividends that would
have been payable during the preceding calendar year on the shares of Unit Stock
under such Unit Stock Benefit had such shares been outstanding during the
preceding calendar year and (ii) any Dividend Equivalent with respect to such
Unit Stock Benefit carried forward from the preceding Crediting Date in
accordance with the terms of Section 4.1.
(k) "Effective Date" means January 1, 2000, as to this amendment
and restatement of the Plan, except that (i) the Benefit Payment Options
specified in Section 5.4 shall be applicable to Participants terminating
employment with the Company on or after January 1, 2001, with the Benefit
Payment Options applicable to Participants terminating employment prior to such
date being governed by the Plan as in effect prior to this amendment and
restatement, and (ii) the last sentence of Section 5.4 pertaining to cashing out
of small benefits shall be effective January 1, 2002. The original effective
date of the Plan was August 1, 1965.
(l) "Fiscal Year" means the fiscal year of the Company.
(m) "Interest" means simple interest credited on a Participant's
Cash Benefit as of each Crediting Date. The rate of Interest shall be based on
the annual savings account rate of a major bank as designated from time to time
by the Board as of the December 31 next preceding the applicable Crediting Date.
(n) "Participant" means an individual who is contingently
entitled to Benefits under the Plan. Participation in the Plan is available only
to an individual who was a Participant in the Plan on the Effective Date. No
other individuals shall be eligible to become Participants in the Plan.
(o) "Plan" means the Dresser Industries, Inc. Deferred
Compensation Plan adopted by the Board on August 1, 1965, as amended and
restated herein.
(p) "Unit Price" means, with respect to a Crediting Date, 75% of
the average of the daily closing prices of Unit Stock on the New York Stock
Exchange for the calendar month immediately prior to such Crediting Date, or
such higher percentage of such average as may be determined by the Board from
time to time, in accordance with the terms of Section 3.4; provided however,
that with respect to Unit Stock Benefits on behalf of a Participant who has
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terminated employment with the Company, 100% shall be substituted for the
foregoing percentage with respect to each Crediting Date after the Crediting
Date following such Participant's termination of employment.
(q) "Unit Stock" means shares of common stock of Halliburton
Company.
(r) "Unit Stock Benefit" means the number of shares of Unit Stock
credited on behalf of a Participant as a result of such Participants' Deferred
Compensation, and any Dividend Equivalents credited thereon.
2.2 Number and Gender. Wherever appropriate herein, words used in the
singular shall be considered to include the plural, and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in this Plan, shall be deemed to include the feminine gender.
2.3 Headings. The headings of Articles, Sections, and Paragraphs
herein are included solely for convenience. If there is any conflict between
such headings and the text of this Plan, the text shall control. All
references to Articles, Sections, and Paragraphs are to this Plan unless
otherwise indicated.
2.4 Effect Upon Other Plans. Except to the extent provided herein,
nothing in this Plan shall be construed to affect the provisions of any other
plan maintained by the Company.
III. ADMINISTRATION
3.1 Administration by the Board; Right to Delegate. This Plan shall
be administered by the Board. The Board may appoint committees, individuals, or
any other agents as it deems advisable and may delegate to any of such
appointees any or all of the powers and duties of the Board hereunder. In the
event the Board delegates any or all of its powers and duties under the
foregoing sentence, the Board may specify the manner in which such powers and
duties shall be performed.
3.2 Required Vote; Meetings. The Board shall adopt such rules and
procedures for the conduct of its business and for the administration of the
Plan as it deems advisable and shall have authority to take any and all action
necessary to implement such rules and procedures. A Director who is a
Participant may vote and take actions on all Board matters, including, without
limitation, matters that may directly affect such Director and matters that may
affect such Director in a manner differently from or inconsistently with other
Participants. All actions taken by the Board must be approved by an affirmative
vote of a majority of all Directors. The Board may take any action without a
meeting upon written consent signed by all of the Directors. Directors may
participate in a meeting by means of conference telephone or similar
communications equipment through which all participating persons can instantly
communicate with each other.
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3.3 Powers and Duties. The Board shall supervise the administration
and enforcement of this Plan according to the terms and provisions hereof and
shall have the sole discretionary authority and all of the powers necessary to
accomplish such duties. Without limiting the generality of the foregoing, the
Board shall have all of the powers and duties specified for it under the Plan,
including, without limitation, the power, right, or authority: (a) from time to
time to establish rules and procedures for the administration of the Plan which
are not inconsistent with the provisions of the Plan, and any such rules and
procedures shall be effective as if included in the Plan, (b) to construe in its
discretion all terms, provisions, conditions, and limitations of the Plan, (c)
to correct any defect or to supply any omission or to reconcile any
inconsistency that may appear in the Plan in such manner and to such extent as
the Board shall deem appropriate, (d) to make a determination in its discretion
as to the right of any person to a payment and the amount of such payment and to
prescribe procedures to be followed by distributees in obtaining such payment,
and (e) to make all other determinations necessary or advisable for the
administration of the Plan. All decisions, determinations, and actions made or
taken by the Board and its delegates with respect to the Plan and any Benefits
under the Plan shall be final, binding, and conclusive upon all persons and
shall not be subject to appeal. The Board and its delegates shall, in their sole
discretion exercised in good faith (which, for purposes of this Section 3.3,
shall mean the application of reasonable business judgment), make such decisions
or determinations and take such actions, and all such decisions, determinations,
and actions by the Board and its delegates shall be final, binding, and
conclusive upon all persons and shall not be subject to appeal. If a Participant
disagrees with any decision, determination, or action made or taken by the Board
or its delegates, then the dispute will be limited to whether the Board
satisfied their duty to make such decision or determination or take such action
in good faith.
3.4 Unit Price. From time to time, the Board may substitute any
percentage in excess of 75% for such figure in determining the Unit Price as set
forth in the definition of Unit Price herein; provided however, that any such
determination must be made prior to the end of the Fiscal Year immediately
preceding the Crediting Date to which such Unit Price shall apply.
3.5 Expenses. All expenses of the administration of the Plan shall be
borne by the Company.
IV. UNIT STOCK BENEFITS AND CASH BENEFITS
4.1 Dividend Equivalents on Unit Stock Benefits. On or before each
Crediting Date, there shall be ascertained (a) the balance of each Unit Stock
Benefit and (b) the Dividend Equivalent attributable to such Unit Stock Benefit
for the preceding calendar year. As of each Crediting Date, each Unit Stock
Benefit shall be credited with a whole number of shares of Unit Stock that is
equal to (x) the Dividend Equivalent determined under the foregoing sentence,
divided by (y) the applicable Unit Price; provided however, any fractional
shares shall be disregarded and the amount of any remaining Dividend Equivalent
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attributable to such fractional shares shall be carried forward and added to the
Dividend Equivalent calculated with respect to the next succeeding Crediting
Date.
4.2 Interest on Cash Benefit. As of each Crediting Date, the balance
of each Participant's Cash Benefit shall be credited with Interest.
4.3 Corporate Changes. If the Company at any time increases or
decreases proportionately to all holders of shares of its common stock then
outstanding, whether by stock dividend, stock split, consolidation of shares, or
in any other manner the number of all of its outstanding shares of such common
stock held by such holders, then all Unit Stock Benefits theretofore credited
and unforfeited shall be correspondingly increased or decreased with respect to
the number of shares of such common stock represented thereby. In the event of
a merger or consolidation of the Company with or into another corporation or the
sale of substantially all of the assets of the Company, the Board shall make an
appropriate equitable adjustment to all Unit Stock Benefits.
4.4 Unilateral Termination. Notwithstanding any other provision of
the Plan to the contrary, in the event a Participant's employment with the
Company is terminated by unilateral decision of such Participant, no Dividend
Equivalents or Interest shall be credited to any Unit Stock Benefits or Cash
Benefit on behalf of such Participant in respect of dividends paid or Interest
attributable to the period of time after such Participant's termination of
employment.
V. BENEFITS
5.1 Valuation. When it is necessary under the Plan to determine the
value on any date of shares of Unit Stock, the value shall be the product of
the number of shares of Unit Stock to be valued and the average of the daily
closing prices of a share of the Unit Stock on the New York Stock Exchange
during the preceding calendar month. The value of a Participant's Benefits on
any date shall be the sum of (a) the dollar amount of such Participant's Cash
Benefit and (b) the dollar value, as determined above, of any Benefits held in
shares of Unit Stock on behalf of such Participant under the Plan.
5.2 Conversion From Unit Stock Benefit to Cash Benefit. Prior to the
Effective Date, each Participant had the opportunity to elect the manner in
which his Unit Stock Benefit will be invested and paid following his termination
of employment, either (a) continuing an all Unit Stock Benefit, (b) converting
to an all Cash Benefit, or (c) continuing a specified percentage as a Unit Stock
Benefit with the remainder converting to a Cash Benefit. A Participant who did
not make such an election prior to the Effective Date shall be deemed to have
elected to have 50% of his Unit Stock Benefit converted to a Cash Benefit
following his termination of employment. Such election may be changed by a
Participant prior to his termination of employment with the Company by written
notice thereof filed with the Board; provided however, that such change can only
increase the percentage to be continued as a Unit Stock Benefit, but cannot
decrease such percentage. If a Participant has an election in effect to convert
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all or a percentage of his Unit Stock Benefit to a Cash Benefit, such conversion
shall occur on the Crediting Date next following the Participant's termination
of employment with the Company based on the applicable Unit Price for such
Crediting Date. Such conversion shall occur after the crediting of Dividend
Equivalents for such Crediting Date pursuant to Section 4.1. If less than all of
a Participant's Unit Stock Benefit is to be converted to a Cash Benefit, the
number of whole shares of Unit Stock to be converted shall be determined by
multiplying the total shares of Unit Stock credited to the Participant as of the
applicable Crediting Date by the percentage to be converted to a Cash Benefit
with any fraction of a share of Unit Stock resulting from such calculation to
remain as a Unit Stock Benefit.
5.3 Medium of Payment. All Cash Benefits under the Plan shall be paid
in cash. All Unit Stock Benefits under the Plan shall be paid in Unit Stock.
5.4 Election of Options. A Participant's Benefits shall be paid under
one or more of the Benefit Payment Options herein as timely elected by a
Participant; provided, however, that in the absence of a valid election, a
Participant's benefits shall be paid under Option A. Payment of a Participant's
Benefits, or a portion thereof, credited through the first Crediting Date
following the calendar year of a Participant's termination of employment with
the Company, shall commence as of the first Crediting Date following the
calendar year of the Participant's termination of employment and shall be paid
in equal annual installments over a period of time determined in accordance
with one of the following Benefit Payment Options:
Option A. Ten years, or
Option B. Five years, or
Option C. Fifteen years, or
Option D. Twenty years
as elected by such Participant. A Participant's payment election hereunder may
be made or revoked at any time or times prior to the termination of the
Participant's employment with the Company by written notice thereof filed with
the Board. The preceding notwithstanding, if, as of any Crediting Date following
a Participant's termination of employment with the Company, the value of such
Participant's Benefits is $50,000 or less, the Board, in its discretion, may
direct that such Benefits be paid in full as soon as administratively feasible
on or after such Crediting Date.
5.5 Payment of Dividend Equivalents and Interest. At the time of each
annual installment payment pursuant to each of the Benefit Options, Interest and
Dividend Equivalents shall be paid with respect to each Participant's unpaid and
unforfeited Unit Stock Benefits and Cash Benefits under the Plan since the
previous Crediting Date. The amount of such payments shall be calculated using
the methodology set forth in Section 4.1 and Section 4.2.
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5.6 Death or Disability. In the event of a Participant's death or
Disability, the Board may, in its sole discretion and upon proof of the
financial necessity of the person or persons to whom such Participant's Benefits
are payable, vary the number and amount of installments to be paid with respect
to such Benefits.
5.7 To Whom Payments are Made. Payments of a Participant's Benefits
shall be made to the Participant if living. Unless otherwise requested in
writing by Participant, in the event of a Participant's death, payments will be
made to the beneficiary designated by the Participant for the purpose of
receiving life insurance benefits under the Company's group life insurance plan.
In the event no beneficiary is designated by the Participant either in writing
or for the purpose of receiving such life insurance benefits, or if the
designated beneficiary does not survive the Participant, such Participant's
Benefits will be paid to his personal representatives or to the person appointed
by will to receive said Benefits. This provision does not affect the timing or
amount of payments to be made hereunder, but only affects to whom payments are
to be made.
5.8 Forfeiture. Notwithstanding any other provision herein to the
contrary, in the event a Participant takes or allows some action or omission
resulting in damage or competitive injury to the Company then, unless such
action or omission shall have been taken or allowed in good faith and without
reasonable cause to believe that it was improper or illegal, the Board may
terminate all subsequent crediting of Interest and Dividend Equivalents to the
Participant, and, in addition, the Board may terminate and forfeit all or any
part of such Participant's Benefits hereunder, or suspend payment of such
Benefits, as it may deem appropriate in its sole discretion and such
termination, forfeiture, and/or suspension shall be binding and not subject to
appeal.
VI. MISCELLANEOUS
6.1 Elections. The Board shall have the right to refuse to accept any
election made hereunder by a Participant but such refusal shall be made not
later than thirty (30) ays after the last date prescribed hereunder for making
such election. If for any reason the Board deems it advisable, it may require
any election hereunder to be made at a time earlier than that otherwise fixed in
the Plan.
6.2 Reserves. The Company shall be under no obligation to reserve,
segregate or earmark any cash, stock, or other property for the payment of any
Benefits under this Plan. No Participant shall have any right whatsoever in any
cash, stock or other property which may be set aside under the Plan.
6.3 Withholding. During the time a Participant is employed with the
Company, the Company shall deduct from such Participant's wages any amounts
required to be withheld by the Company with respect to the accrual of a
Participant's benefits hereunder. Further, there shall be deducted from each
payment of Participant's Benefits under the Plan any taxes required to be
withheld by the Company in respect of such payment. The Company shall have the
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right to reduce any payment to be made in cash or other property by the amount
of such cash or property sufficient to provide the amount of said taxes. In
lieu of a deduction, the Committee may permit the Participant to pay or
reimburse the Company for said taxes.
6.4 Plan Not to Constitute Contract of Employment. Neither the
adoption of the Plan nor its operation shall in any way affect the right of
the Company to dismiss or discharge a Participant at any time, nor give an
employee a right to participate in any incentive compensation plan of the
Company.
6.5 Nontransferability and Nonassignability. Except as hereinafter
provided, no rights under the Plan shall be assignable or transferable, or
subject to encumbrances, pledge, or charge of any nature, except that a
Participant may designate a beneficiary to receive such Participant's
Benefits upon Participant's death as otherwise provided herein. Plan
provisions to the contrary notwithstanding, (a) the Board shall comply with
the terms and provisions of an order that satisfies the requirements for a
"qualified domestic relations order" as such term is defined in section
206(d)(3)(B) of the Employee Retirement Income Security Act of 1974, as
amended, including an order that requires distributions to an alternate payee
prior to a Participant's "earliest retirement age" as such term is defined in
section 206(d)(3)(E)(ii) of such Act, and (b) no Benefits shall be payable
until and unless any and all amounts representing debts or other obligations
owed to the Company by the Participant with respect to whom such amount would
otherwise be payable shall have been fully paid.
6.6 Amendment, Suspension or Termination. The Board may amend,
suspend or terminate the Plan in whole or in part, except that no amendment,
suspension or termination shall reduce any Benefits credited to a Participant
prior to the date of such amendment, suspension, or termination, or Benefits to
be credited in the future based on amounts previously credited to a
Participant, provided, that any amendment to or change in the Plan adopted by
the Board which will significantly increase Benefits under the Plan or
substantially alter the general principles of the Plan shall not become
effective unless ratified by the affirmative votes of the holders of a majority
of the voting shares of the Company at an annual or a special meeting of the
shareholders called for such purpose.
6.7 Reliance Upon Information. The Board and its delegates may rely
upon any information supplied to them by an officer of the Company, the
Company's legal counsel or by the Company's independent public accountants in
connection with the administration of the Plan, and shall not be liable for any
decision or action in reliance thereon. No Participant, or any person claiming
through him shall have any right or interest in the Plan or any Benefits
hereunder unless and until all the terms, conditions, a provisions of the Plan
that affect such Participant or such other person shall have been complied with
as specified herein. The Participant shall complete such forms and furnish such
information as the Committee may require in the administration of the Plan.
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6.8 Governing Law. The place of administration of the Plan shall be
conclusively deemed to be within the State of Delaware; and the validity,
construction, interpretation and effect of the Plan and all rights of any and
all persons having or claiming any interest therein shall be governed by the
laws of the State of Delaware.
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