Severance Agreement - Halliburton Co. and Dale P. Jones
September 29, 1998
Mr. Dale P. Jones
Vice Chairman
Halliburton Company
500 North Akard Street
3600 Lincoln Plaza
Dallas, TX 75201
Dear Dale:
You have announced your intention to take early retirement from the
employ of the Company on October 2, 1998 and to resign as a Director of the
Company on the earlier of October 2, 1998 or the effective date of the Dresser
merger. We appreciate your more than 33 years of loyal and dedicated service to
the Company. I especially appreciate the counsel and support you have given to
me over the past three years since I joined the Company.
Our discussions have included the terms of certain consulting services
to be performed by you following your retirement and your forbearance from
taking certain actions, all as more particularly set forth below. As used in
succeeding paragraphs of this agreement, the "Company" means Halliburton
Company. It is our mutual understanding that the terms of agreement are as
hereinafter set forth.
I
EARLY RETIREMENT
A. Retirement. On October 2, 1998, you will retire from the service of
the Company and will voluntarily resign as an officer of the Company and from
all other positions, posts, offices and assignments with the Company or any of
the Company's affiliates, including, but not limited to, your service as a
member of the Executive Committee and as a Trustee of the Halliburton
Foundation, Inc. You will also voluntarily resign as a member of the Company's
Board of Directors on the earlier to occur of October 2, 1998 or the closing
date of the merger transaction with Dresser Industries, Inc.
Your salary will continue through your retirement date at the present
rate per month, payable twice monthly following performance of service. You will
also be paid your accrued vacation through such date. All such payments shall be
less customary withholding for taxes and applicable deductions, and shall be
subject to any elections under the Halliburton Elective Deferral Plan (the
<PAGE>
2
"Elective Deferral Plan"). You agree that, within 5 business days after your
retirement date, you will vacate your office space at 3600 Lincoln Plaza.
B. Senior Executives' Deferred Compensation Plan. On December 31, 1998
your Deferred Compensation Account ("SERP Account") in the Senior Executives'
Deferred Compensation Plan (the "Deferred Compensation Plan") will be credited
with $500,000 in supplemental retirement benefits for the 1998 plan year. The
applicable accounts under such Plan will also be credited for such period with
amounts equal to (i) reductions in contributions to which you would be entitled
under the Halliburton Profit Sharing and Savings Plan by reason of the
limitations imposed under the Internal Revenue Code or by reason of elective
deferrals under the Elective Deferral Plan, ("ERISA Offset Account") and (ii)
interest earned on account balances in accordance with the provisions of such
Plan. Upon approval of the administrative committee appointed to administer the
Deferred Compensation Plan, you will receive the amounts in your accounts in
monthly installments over a 24-month period commencing after the 1998
allocations to your SERP and ERISA Offset Accounts have been made.
C. Annual Performance Pay Plan. The amount of any Reward earned under
the Halliburton Annual Performance Pay Plan ("Performance Pay Plan") for the
1998 Plan Year shall be prorated through the date of your retirement and paid in
accordance with the applicable provisions of such Plan. Any adjustments made by
the Compensation Committee of Directors to the performance goals previously
established by such Committee for the 1998 Plan Year will be applicable to the
calculation of your Reward for such Plan Year. You will also receive the unpaid
amounts of any Rewards for prior Plan Years which will be paid as provided under
the Plan. Such payments will be subject to any elections under the Elective
Deferral Plan and customary withholding for taxes.
D. Vesting of Restricted Stock. Effective with your retirement and on
such date, restrictions on shares of Common Stock issued to you under the
Halliburton Company Career Executive Incentive Stock Plan and the Halliburton
Company 1993 Stock and Long-Term Incentive Plan (the "1993 Plan") which have not
theretofore lapsed will lapse in their entirety.
E. Vesting of Stock Options. Your stock options granted under the 1993
Plan will vest in accordance with the terms of your respective stock option
agreements. To the extent that, after the date of your retirement, the
Compensation Committee of Directors approves any changes to outstanding stock
options applicable to your stock option grants such option grants will be
amended to reflect any such changes or, if amendment thereof is not legally or
administratively feasible, you will receive a cash payment in an amount
reasonably determined to be the present value of such change as it relates to
your outstanding stock options.
F. Retiree Medical Plan. You will be eligible to participate in the
Halliburton Retiree Medical Plan under the same terms and conditions as other
Company early retirees.
G. Other Benefit Programs. Payments, benefits or accruals set forth
in paragraphs A through F above are in addition to any payments, benefits or
<PAGE>
3
accruals to which you may be entitled under the Halliburton Profit Sharing
and Savings Plan, the Halliburton Retirement Plan, the Elective Deferral Plan
and any welfare benefit plans in accordance with their respective terms.
II
CONSULTING SERVICES FOR THE COMPANY AND ITS AFFILIATES
A. Consultation and Business Promotion. During the period beginning
October 2, 1998 through September 30, 2000 ("Consulting Period"), you will be
retained as a consultant to the Company and its affiliates. You will, during the
Consulting Period, fulfill all of your prior customer commitments and, as
reasonably requested by the Chief Executive Officer of the Company, aid in
business promotion, cooperate in customer entertainment, assist with respect to
special problems or projects and consult with and advise the Chief Executive
Officer of the Company or other members of management of the Company and its
business units in your particular areas of expertise. In assisting the Company
and the aforesaid units, you will not be required to devote more than one-third
of your time thereto, although travel outside Texas may be required. Your status
while performing duties hereunder will be that of an independent contractor and
not that of a Company employee.
B. Furtherance of Company Interests. During the Consulting Period, you
will use your best efforts to enhance the image of the Company, its business
units and their respective managements (provided that such efforts, when
combined with the services specified in paragraph A of this Section II do not
require you to devote more than one-third of your time thereto) and to refrain
from taking any action or making any statements inconsistent therewith.
C. Entering Into Competition and Conflicts of Interest. Without the
prior written approval of the Chief Executive Officer of the Company, you will
not, during the Consulting Period, accept payment from, be employed by, become
an officer, director, partner, principal, employee or consultant to or have a
substantial equity ownership in, any corporation, partnership or business in
competition with the Company or any of its affiliated companies. Once granted,
any such approval may be subsequently withdrawn if (i) it is determined by the
Chief Executive Officer of the Company, in his sole discretion, that the nature
of your relationship with such competitor is in conflict with the Company's or
any of its affiliates' interests; (ii) you are notified in writing of such
determination and (iii) you do not immediately following receipt of such notice
terminate your relationship with such competitor. Upon withdrawal of such
approval, the Company's obligation to pay consulting fees as set forth in
paragraph E below will terminate. Because of the nature and scope of your duties
with the Company during your employment, we have agreed that it is necessary and
reasonable for the prohibition set forth in the first sentence of this paragraph
to be applied nationwide. After the end of the Consulting Period, you may engage
in the prohibited activities described in this paragraph to the extent that such
activities are consistent with your remaining obligations under paragraph D of
Section II of this agreement. The purchase by you, directly or indirectly, for
investment of the publicly traded stock of a competitor of the Company or any of
its affiliates representing not more than one percent (1%) of the total
outstanding stock of such competitor or the holding thereof will not be deemed
<PAGE>
4
to constitute the acquisition or holding of a substantial equity ownership in
such competitor for the purposes of this paragraph.
D. Confidential Information. You will not at any time after your
retirement, without prior written approval of the Chief Executive Officer of the
Company, disclose to any unauthorized person or competitor any confidential
information or confidential knowledge as to the business and affairs of the
Company or any of its affiliates which you have received during the course of
your employment with the Company or which you may receive in the course of
consulting or advising hereunder.
E. Consulting Fees. In consideration of the foregoing but expressly
subject to the provisions of paragraph F below, during the Consulting Period,
you will receive consulting fees in monthly payments of $20,834 on the last
business day in the month for which payment is to be made.
F. Conditions Precedent to Payment of Consulting Fees; Death.
Notwithstanding anything to the contrary contained in this agreement, payment of
consulting fees pursuant to paragraph E of this Section will be made only if the
conditions set forth in paragraphs A, B, C and D of this Section are fully
satisfied at the time the payment is payable. Should you become disabled and,
therefore, be unable to devote up to one-third of your time to the performance
of consulting services as you may be required to perform pursuant to paragraph A
of this Section and such disability shall continue for a three-month period, the
Company's obligation to pay consulting fees as set forth in paragraph E of this
Section will terminate at the end of such three-month period.
If during the Consulting Period, you should die, any amounts of
consulting fees then unpaid for any period of time prior to your death, will be
paid to your estate or personal representative, plus the amount of any unpaid
expenses.
G. Participation in Other Benefit Programs. Payments to be received
pursuant to Paragraph E of this Section II are in addition to any payments which
you may be receiving or which you are entitled to receive under the Deferred
Compensation Plan, the Halliburton Profit Sharing and Savings Plan, the
Halliburton Retirement Plan, the Elective Deferral Plan and the Performance Pay
Plan.
H. Office Space, Secretarial Support, Club Memberships, Expenses, Etc.
During the Consulting Period and expressly contingent on your not being in
breach of any of the conditions specified in paragraphs A, B, C and D of this
Section II, you will be entitled to:
1. $1,750 per month as an allowance for office space and part-time
secretarial support.
2. Office furnishings and equipment (including computer equipment
for access to the Company's network).
3. Retention, at the Company's expense, of memberships in the
Dallas Country Club and the Dallas Petroleum Club.
<PAGE>
5
4. During each 12-month period, one customer trip to the Company's
facilities at Duck Key, Florida, and one hunting trip for
Company customers.
5. Reimbursement for reasonable and necessary travel,
entertainment and office expenses which you incur in
performance of the duties specified in paragraph A of this
Section promptly following your submission to the Company of an
appropriately documented expense claim.
III
RELEASE
A. Representation. You represent, warrant and agree that you have not
filed any claims, appeals, complaints, charges or lawsuits against the Company,
its affiliates or any of their respective employees, officers, directors,
shareholders, agents and representatives (collectively, the "Halliburton
Parties") with any governmental agency or court and that you will not file or
permit to be filed or accept benefit from any claim, complaint or petition filed
with any court by you or on your behalf at any time hereafter; provided,
however, this shall not limit you from filing an action for the sole purpose of
enforcing your rights under this agreement. Further, you represent and warrant
that no other person or entity has any interest in, or assignment of, any claims
or causes of action you may have against any Halliburton Party and which you now
release in their entirety.
B. Release. You agree to release, acquit and discharge and do hereby
release, acquit and discharge the Company, its affiliates, and all Halliburton
Parties, collectively and individually, from any and all claims and from any and
all causes of action, of any kind or character, whether now known or not known,
you may have against any of them, including, but not limited to, (i) any claim
for benefits, compensation, remuneration, salary, or wages, and the costs,
damages and expenses related thereto; and (ii) all claims or causes of action
arising from your employment, termination of employment, or any alleged
discriminatory employment practices, including but not limited to any and all
claims or causes of action arising under the Age Discrimination in Employment
Act, as amended ("ADEA"), 29 U.S.C. ss. 621, et seq. and any and all claims or
causes of action arising under any other federal, state or local laws pertaining
to discrimination in employment or equal employment opportunity; except that the
parties agree that your release, acquittal and discharge shall not relieve the
Company from its obligations under this agreement. This release also applies to
any claims or causes of action of the types specified in clauses (i) and (ii)
above which are brought by any person or agency or class action under which you
may have a right or benefit.
IV
GENERAL PROVISIONS
A. Non-assignability. This agreement shall be binding upon and inure to
the benefit of the respective successors in interests of the parties hereto.
<PAGE>
6
Notwithstanding the foregoing, the rights to receive payments hereunder pursuant
to Section II hereof are hereby expressly declared to be personal,
non-assignable and non-transferable except by will or intestacy, and in the
event of any attempted assignment or transfer of any such rights contrary to the
provisions hereof, the Company will have no further liability for payments with
respect thereto hereunder.
B. Injunctive and Other Relief. You recognize that the services to be
rendered hereunder are unique and that in the event of your breach of the
conditions to be performed by you under paragraphs A and B of Section II hereof
or in the event that you take such actions as are prohibited hereunder in
paragraphs C and D of such Section, the Company will be entitled, if it so
elects, to institute and prosecute proceedings in any court of competent
jurisdiction, in law or in equity, to obtain damages for any breach of this
agreement or to enforce the specific performance thereof or to enjoin you from
taking the actions prohibited in paragraphs C and D of Section II hereof.
C. Governing Law and Amendment. This letter contains the entire
agreement between the parties and will be governed under the laws of the State
of Texas. It may not be amended orally, but only by agreement in writing signed
by each of the parties.
If you agree that the above constitutes our understanding relating to
your retirement and the performance of consulting services during the Consulting
Period, please so indicate by dating and signing both duplicate originals of
this letter and return one duplicate original to me.
Very truly yours,
/s/ Dick Cheney
ACCEPTED AND AGREED TO:
/s/ Dale P. Jones
--------------------------
Dale P. Jones
Dated: 9/29/98
--------------------