Executive Employment Agreement - Halliburton Co. and Donald C. Vaughn
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement"), including the
attached Exhibit "A", 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 Donald C. Vaughn, an individual
currently residing at 6119 Glendora, Dallas, Texas 75230 ("Employee"), to be
effective on the later of the date of execution of this Agreement by the parties
hereto or the effective date of the merger between Halliburton N.C., Inc. and
Dresser Industries, Inc. (the "Merger") pursuant to the terms of that certain
Agreement and Plan of Merger (the "Merger Agreement") by and among Employer,
Halliburton N.C., Inc. and Dresser Industries, Inc. ("Dresser") dated February
25, 1998 (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
March 31, 2001 (the "Term"), subject to the terms and conditions of
this Agreement.
1.2 Beginning on the Effective Date, Employee shall be employed as Vice
Chairman 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. Employee shall at all times
comply with and be subject to such policies and procedures as Employer
may establish from time to time, including, without limitation, the
Halliburton Company Code of Business Conduct.
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. 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
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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
unaffiliated corporations of his choice. 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 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.
ARTICLE 2: COMPENSATION AND BENEFITS
2.1 Employee's base salary during the Term shall be payable at the rate of
not less than $600,000.00 per annum which shall be paid in accordance
with the Employer's standard payroll practice for its executives.
Employee's base salary may be increased from time to time during the
Term in a manner similar to that used to establish the base salary of
other members of the Executive Committee of Employer, with the approval
of the Compensation Committee of Employer's Board of Directors. Such
increased base salary shall become the minimum base salary under this
Agreement and may not be decreased during the Term.
2.2 Employee shall be entitled to receive the bonus earned under the
Dresser 1998 Executive Incentive Compensation Plan (the "Dresser EVA
Plan") for its fiscal year ended October 31, 1998, based upon the
actual level of attainment of Dresser's established performance targets
for the period ended October 31, 1998 or, if the actual level of
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performance cannot be determined, a reasonable estimate thereof,
provided he remains employed by the Employer during the entirety of
such period. Such bonus shall be payable by Dresser in a single lump
sum payment as soon as practicable following October 31, 1998. For the
period November 1, 1998 through December 31, 1998, Employee shall be
entitled to a bonus in an amount determined as follows: (i) Employee's
base salary shall be multiplied by the same percentage of base salary
as used in the calculation of Employee's bonus earned under the Dresser
EVA Plan for the period ended October 31, 1998 and (ii) the product
thereof shall be multiplied by two-twelfths (2/12). Beginning January
1, 1999 and for the remainder of the Term, Employee shall participate
in Employer's Annual Performance Pay Plan, or any successor annual
incentive plan approved by the Compensation Committee of Employer's
Board of Directors (the "CVA Plan"); provided, however, that if the
bonus amount earned by Employee for any plan year during the Term is
less than the average of bonus amounts earned by Employee under the
Dresser EVA Plan or the predecessor annual incentive plan for the
fiscal years ended October 31, 1997 and 1998 (the "Average Dresser
Bonus"), Employer shall pay to Employee an additional cash bonus equal
to the difference. For plan year 2000, the CVA Plan bonus earned shall
be prorated through the last day of the Term and the Average Dresser
bonus shall likewise be prorated through such period for the purpose of
determining whether or not an additional bonus is payable.
2.3 During the Term, Employee shall participate in the Halliburton Company
1993 Stock and Long-Term Incentive Plan, or any successor stock-related
plan adopted by Employer's Board of Directors, in the same grant cycle
for awards under such plan as the other members of Employer's Executive
Committee.
2.4 Employer shall, as of the effective time of the Merger, adopt Dresser's
Supplemental Executive Retirement Plan, with such amendments thereto as
may be necessary or appropriate to reflect the Merger and the
applicable provisions of Section 7.09 of the Merger Agreement, and
Employee shall continue to participate in such plan in accordance with
its terms, as such may be revised.
2.5 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 and civic associations and
societies of which Employee's participation is in the best interest of
Employer.
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2.6 While employed by Employer, Employee shall be allowed to participate,
on the same basis generally as other executive 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 and
non-qualified retirement plans. Except as specifically provided herein,
nothing in this Agreement is to be construed or interpreted to increase
or alter in any way the 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.
2.7 Except for the programs and/or plans provided in Sections 2.1, 2.2 and
2.9 herein, 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.
2.8 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.
2.9 Employer has assumed certain obligations with respect to certain plans
and programs of Dresser pursuant to Section 7.09 of the Merger
Agreement. With respect to Employee, such plans and programs include
the following:
a. Exhibit A hereto sets forth the Dresser stock options and
tandem restricted shares held by Employee as of May 12,
1998. Employer acknowledges its obligations to assume the
Dresser stock options and the Dresser stock plans as, and to
the extent provided, under Section 7.09 of the Merger
Agreement and to issue upon exercise of outstanding stock
options shares of Employer common stock on a one-to-one ratio
(adjusted pursuant to Section 3.01(a)of the Merger Agreement,
if applicable) in accordance with the terms of the Dresser
stock plans and the underlying stock option agreements. As of
the Effective Date, Employee shall continue to be entitled to
all his stock option and tandem restricted share rights under
outstanding stock options held by Employee prior to the
Effective Date.
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b. Employee has 55,109 stock units in Dresser's Deferred
Compensation Plan, and Employer hereby recognizes its
obligation to perform and pay out such compensation pursuant
to the terms of such plan.
c. Employee is a participant in Dresser's Performance Stock Unit
Program for the four (4) year cycles FY 1994 - 1997 and FY
1996 - 1999. Employer hereby recognizes its obligation to pay
and perform under such plan pursuant to its terms with such
reasonable estimates of the earnings and equity of Dresser for
the latter cycle as may be necessitated by the Merger.
Employer recognizes that the performance target for the FY
1996-1999 cycle of such plan is average Return on Equity of
15% or greater.
d. Employee is a participant in Dresser's Executive Life
Insurance Program. Employer acknowledges its obligations to
maintain such program for the benefit of Employee.
e. Employee is a participant in Dresser's Supplemental Executive
Retirement Plan. Employer hereby acknowledges its obligations
under Section 2.4 hereof and its obligations under Section
7.09 of the Merger Agreement to maintain such plan with
respect to Employee with the offset under such plan to take
into account any employer provided retirement benefits under
any plans or programs of Employer or any of its subsidiaries.
f. Employee is eligible for Dresser's Retiree Medical Benefit
Plan and Employer hereby acknowledges its obligations to
maintain such plan for the benefit of Employee, except to the
extent that any modifications thereto are consistent with
changes in the medical plans provided by Employer and its
subsidiaries for similarly situated active employees.
g. Employee is fully vested in the M. W. Kellogg Long-Term
Performance Plan and the M. W. Kellogg Retirement Plan.
Employer recognizes its obligation to Employee pursuant to
these plans.
2.10 Employee shall be eligible to participate in the Halliburton Elective
Deferral Plan of Employer.
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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 the
event of such permanent disability, Employee's employment and full
compensation and benefits shall be continued hereunder until the end of
the Term, with Employee's compensation during such period being reduced
by any Employer-financed disability benefits, (iii) at any time during
the Term by Employer upon notice to Employee or by Employee upon sixty
(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 and in
Section 3.1(ii). 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 payable under
Employer's plans for years prior to the year of Employee's termination
of employment, but shall not be entitled to any bonus or incentive
compensation for the year in which Employee's employment is terminated
or any other payments or benefits by or on behalf of Employer except
for those which may be payable pursuant to the terms of Dresser's or
Employer's employee benefit plans (as hereinafter defined), stock,
stock option, incentive compensation or deferred compensation plans or
the applicable agreements underlying such plans. 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
Employee's 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.
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3.3 If Employee's employment is terminated for any reason other than as
described in the first sentence of Section 3.2 above during the Term,
Employee shall nevertheless continue to receive his full compensation
(base salary and bonus) and benefits under this Agreement for the
duration of the Term. The amounts 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 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 amounts as a self-employed individual. If
Employee should die while receiving compensation and benefits pursuant
to this Section 3.3, such compensation and benefits shall be prorated
through the date of his death and paid to his estate, but all future
compensation and benefits shall cease and terminate as of the date of
Employee's death except for those which may be payable pursuant to the
terms of Dresser's or Employer's employee benefit plans (as hereinafter
defined), stock, stock option, incentive compensation or deferred
compensation plans or the applicable agreements underlying such plans.
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) or any of the benefits, plans or programs
provided for in Section 2.09 hereof maintained by Dresser or Employer
except that Employee shall not be entitled to any severance benefits
pursuant to any severance plan or program of 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.
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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 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,
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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 (12) 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:
(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
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(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 its
affiliates, 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 one (1) year 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 (i) participate in rendering such
advice, services or assistance to any such competing person,
association or entity, (ii) 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 (iii) 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 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 prepaid courier or by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Employer, 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.
6.3 This Agreement shall be governed in all respects by the laws of the
State of Texas, without regard to any conflict-of-law rule or
principle, unless preempted by federal law, in which case federal law
shall govern.
6.4 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.
6.5 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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6.6 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.
6.7 This Agreement replaces and merges any previous agreements and
discussions pertaining to the subject matter covered herein. Further,
this Agreement specifically replaces and terminates that certain
Employee Severance Agreement between Employee and Dresser dated
February 25, 1998. 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 to 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.
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HALLIBURTON COMPANY
By /s/ Richard B. Cheney
------------------------------
Richard B. Cheney
Chairman of the Board and
Chief Executive Officer
EMPLOYEE
By: /s/ D. C. Vaughn
-----------------------------
Name: Donald C. Vaughn
Date: 13 May 1998
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AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment dated as of September 29, 1998 ("Amendment") amends that
certain Executive Employment Agreement ("Agreement") entered into by and between
Halliburton Company ("Employer") and Donald C. Vaughn ("Employee"). Capitalized
terms used herein but not defined shall have the meanings ascribed to them in
the Agreement.
1. Section 1.1 of the Agreement is hereby amended to read in its
entirety as follows:
"1.1 The term of the Agreement is from the Effective Date
through March 31, 2001 (the "Term"). Employer agrees to employ
Employee, and Employee agrees to be employed by Employer,
subject to the terms and conditions of the Agreement;
provided, however, that from the Effective Date through
December 31, 1998, Employee shall remain an employee of
Dresser while performing his duties hereunder."
2. Section 2.3 of the Agreement is hereby amended by adding the
following sentence to the end of such Section:
"As of the Effective Date, Employer shall grant to Employee
under such Plan 50,000 shares of Employer's common stock
subject to the restriction and other terms and conditions set
forth in Exhibit B attached hereto."
3. No amendment, change or supplement of or to the Agreement is
intended hereby except for those expressly set forth herein and, as so expressly
amended, changed and supplemented, such Agreement shall continue in full force
and effect.
IN WITNESS WHEREOF, Employee and Employer have duly executed this
Amendment in multiple originals to be effective on the Effective Date.
HALLIBURTON COMPANY
By: /s/ Richard B. Cheney
-----------------------------
Richard B. Cheney
Chairman of the Board and
Chief Executive Officer
EMPLOYEE
/s/ D. C. Vaughn
---------------------------
Donald C. Vaughn
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Exhibit B to
Executive Employment Agreement
By and Between Donald C. Vaughn
and Halliburton Company
RESTRICTED STOCK AGREEMENT
AGREEMENT made as of the ___ day of _________, 1998, between
HALLIBURTON COMPANY, a Delaware corporation (the "Company"), and Donald C.
Vaughn ("Employee").
1. Award.
(a) Shares. Pursuant to the Halliburton Company 1993 Stock and
Long-Term Incentive Plan (the "Plan"), and the Executive Employment Agreement by
and between the Company and Employee, 50,000 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 or employing subsidiary for any reason
other than as provided in the last two sentences of subparagraph (b) of this
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<PAGE>
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.
(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:
Percentage of Total
Number of Restricted Shares
as to Which Forfeiture
Lapse Date Restrictions Lapse
---------- ---------------------------
First Anniversary of the
date of this Agreement 10%
Second Anniversary of the
date of this Agreement 10%
Third Anniversary of the
date of this Agreement 10%
Fourth Anniversary of the
date of this Agreement 10%
Fifth Anniversary of the
date of this Agreement 10%
Sixth Anniversary of the
date of this Agreement 10%
Seventh Anniversary of the
date of this Agreement 10%
Eighth Anniversary of the
date of this Agreement 10%
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<PAGE>
Ninth Anniversary of the
date of this Agreement 10%
Tenth Anniversary of the
date of this Agreement 10%
Notwithstanding the foregoing, 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), (ii) the date Employee's
employment with the Company is terminated by reason of death, disability (as
determined by the Company or employing subsidiary) or normal retirement on or
after age sixty-five or (iii) the date on which Employee shall become entitled
to the severance benefits set forth in Section 3.3 of that certain Executive
Employment Agreement by and between Employee and the Company. In the event
Employee's employment is terminated for any other reason, including retirement
prior to age sixty-five with the approval of the Company or employing
subsidiary, the Committee which administers the Plan (the "Committee") or its
delegate, as appropriate, may, in the Committee's or such delegate's sole
discretion, approve the lapse of Forfeiture Restrictions as to any or all
Restricted Shares still subject to such restrictions, such lapse to be effective
on the date of such approval or Employee's termination date, if later.
(c) 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 the
shares upon which Forfeiture Restrictions lapsed to be credited to a book-entry
account in Employee's name under the Company's direct registration system,
provided that a physical stock certificate representing such shares will be
issued upon request by Employee. 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.
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<PAGE>
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
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.
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, or its delegate, as appropriate, 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.
4
<PAGE>
8. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
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:
------------------------------
Name:
----------------------------
Title:
---------------------------
---------------------------------
Donald C. Vaughn
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<PAGE>
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.
6