<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Halliburton Company
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF HALLIBURTON COMPANY APPEARS HERE]
March 26, 1996
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Halliburton Company which will be held on Tuesday, May 21, 1996, at 9:00 a.m.
in the Parisian Room of the Fairmont Hotel, 1717 N. Akard, Dallas, Texas 75201.
At the meeting, as set forth in the accompanying Notice of Annual Meeting and
Proxy Statement, stockholders are being asked to elect a Board of Directors of
ten Directors to serve for the coming year, to ratify the selection of Arthur
Andersen LLP as independent accountants to examine the financial statements and
books and records of the Company for 1996, and to act on a proposal to amend
the 1993 Stock and Long-Term Incentive Plan.
It is very important that your shares are represented and voted at the
meeting. Accordingly, please sign, date and return the enclosed proxy card
promptly. If you attend the meeting, you may vote in person even if you have
previously mailed a proxy card. We would appreciate your informing us on the
proxy card if you expect to attend the meeting so that we can provide adequate
seating accommodations.
The continuing interest of our stockholders in the business of the Company is
appreciated and we hope many of you will be able to attend the Annual Meeting.
Sincerely,
LOGO
Dick Cheney
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
[LOGO OF HALLIBURTON COMPANY APPEARS HERE]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1996
The Annual Meeting of Stockholders of HALLIBURTON COMPANY, a Delaware
corporation (the "Company"), will be held on Tuesday, May 21, 1996, at 9:00
a.m., in the Parisian Room of the Fairmont Hotel, 1717 N. Akard, Dallas, Texas
75201, to consider and act upon the matters discussed in the attached Proxy
Statement as follows:
1. To elect ten (10) Directors to serve for the ensuing year and until their
successors shall be elected and shall qualify.
2. To consider and act upon a proposal to ratify the appointment of Arthur
Andersen LLP as independent accountants to examine the financial
statements and books and records of the Company for the year 1996.
3. To consider and act on the proposal set forth on pages 22 through 27 of
the Proxy Statement to amend the 1993 Stock and Long-Term Incentive Plan.
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors has fixed Monday, March 25, 1996, at the close of
business, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting and at any adjournment thereof. A Proxy
Statement is attached and incorporated herein by reference.
By order of the Board of Directors,
LOGO
Susan S. Keith
Vice President and Secretary
March 26, 1996
----------------
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING REGARDLESS OF
THE NUMBER OF SHARES WHICH YOU HOLD. TO AVOID UNNECESSARY EXPENSES AND DELAY,
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. A RETURN
ENVELOPE IS ENCLOSED WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Halliburton Company (the "Company"). Execution of the proxy will
not in any way affect a stockholder's right to attend the Annual Meeting and
vote in person. Any stockholder giving a proxy has the power to revoke it at
any time before it is exercised by filing with the Secretary of the Company a
written revocation or duly executed proxy bearing a later date. The proxy will
be revoked if the stockholder is present at the Annual Meeting and elects to
vote in person.
The record date for determination of the stockholders entitled to vote at the
Annual Meeting is the close of business on March 25, 1996. The Company's Common
Stock, par value $2.50, is the only class of capital stock of the Company that
is outstanding. As of March 25, 1996, there were 114,783,265 shares of Common
Stock outstanding. Each of the outstanding shares of Common Stock is entitled
to one vote. A complete list of stockholders entitled to vote will be kept at
the Company's offices at the address specified on page 2 for ten days prior to
the Annual Meeting.
Shares will be voted in accordance with the stockholder's instructions in the
accompanying proxy on each matter submitted to stockholders. If no instructions
are given, the shares will be voted for the election of Directors, for
ratification of the selection of auditors and for the proposal.
Votes cast by proxy or in person at the Annual Meeting will be counted by the
persons appointed by the Company to act as election inspectors for the meeting.
In all matters other than the election of Directors, the affirmative vote of
the majority of shares present in person or represented by proxy at the meeting
and entitled to vote on the subject matter shall be the act of the
stockholders. Shares for which a holder has elected to abstain on a matter will
count for purposes of determining the presence of a quorum and for purposes of
determining the outcome of such matter.
In the election of Directors, shares present but not voting will be
disregarded (except for quorum purposes) and the candidates for election
receiving the highest number of affirmative votes of the shares entitled to be
voted for them, up to the number of Directors to be elected by those shares,
will be elected and votes withheld will have no legal effect.
The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held in street name which cannot be voted by a broker on certain
matters in the absence of instructions from the beneficial owner of the shares)
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum. However, for purposes of determining the outcome of any
matter as to which the broker has indicated in writing on the proxy that it
does not have discretionary authority to vote, such shares will be treated as
not present and not entitled to vote with respect to that matter (even though
those shares may be entitled to vote on other matters).
In accordance with the Company's confidential voting policy, no vote of any
stockholder, whether by proxy or in person, will be disclosed to the officers,
Directors or employees of the Company, except (i) as necessary to meet
applicable legal requirements and to assert claims for and defend claims
against the Company, (ii) when disclosure is voluntarily made or requested by
the stockholder, (iii) when stockholders write comments on proxy cards or (iv)
in the event of a proxy solicitation not approved and recommended by the Board
of Directors. The proxy solicitor, the election inspectors and the tabulators
of all proxies, ballots and voting tabulations that identify stockholders are
independent and are not employees of the Company.
<PAGE>
This Proxy Statement and form of proxy are being sent to stockholders on or
about April 3, 1996. The Company's Annual Report to Stockholders, including
financial statements, for the fiscal year ended December 31, 1995 accompanies
this Proxy Statement. Such Annual Report is not to be considered as a part of
the proxy solicitation material nor as having been incorporated herein by
reference.
The principal executive offices of the Company are located at 3600 Lincoln
Plaza, 500 N. Akard Street, Dallas, Texas 75201-3391.
ELECTION OF DIRECTORS
(ITEM 1)
Effective August 10, 1995, the number of Directors constituting the Board
increased from 10 to 11 and Mr. Richard B. (Dick) Cheney was elected as a
Director at a special meeting of the Board of Directors. Mr. Cheney is proposed
for election to the Board of Directors by stockholders for the first time. Mr.
Thomas H. Cruikshank who had served as a Director since 1977, as Chief
Executive Officer from May 1983 until October 1995 and as Chairman of the Board
since 1989 retired from the Company and the Board on January 2, 1996, and will
not be a candidate for election for the ensuing year. The number of Directors
constituting the Board of Directors was reduced from eleven to ten effective
February 15, 1996.
Ten Directors are to be elected to serve for the ensuing year and until their
successors are elected and qualify. All of the ten nominees hereinafter named
are presently Directors of the Company. It is intended that the Common Stock
represented by the proxies, in the absence of instructions to the contrary,
will be voted for the election as Directors of the ten nominees, or if any such
nominee shall be unwilling or unable to serve, favorable and uninstructed
proxies will be voted for a substitute nominee designated by the Board of
Directors, unless the Board of Directors, because of the unavailability of a
suitable substitute, reduces the number of Directors to be elected. Each
nominee has indicated approval of his or her nomination and his or her
willingness to serve if elected.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
ANNE L. ARMSTRONG, 68, Chairman of Board of Trustees, Center
for Strategic and International Studies, Washington, D.C.;
former Chairman of the President's Foreign Intelligence Advisory
Board, 1981-1990; former Ambassador to Great Britain; joined
Halliburton Company Board in 1977; Chairman of the Environment,
Health and Safety Committee and member of the Management
Oversight and Nominating Committees; Director of American
Express Company, Boise Cascade Corporation, General Motors
Corporation and Glaxo Wellcome p.l.c.
RICHARD B. (DICK) CHENEY, 55, Chairman of the Board, President
and Chief Executive Officer of the Company; President and Chief
Executive Officer of the Company, 1995; Senior Fellow, American
Enterprise Institute for Public Policy Research, 1993-1995;
Secretary of Defense, 1989-1993; Member, U.S. House of
Representatives, 1979-1989; joined Halliburton Company Board in
1995; Director of Union Pacific Corporation and The Procter &
Gamble Company; Member of the Board of Trustees, American
Enterprise Institute for Public Policy Research.
2
<PAGE>
LORD CLITHEROE, 66, Chairman, The Yorkshire Bank, PLC; Deputy
Chief Executive, The RTZ Corporation PLC (an international group
of mining and industrial companies), 1987-1989; Executive
Director, The RTZ Corporation PLC, 1968-1987; joined Halliburton
Company Board in 1987; Chairman of the Management Oversight
Committee and member of the Environment, Health and Safety and
Nominating Committees.
ROBERT L. CRANDALL, 60, Chairman, President and Chief
Executive Officer, AMR Corporation and Chairman and Chief
Executive Officer, American Airlines, Inc. (engaged primarily in
the air transportation business) since 1985; President, American
Airlines, Inc., 1985-1995; joined Halliburton Company Board in
1986; Chairman of the Audit Committee and member of the
Compensation and Management Oversight Committees; Director of
AMR Corporation and American Airlines, Inc.
WILLIAM R. HOWELL, 60, Chairman of the Board, J.C. Penney
Company, Inc. (a major retailer); Chairman of the Board and
Chief Executive Officer, J.C. Penney Company, Inc., 1983-1994;
joined Halliburton Company Board in 1991; Chairman of the
Compensation Committee and member of the Management Oversight
and Audit Committees; Director of J.C. Penney Company, Inc.,
Exxon Corporation, Warner-Lambert Company, Bankers Trust Company
and Bankers Trust New York Corporation.
DALE P. JONES, 59, Vice Chairman of the Company; President of
the Company, 1989-1995; Executive Vice President -- Oil Field
Services of the Company, 1987-1989; Senior Vice President of the
Company, 1987; joined Halliburton Company Board in 1988;
Director of Keystone International, Inc.
C. J. SILAS, 63, Chairman of the Board and Chief Executive
Officer (retired), Phillips Petroleum Company (engaged in
exploration and production of crude oil, natural gas and natural
gas liquids on a worldwide basis, the manufacture of plastics
and petrochemicals and other activities), 1985-1994; joined
Halliburton Company Board in 1993; member of the Compensation,
Audit and Management Oversight Committees; Director of Comsat
Corporation, Reader's Digest Association, Inc. and Ascent
Entertainment Group, Inc.
ROGER T. STAUBACH, 54, Chairman and Chief Executive Officer,
The Staubach Company (a diversified real estate company);
Chairman, Chief Executive Officer and President, The Staubach
Company, 1983-1991; joined Halliburton Company Board in 1991;
member of the Compensation, Management Oversight and
Environment, Health and Safety Committees; Director of Life
Partners Group, Inc., First USA, Inc., Brinker International,
Inc. and Columbus Realty Trust; Trustee of American AAdvantage
Funds.
3
<PAGE>
RICHARD J. STEGEMEIER, 67, Chairman Emeritus, Unocal
Corporation (an integrated petroleum company); Chairman of the
Board of Unocal Corporation, 1989-1995; Chief Executive Officer
of Unocal Corporation, 1988-1994; President, Unocal Corporation,
1985-1992; Chief Operating Officer of Unocal Corporation, 1985-
1988; joined Halliburton Company Board in 1994; Chairman of the
Nominating Committee and member of the Audit and Management
Oversight Committees; Director of Unocal Corporation, First
Interstate Bancorp, Foundation Health Corporation, Northrop
Grumman Corporation, Outboard Marine Corporation and Pacific
Enterprises.
E. L. WILLIAMSON, 71, Chairman of the Board and Chief
Executive Officer (retired), The Louisiana Land and Exploration
Company (engaged principally in the exploration, development and
production of natural resources), 1985-1988; joined Halliburton
Company Board in 1981; Vice Chairman of the Environment, Health
and Safety Committee and member of the Compensation and
Management Oversight Committees; Director of The Louisiana Land
and Exploration Company, Hibernia Corporation and Central
Louisiana Electric Company, Inc.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to persons or groups
who, to the Company's knowledge (based on information contained in Schedules
13G filed with the Securities and Exchange Commission with respect to
beneficial ownership at December 31, 1995), own or have the right to acquire
more than five percent of the Common Stock of the Company.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------- ---------- -------
<S> <C> <C>
FMR Corp. ................................................. 6,807,031(1) 5.95%
82 Devonshire Street
Boston, MA 02109
</TABLE>
- --------
(1) The number of shares reported includes 5,539,802 shares beneficially owned
by Fidelity Management & Research Company, 1,257,429 shares owned by
Fidelity Management Trust Company and 9,800 shares held by Fidelity
International Limited. FMR Corp., through control of Fidelity Management &
Research Company and Fidelity Management Trust Company, has sole
dispositive power over the shares with the exception of those held
beneficially by Fidelity International Limited. FMR Corp. has sole power to
vote or to direct the vote of 880,529 shares of Common Stock.
4
<PAGE>
The following table sets forth, as of March 25, 1996, the amount of Company
Common Stock owned beneficially by each Director and nominee for Director,
each of the executive officers named in the Summary Compensation Table on page
14 and all Directors, nominees for Director and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
--------------------------------
SHARED
SOLE VOTING VOTING OR
NAME OF BENEFICIAL OWNER OR AND INVEST- INVESTMENT PERCENT
NUMBER OF PERSONS IN GROUP MENT POWER POWER(1) OF CLASS
- --------------------------- ----------- ---------- --------
<S> <C> <C> <C>
Anne L. Armstrong.............................. 1,600 *
Richard B. Cheney.............................. 100,000 *
Lord Clitheroe................................. 900 *
Robert L. Crandall............................. 1,100 *
Thomas H. Cruikshank(3)(4)..................... 251,720 *
William R. Howell.............................. 550 *
Dale P. Jones(4)............................... 128,394 *
Tommy E. Knight(4)............................. 76,756 *
Ken R. LeSuer(4)............................... 79,191 1,886(2) *
W. Bernard Pieper(4)........................... 199,360 *
C. J. Silas.................................... 600 *
Roger T. Staubach.............................. 1,100 *
Richard J. Stegemeier.......................... 400 1,000(2) *
E. L. Williamson............................... 600 500(2) *
Shares owned by all current Directors, nominees
for Director and executive officers as a group
(16 persons)(4)............................... 925,437 3,386 *
</TABLE>
- --------
* Less than 1% of shares outstanding.
(1) Halliburton Company Employee Benefit Master Trust No. 3 (the "Trust"), a
trust established to hold the assets of the Halliburton Stock Fund for
certain of the Company's profit sharing, retirement and savings plans
("Plans"), held 1,759,131 shares of Company Common Stock at March 25,
1996. An executive officer not named in the above table has a beneficial
interest in the Trust. Shares of Company Common Stock held in the Trust
are not allocated to any individual's account and an aggregate of 256.12
shares which might be deemed to be beneficially owned as of March 25, 1996
by such unnamed executive officer are not included in the table above.
Shares owned by the Trust are voted by the Trustee, State Street Bank and
Trust Company, in accordance with voting instructions from the
participants. Under the terms of the Plans, a participant has the right,
from time to time, to determine whether up to 15% of his account is
invested in the Halliburton Stock Fund or in alternative investments
permitted by the Plans. The Trustee, however, determines when sales or
purchases are to be made by the Trust.
(2) 1,886 shares are held in joint tenancy by Mr. LeSuer and his wife. Mr.
LeSuer and his wife share voting and investment power with respect to such
shares. Mr. Stegemeier and his wife hold 1,000 shares as co-trustees of
the Stegemeier Family Trust and share voting and investment power with
respect to such shares. 500 shares are held in the name of WMSON COMPANY,
L.L.C., a limited liability company in which Mr. Williamson and his wife
and other family members own all of the outstanding interests. All of such
individuals share voting and investment power with respect to such shares.
(3) Not included in the table for Mr. Cruikshank are 400 shares held by his
wife. Mr. Cruikshank disclaims any beneficial ownership in such shares of
Common Stock.
(4) Included in the table are shares of Common Stock which may be purchased
pursuant to outstanding stock options within 60 days of the date hereof
for the following: Mr. Cruikshank-180,000; Mr. Jones-78,333; Mr. Knight-
54,999; Mr. LeSuer-43,999; Mr. Pieper-160,000 and an unnamed executive
officer-19,666. Until such time as the options are exercised, the
aforesaid individuals will neither have voting nor investment power with
respect to the underlying shares of Common Stock but only have the right
to acquire beneficial ownership thereof through exercise of their
respective options.
5
<PAGE>
THE BOARD OF DIRECTORS AND STANDING COMMITTEES OF DIRECTORS
The Board of Directors of the Company has standing Audit, Compensation,
Nominating, Environment, Health and Safety and Management Oversight Committees.
Each of the standing Committees is comprised entirely of outside Directors,
none of whom is an employee or former employee of the Company. During the last
fiscal year, the Board of Directors met on 7 occasions, the Compensation
Committee met on 6 occasions, the Nominating Committee met on 4 occasions, the
Audit Committee met on 3 occasions, the Environment, Health and Safety
Committee met on 2 occasions, and the Management Oversight Committee met on 5
occasions. No member of the Board attended fewer than 75 percent of the
aggregate number of meetings of the Board and the Committees on which he or she
served during the last fiscal year.
AUDIT COMMITTEE
The Audit Committee, among its functions, recommends to the Board of
Directors the appointment of independent auditors; reviews the scope of the
independent auditors' examination and the scope of activities of the internal
audit department; reviews the Company's financial policies and accounting
systems and controls; and approves and ratifies the duties and compensation of
the independent auditors, both with respect to audit and non-audit services.
The Committee also reviews the Company's compliance with its Code of Business
Conduct. The Committee meets separately from time to time with the independent
auditors and with members of the internal audit staff, outside the presence of
Company management or other employees, to discuss matters of concern, to
receive recommendations or suggestions for change and to exchange relevant
views and information.
COMPENSATION COMMITTEE
Duties of the Compensation Committee include developing and approving an
overall executive compensation philosophy consistent with corporate objectives
and stockholder interests; acting as a salary and promotion committee with
respect to certain officers of the Company and its subsidiaries and divisions;
establishing annual performance criteria and reward schedules under the
Company's Annual Reward Plan and certifying the performance level achieved and
reward payments at the end of each plan year; approving operating unit
incentive plans and such plans' annual performance criteria and reward
schedules; administering awards under the Company's 1993 Stock and Long-Term
Incentive Plan and Senior Executives' Deferred Compensation Plan; acting as a
committee for administration of other forms of non-salary compensation; and
evaluating management development programs and activities.
NOMINATING COMMITTEE
The Nominating Committee develops and recommends to the Board of Directors
criteria relating to candidate selection; identifies candidates for Board
membership; establishes procedures whereby individuals may be recommended by
stockholders for consideration by the Committee as possible candidates for
election to the Board; proposes to the Board a slate of Director nominees for
election at the Annual Meeting of Stockholders and candidates to fill vacancies
on the Board; and recommends members to serve on the various Committees of the
Board.
The Nominating Committee will consider qualified nominees recommended by
stockholders who may submit recommendations to the Committee in care of the
Vice President and Secretary at the address of the
6
<PAGE>
Company set forth on page 2 of this Proxy Statement. Stockholder nominations
must be submitted prior to year end and must be accompanied by a description of
the qualifications of the proposed candidate and a written statement from the
proposed candidate that he or she is willing to be nominated and desirous of
serving, if elected.
Nominations by stockholders may also be made at an Annual Meeting of
Stockholders in the manner provided in the Company's By-laws. The By-laws
provide that a stockholder of the Company entitled to vote for the election of
Directors may make nominations of persons for election to the Board at a
meeting of stockholders by complying with required notice procedures. Such
nominations shall be made pursuant to written notice to the Secretary, which
must be received at the principal executive offices of the Company not less
than ninety (90) days prior to the anniversary date of the immediately
preceding Annual Meeting of Stockholders. The notice shall set forth (a) as to
each person whom the stockholder proposes to nominate for election or re-
election as a Director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class and number of shares of capital stock of the Company
which are beneficially owned by the person, and (iv) all other information
relating to the person that is required to be disclosed in solicitations for
proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended; and (b) as to the stockholder
giving the notice, (i) the name and record address of the stockholder and (ii)
the class and number of shares of capital stock of the Company which are
beneficially owned by the stockholder. The Company may require any proposed
nominee to furnish such other information as may reasonably be required by the
Company to determine the eligibility of such proposed nominee to serve as a
Director of the Company. At any meeting of stockholders, the presiding officer
may disregard the purported nomination of any person not made in compliance
with the above-specified procedures.
ENVIRONMENT, HEALTH AND SAFETY COMMITTEE
The Environment, Health and Safety Committee has responsibility for reviewing
and assessing the Company's environmental, health and safety policies and
practices and proposing modifications or additions thereto as needed;
overseeing the communication and implementation of such policies throughout the
Company; reviewing annually the environmental, health and safety performance of
the Company's operating units and their compliance with applicable policies and
legal requirements; and identifying, analyzing and advising the Board on
environmental, health and safety trends and related emerging issues.
MANAGEMENT OVERSIGHT COMMITTEE
The Management Oversight Committee has responsibility for evaluating the
performance of the Chief Executive Officer of the Company; reviewing succession
plans for senior management of the Company and its major operating groups; and
reviewing other internal matters of broad corporate significance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following persons served as members of the Compensation Committee during
1995: Robert L. Crandall, W. R. Howell, C. J. Silas, Roger T. Staubach and E.
L. Williamson, none of whom is an employee or former employee of the Company.
During the period January 1, 1995 through March 25, 1996, The Staubach Company
acted as agent or consultant to the Company's Halliburton Energy Services
division ("HES") with respect to nine real estate transactions for which The
Staubach Company has received or will receive payments of $246,096 in the
aggregate. Mr. Staubach is the Chairman and Chief Executive Officer of The
Staubach Company.
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Halliburton's primary mission is to enhance long-term shareholder value by
providing a broad spectrum of high quality services and related products within
the energy services and engineering and construction segments through which the
Company operates. The Compensation Committee of Directors (the "Committee")
believes that the Company's total compensation package for executives should be
linked principally to increased shareholder value and to measures which drive
shareholder value.
The Committee has responsibility for overseeing the compensation program for
the members of the Executive Committee of the Company (composed at the end of
1995 of six executive officers) and other senior officers of the Company, its
subsidiaries and divisions.
OVERALL EXECUTIVE COMPENSATION PHILOSOPHY
The overriding objective of the total compensation package for senior
executives is to emphasize the enhancement of shareholder value. Beyond this,
the Committee's priorities are to establish and maintain competitive executive
compensation programs that enable the Company to attract, retain, and motivate
the high caliber executives required for the success of the business. In
determining what it deems to be appropriate types and amounts of compensation
for its executive officers, the Committee consults with outside compensation
consultants and reviews independent compensation data.
In the design and administration of executive compensation programs, the
Committee refers to, but does not necessarily target, current market levels at
the 50th percentile. In doing so, the Committee considers the compensation
practices of companies, adjusted for size, within the energy services and
engineering and construction industries, as well as practices of similarly
sized companies within general industry which, in the Committee's opinion,
provide the most comparable references for the Company's executive positions
(the "Peer Group").
In determining actual compensation levels, the Committee considers total
compensation, as well as each component of the compensation package. With
respect to total compensation, the compensation package is expected in most
instances to produce payments at or below market levels, given acceptable
corporate performance, and above market levels, given outstanding corporate
performance.
The Committee believes its objectives can be optimally achieved by providing
a compensation package that consists of a cash base salary, a rewards-oriented
compensation program aligned with shareholder value creation, stock-based
awards, and benefits, including supplemental retirement benefits.
Section 162(m) of the Internal Revenue Code generally limits to $1 million
the annual income tax deduction for certain "non-performance based"
compensation paid to the chief executive officer or any of the four other
highest paid officers of a publicly-held corporation. Performance-based
compensation will not be subject to the deduction limitation if certain
requirements are met.
The Committee believes that it is preferable for executive compensation to be
deductible for federal income tax purposes and the Company has attempted to
preserve the deductibility of compensation in excess of $1 million a year where
such effort will not adversely affect the objectives of the Company's executive
compensation philosophy. Based on transition rules adopted by the Internal
Revenue Service, compensation attributable to the exercise of outstanding stock
options will be exempt from the non-deductibility provisions of Section 162(m).
Furthermore, in order to maximize the deductibility of compensation paid to the
8
<PAGE>
Company's executive officers, the Board of Directors has adopted, and is
recommending stockholder approval of, an amendment to the 1993 Stock and Long-
Term Incentive Plan (the "1993 Plan") which is designed to ensure that
compensation resulting from the exercise of stock options will continue to be
fully deductible. (See Item 3 below for further information on the proposed
1993 Plan amendment.)
The Committee believes that the Company's existing executive compensation
programs encourage and promote the Company's principal compensation objective,
enhancement of shareholder value, and provide the discretion and flexibility
necessary for the Committee to apply its business judgment in a manner that is
consistent with the best interests of the Company and its shareholders.
Accordingly, the Committee has concluded that the current executive
compensation philosophy and the individual compensation components thereunder
should be retained in full, even though the Company may not be able to deduct
the cost of all or a part of various compensation components for federal income
tax purposes. The Company's deductions for executive compensation were not
impacted by Section 162(m) for the 1995 tax year.
COMPENSATION ARRANGEMENT FOR NEW CHIEF EXECUTIVE OFFICER
In anticipation of the retirement of Mr. Cruikshank, on August 10, 1995
Halliburton Company entered into an agreement with Mr. Cheney to become
President and Chief Executive Officer on October 1, 1995 and, in addition,
Chairman of the Board following Mr. Cruikshank's retirement on January 2, 1996.
The selection of Mr. Cheney followed an extensive search conducted by a
special committee of the Board. The selection criteria emphasized leadership,
both strategic and people-based, and knowledge of the global economic and
geographic dynamics impacting the Company and the industries it serves in more
than one hundred countries around the world.
Mr. Cheney is respected as a leader throughout the world. His strengths and
experience will complement the Company's strong operational management team now
in place. Mr. Cheney is expected to make significant near and long term
contributions to the direction and growth of the Company in the rapidly
changing global marketplace.
The Board of Directors and the Committee approved Mr. Cheney's employment
agreement. Mr. Cheney's total compensation package was developed using the
Company's existing executive compensation philosophies and programs as its
framework. The overall value of Mr. Cheney's compensation package reflects that
deemed necessary, in the judgment of the Committee and the Board of Directors,
to attract him to the Company. The mix of the package reflects corporate
objectives relative to aligning significant compensation opportunity with the
interests of shareholders and building executive stock ownership. All aspects
of Mr. Cheney's 1995 compensation were governed by his employment agreement
with the Company which is summarized on page 18 of this Proxy Statement.
BASE SALARY
Base salaries for the executive officers are reviewed annually by the
Committee. In making salary decisions, the Committee exercises discretion and
judgment based on the following factors: internal factors involving the
executive's level of responsibility, experience, individual performance, and
equity issues relating to pay for other Company executives, as well as external
factors involving competitive positioning, overall corporate performance, and
general economic conditions. No specific formula is applied to determine the
weight of each factor.
9
<PAGE>
Consistent with the Company's overall strategy to shift more of the
executive's total compensation opportunity to pay which is variable based on
Company results, the Committee did not adjust Mr. Cruikshank's base salary in
1995. As noted above, Mr. Cheney's 1995 salary was governed by his employment
agreement.
ANNUAL REWARD PLAN
As a means of strengthening the link between total cash compensation and
Company performance, effective January 1, 1995, the Committee adopted the
Halliburton Company Annual Reward Plan ("Annual Reward Plan"). Members of the
Executive Committee, Company officers, and certain senior Company managers were
eligible to participate in the new Plan, which is an intermediate term reward-
oriented program based on "cash value added" ("CVA"). CVA measures the
difference between after tax cash income and a capital charge based upon the
Company's weighted average cost of capital to determine the amount of value, in
terms of cash flow, added to the business. Because CVA has been demonstrated to
provide a close correlation to total shareholder return, incentive awards are
tied more closely to the enhancement of shareholder value.
At the beginning of each plan year, the Committee establishes a reward
schedule which aligns given levels of CVA performance beyond a threshold level
with reward opportunities, such that the level of achievement of CVA
performance at the end of the plan year will determine the amount of incentive
compensation payable to a participant. In addition, the Committee has the
discretion to award additional compensation based on extraordinary individual
performance.
In 1995, CVA performance exceeded the maximum level established by the
Committee and, accordingly, Mr. Cruikshank and the other plan participants
earned the maximum incentive opportunity in accordance with the 1995 reward
schedule. The improvement in CVA for 1995 was aligned with the Company's Total
Stockholders' Return for the year, as depicted in Chart II on page 13. The
amount earned by Mr. Cruikshank is reflected in the Summary Compensation Table.
In order to further link the compensation earned under the new CVA program more
closely to shareholder value creation and to focus executives' attention on a
time frame longer than one year, only one-half of the bonus earned for 1995 was
paid in cash. The remaining one-half of the bonus was denominated in shares of
stock and will be paid in cash in annual installments in each of the next two
years, each installment based on the value of one-half the denominated shares
at time of payment.
Mr. Cheney was employed as Chief Executive Officer for only the final quarter
of 1995, and pursuant to his employment agreement, was paid $150,000 in lieu of
participation in the Annual Reward Plan for 1995.
STOCK-BASED COMPENSATION
The 1993 Plan provides for a variety of cash and stock-based vehicles
(including stock options, stock appreciation rights, and restricted stock,
among others) from which the Committee may, in its discretion, select in
establishing individual long-term incentive awards or use as it deems
appropriate in specific recruiting/hiring situations.
Stock options were the principal long-term incentive granted to executive
officers in 1995. Stock options granted in 1995 are exercisable at the fair
market value of the Common Stock on the date of grant and become
exercisable during employment over a three-year period (one-third per year).
Options, which have value only if the stock price appreciates following the
date of grant, provide an excellent means for linking executives' interests
directly to those of shareholders.
10
<PAGE>
The Committee's determination of the number of option shares granted,
including the grant made to Mr. Cruikshank, was based primarily on a subjective
assessment of organizational role and internal job relationships, as well as a
reference to competitive practices in long-term incentive opportunities in the
Peer Group. An option for 105,000 shares was granted to Mr. Cruikshank in
January 1995. Pursuant to his employment agreement, Mr. Cheney was awarded
100,000 restricted shares and an option for 200,000 shares.
SENIOR EXECUTIVES' DEFERRED COMPENSATION PLAN
Under the terms of the Senior Executives' Deferred Compensation Plan (the
"SEDC Plan"), which is used for the purpose of providing supplemental
retirement benefits to senior executives, (i) mandatory additions to a
participant's account are made to offset contributions to which each was
entitled under the Company's qualified defined contribution plans in excess of
maximum contributions permitted under the Internal Revenue Code (commonly known
as ERISA Offset Benefits), (ii) additions equal to the amount of any
remuneration that is deferred to preserve deductibility under Section 162(m) of
the Internal Revenue Code may be allocated to a participant's account in lieu
of the payment of such remuneration and (iii) discretionary additions, in such
amounts as the Committee may determine, are made to provide additional
supplemental retirement benefits ("Supplemental Retirement Benefit"). Interest
on active and retired participants' Supplemental Retirement Benefit accounts is
accrued at the rate of five and ten percent per annum, respectively, while
interest on the other two account balances accrues at the rate of ten percent
per annum. No amounts may be received by a participant under the SEDC Plan
prior to such participant's termination.
In making Supplemental Retirement Benefit contributions under the SEDC Plan,
amounts are determined considering guidelines that include references to
retirement benefits provided from other programs, compensation, length of
service with the Company and as an officer, and years of service to normal
retirement. There is no specific weighting of these factors. In addition, in
determining the 1995 Supplemental Retirement Benefit contribution for Mr.
Cruikshank, the Committee considered a study by the outside compensation
consultant which included a comparison of Mr. Cruikshank's projected retirement
income benefits, assuming his retirement on January 2, 1996, to that of the
Peer Group's chief executive officers. Accordingly, the Committee authorized a
1995 Supplemental Retirement Benefit addition for Mr. Cruikshank of $1.4
million, the amount calculated as necessary in order to achieve the Committee's
competitive objective for Mr. Cruikshank's retirement income benefits. Pursuant
to his employment agreement, Mr. Cheney received a 1995 Supplemental Retirement
Benefit contribution of $125,000.
Respectfully submitted,
THE COMPENSATION COMMITTEE OF DIRECTORS
Robert L. Crandall
W. R. Howell
C. J. Silas
Roger T. Staubach
E. L. Williamson
11
<PAGE>
COMPARISON OF FIVE-YEAR AND THREE-YEAR CUMULATIVE TOTAL RETURN
Charts I and II below compare the Company's cumulative total stockholder
return on its Common Stock for the five-year period and the three-year period
ended December 31, 1995, with the Standard & Poor's 500 Stock Index ("S&P 500")
and the Standard & Poor's Energy Composite Index ("S&P Energy Composite").
These comparisons assume the investment of $100 on December 31, 1990 and
December 31, 1992, respectively, and the reinvestment of dividends. Chart I,
covering a five-year period, is required by regulations of the Securities and
Exchange Commission while Chart II is provided to give the stockholder an added
perspective on total stockholder return over a three-year period. The
stockholder returns set forth on the charts below are not necessarily
indicative of future performance.
CHART I
Total Stockholders' Return - Five Years
Assumes Investment of $100 on December 31, 1990 and Reinvestment of Dividends
<TABLE>
<CAPTION>
12-31- 12-31- 12-31- 12-31-
12-31-90 91 92 93 94 12-31-95
-------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
HALLIBURTON COMPANY......... $100 $ 64.02 $ 66.79 $ 76.08 $ 81.61 $127.89
S&P 500..................... $100 $130.47 $140.41 $154.56 $156.60 $215.45
S&P ENERGY COMPOSITE........ $100 $107.53 $109.72 $126.98 $131.85 $172.41
</TABLE>
12
<PAGE>
During the last three years, the Company has taken a number of strategic
actions to improve its performance. Key elements include, but are not limited
to, the sale of certain businesses to enable the Company to concentrate its
efforts on core business activities, the operational and organizational
restructuring of its energy services business, downsizing of facilities and
numbers of employees to meet and respond to market demand in the energy
services industry and company-wide intensive efforts to reduce costs. While
significant charges to earnings were incurred in furtherance of certain of such
actions, management believes that these initiatives have been and are
appropriate. During much of the three-year period, as is indicated in Chart II,
total stockholders' return for the Company's stockholders exceeded both the S&P
500 and S&P Energy Composite indices.
CHART II
Total Stockholders' Return - Three Years
Assumes Investment of $100 on December 31, 1992 and Reinvestment of Dividends
<TABLE>
<CAPTION>
12-31-92 12-31-93 12-31-94 12-31-95
-------- -------- -------- --------
<S> <C> <C> <C> <C>
HALLIBURTON COMPANY....................... $100 $113.91 $122.19 $191.48
S&P 500................................... $100 $110.08 $111.53 $153.44
S&P ENERGY COMPOSITE...................... $100 $115.73 $120.17 $157.14
</TABLE>
13
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------- -----------------------------
AWARDS PAYOUTS
--------------------- -------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY COMPENSATION AWARDS OPTION PAYOUTS COMPENSATION
POSITION YEAR ($) BONUS ($) ($)(1) ($)(2) (#) ($)(3) ($)(4)
------------------ ---- -------- ----------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard B. Cheney(5).... 1995 $250,000 $ 150,000 -- $4,175,000 200,000 N/A $ 142,500
President and Chief 1994 N/A N/A N/A N/A N/A N/A N/A
Executive Officer of 1993 N/A N/A N/A N/A N/A N/A N/A
the Company
Thomas H. Cruikshank.... 1995 $800,000 $ 1,125,000 -- $ 0 105,000 N/A $1,469,137
Chairman of the Board; 1994 $800,000 $ 400,000 -- $ 0 90,000 N/A $ 648,343
Chairman of the Board 1993 $800,000 $ 0 -- $ 0 75,000 N/A $ 507,867
and Chief Executive
Officer of the Company
W. Bernard Pieper....... 1995 $570,000 $ 540,000 -- $ 0 85,000 N/A $ 647,662
Vice Chairman; Vice 1994 $557,500 $ 285,000 -- $ 463,125 50,000 N/A $ 58,642
Chairman and Chief 1993 $495,000 $ 0 -- $ 0 45,000 N/A $ 124,131
Operating Officer of
the Company
Dale P. Jones........... 1995 $500,000 $ 540,000 -- $ 0 55,000 N/A $ 166,821
Vice Chairman; 1994 $500,000 $ 250,000 -- $ 0 45,000 N/A $ 112,338
President of the 1993 $500,000 $ 0 -- $ 0 45,000 N/A $ 173,695
Company
Tommy E. Knight......... 1995 $415,000 $ 540,000 -- $ 0 35,000 N/A $ 130,515
President and Chief 1994 $415,000 $ 207,500 -- $ 0 27,500 N/A $ 60,664
Executive Officer of 1993 $395,962 $ 0 -- $ 0 25,000 N/A $ 128,280
Brown & Root, Inc.
Ken R. LeSuer(5)........ 1995 $425,000 $ 540,000 -- $ 0 35,000 N/A $ 251,991
President and Chief 1994 $385,837 $ 250,000 -- $ 308,750 27,500 N/A $ 162,271
Executive Officer of 1993 $303,333 $ 58,125 -- $ 228,750 14,000 N/A $ 119,486
Halliburton Energy
Services
</TABLE>
- --------
(1) The dollar value of perquisites and other personal benefits for each of the
named executive officers was less than established reporting thresholds.
(2) In 1993, Mr. LeSuer was awarded 7,500 shares of restricted stock on which
restrictions lapse over a 5- year period. In 1994, Mr. Pieper and Mr.
LeSuer were awarded 15,000 and 10,000 shares, respectively. Restrictions
lapse on Mr. Pieper's shares over a 3-year period while restrictions on Mr.
LeSuer's shares lapse over 5 years. Pursuant to Mr. Cheney's employment
contract, he was awarded 100,000 restricted shares in 1995. Restrictions on
such shares lapse over an 8-year period. The total number and value of
restricted shares held by each of the above individuals as of December 31,
1995 were as follows:
<TABLE>
<CAPTION>
TOTAL AGGREGATE
RESTRICTED MARKET
NAME SHARES VALUE
---- ---------- ----------
<S> <C> <C>
Mr. Cheney........................................ 100,000 $5,062,500
Mr. Cruikshank.................................... 11,000 556,875
Mr. Pieper........................................ 26,200 1,326,375
Mr. Jones......................................... 31,600 1,599,750
Mr. Knight........................................ 10,002 506,351
Mr. LeSuer........................................ 16,400 830,250
</TABLE>
Dividends are paid on the restricted shares.
14
<PAGE>
(3) Although the 1993 Plan was approved in 1993, no long-term incentive program
under such Plan has been implemented. No other plans exist under which such
payments may be made.
(4) "All Other Compensation" includes the following accruals for or
contributions to various plans for the fiscal year ending December 31,
1995: (i) profit sharing plan contributions or termination surplus accruals
for Mr. Cruikshank--$11,250, Mr. Pieper--$11,250, Mr. Jones--$11,250,
Mr. Knight-- $17,400, and Mr. LeSuer--$11,250; (ii) supplemental retirement
plan contributions for Mr. Cheney--$125,000, Mr. Cruikshank--$1,400,000,
Mr. Pieper--$600,000, Mr. Jones--$125,000, Mr. Knight--$55,000 and Mr.
LeSuer--$215,000; (iii) 401(k) plan matching contributions for Mr. Jones--
$1,980, Mr. Knight--$250 and Mr. LeSuer--$2,113; (iv) ERISA Offset Benefit
accruals for Mr. Cruikshank--$49,725, Mr. Pieper--$32,130, Mr. Jones--
$26,775, Mr. Knight--$54,810 and Mr. LeSuer--$21,038; (v) above-market
earnings on ERISA Offset Benefit accounts for Mr. Cruikshank--$8,162, Mr.
Pieper--$4,282, Mr. Jones--$1,378, Mr. Knight--$2,822 and Mr. LeSuer--$375;
and (vi) above-market earnings on amounts deferred under Elective Deferral
Plan for Mr. Jones--$438, Mr. Knight--$233 and Mr. LeSuer--$389. The amount
of Company-paid premium for supplemental term life insurance for Mr. Cheney
was $17,500. The Company contribution to split-dollar life insurance
premiums for Mr. LeSuer was $1,826.
(5) Mr. Cheney became an executive officer of the Company on October 1, 1995.
Mr. LeSuer became an executive officer of the Company on September 16,
1993.
15
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(1) UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
-------------------- OPTIONS EMPLOYEES IN PRICE EXPIRATION ------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ----------- ------------ --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dick Cheney............. 200,000 14.7% $42.00 8/10/05 $ 5,282,000 $ 13,388,000
Thomas H. Cruikshank.... 105,000 7.7% 36.25 1/31/05 2,394,000 6,065,850
Dale P. Jones........... 55,000 4.0% 36.25 1/31/05 1,254,000 3,177,350
W. Bernard Pieper....... 65,000 4.7% 36.25 1/31/05 1,482,000 3,755,050
20,000 1.5% 38.875 7/25/00 214,900 474,700
Tommy E. Knight......... 35,000 2.6% 36.25 1/31/05 798,000 2,021,950
Ken R. LeSuer........... 35,000 2.6% 36.25 1/31/05 798,000 2,021,950
All Optionees........... 1,356,500 100.0% 42.39(3) (3) 36,164,290 91,645,140
All Stockholders........ N/A N/A N/A N/A 3,051,907,393(4) 7,733,940,865(4)
</TABLE>
- --------
(1) All options are granted at the fair market value of the Common Stock on
the grant date and generally expire ten years from the grant date. During
employment options vest over a three year period, with one-third of the
shares becoming exercisable on each of the first three anniversaries of
the grant date.
(2) The assumed values result from certain prescribed rates of stock price
appreciation. Values were calculated based on a 10-year exercise period
for all grants other than the second grant to Mr. Pieper which was
calculated on a 5-year exercise period. The actual value of the option
grants is dependent on future performance of the Common Stock and overall
stock market conditions. There is no assurance that the values reflected
in this table will be achieved. The Company did not use an alternative
formula for a grant date valuation, as it is not aware of any formula
which will determine with reasonable accuracy a present value based on
future unknown or volatile factors.
(3) The exercise price shown is a weighted average of all options granted in
1995. Options expire on either July 25, 2000, January 31, 2005, May 15,
2005, August 10, 2005, December 6, 2005 or December 28, 2005.
(4) "All Stockholders" values are calculated using the weighted average
exercise price for all options awarded in 1995, $42.39, based on the
outstanding shares of Common Stock on December 31, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE END (SHARES) FISCAL YEAR-END ($)
ON EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dick Cheney............. 0 $0 0 200,000 $ 0 $1,725,000
Thomas H. Cruikshank.... 0 $0 80,000 190,000 1,111,400 2,954,050
Dale P. Jones........... 0 $0 45,000 100,000 607,575 1,538,900
W. Bernard Pieper....... 0 $0 46,666 133,334 640,487 1,971,013
Tommy E. Knight......... 0 $0 25,833 61,667 353,994 951,768
Ken R. LeSuer........... 0 $0 18,499 58,001 277,904 913,733
</TABLE>
16
<PAGE>
RETIREMENT PLAN
The purpose of the Halliburton Retirement Plan is to provide a floor for
retirement benefits provided under the Halliburton Profit Sharing and Savings
Plan (the "Halliburton Profit Sharing Plan").
The Halliburton Profit Sharing Plan is intended to be the primary plan to
provide retirement benefits to participating employees. The Company makes
annual contributions from profits to the Halliburton Profit Sharing Plan. Such
contributions may not be less than 10% of profits, as defined in the Plan
(reduced by Halliburton Retirement Plan expenses), except that such
contributions may not exceed the maximum amount deductible under Section 404 of
the Internal Revenue Code. Contributions under the Halliburton Profit Sharing
Plan for the year ended December 31, 1995 are set forth in footnote (4) to the
Summary Compensation Table on page 15. It is not possible to estimate the
amount of benefits payable at retirement under the Halliburton Profit Sharing
Plan to Messrs. Cheney, Jones and LeSuer because of some or all of the
following: (i) amounts contributed in the future will be contingent on future
profits, (ii) amounts allocated from forfeited accounts will vary, (iii)
earnings on trust fund assets will vary, (iv) trust fund assets may appreciate
or depreciate in value, (v) the compensation of the individual may vary, (vi)
age at date of retirement may vary and (vii) the Plan may be changed or
discontinued. Mr. Cruikshank and Mr. Pieper retired from the Company on January
2, 1996.
The Halliburton Retirement Plan is intended to be a qualified defined benefit
pension plan which is designed as a floor plan integrated with the Halliburton
Profit Sharing Plan to provide an adequate level of retirement benefits for
employees. An employee is eligible to participate on completion of one year of
service. A participant is fully vested under the Halliburton Retirement Plan
with five years of vesting service; however, there is no vesting prior to
attaining five years of vesting service. Under the terms of the Halliburton
Retirement Plan, each monthly pension payment will be equal to the following
amount: (i) 1 1/3% of an employee's average monthly compensation (computed over
the highest three calendar year period) multiplied by such employee's years of
accrual service after January 1, 1990; minus (ii) a pension which is the
actuarial equivalent of the participant's eligible profit sharing accounts
(excluding any employer and employee contributions under the employee savings
portion of the program) accumulated since January 1, 1990 under the Halliburton
Profit Sharing Plan. The offset for the Halliburton Profit Sharing Plan is
based upon the 1984 Unisex Pension Mortality Table and an 8 1/2% interest
assumption. The form of payment is a life only annuity or the actuarial
equivalent thereof. A vested participant may retire and commence receiving
payment of benefits after attaining age 55. Early retirement benefits are
reduced from the benefit which would otherwise be payable at the normal
retirement age of 65. As noted above, the Halliburton Retirement Plan is
integrated with the Halliburton Profit Sharing Plan so that benefits under the
Halliburton Retirement Plan are offset by benefits under the Halliburton Profit
Sharing Plan. Since the latter cannot be determined until termination of
employment, the maximum benefits under the integrated plans cannot be
determined until such time. Assuming, however, that benefits under the
Halliburton Profit Sharing Plan will not equal or exceed benefits under the
Halliburton Retirement Plan, the estimated annual benefits under the integrated
plans commencing at normal retirement at age 65, without giving effect to ERISA
benefit limitations but reflecting the current ERISA limitation on creditable
compensation of $150,000, for the following individuals named in the Summary
Compensation Table are as follows: Mr. Jones--$23,667 and Mr. LeSuer--$22,000.
The retirement benefits for Messrs. Jones and LeSuer have been computed on the
assumptions that (i) payments will be paid in the form of a life annuity; (ii)
employment will continue until normal retirement at age 65 and (iii) levels of
creditable compensation will remain constant. Messrs. Cruikshank and Pieper
have elected to take lump sum retirement benefits of $84,162 and $50,494,
respectively, under the Halliburton Retirement Plan. Mr. Knight is not a
participant in this Plan and Mr. Cheney is not yet eligible to participate.
17
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
EMPLOYMENT CONTRACTS
The Company entered into an employment agreement with Mr. Cheney dated August
10, 1995 for a term beginning on such date and continuing until September 30,
2003 whereby he will serve as Chairman of the Board, President and Chief
Executive Officer of the Company. Under the agreement Mr. Cheney's cash
compensation was specified for two periods, the first, being for the period
from the effective date of the agreement to December 31, 1995 and the second,
for the period beginning on January 1, 1996 and ending September 30, 2003.
During the first period, Mr. Cheney was to receive a salary, in the aggregate,
of $250,000; a bonus of $150,000, in lieu of participation in the Company's
Annual Reward Plan; and a Supplemental Retirement Benefit contribution of
$125,000 under the SEDC Plan. During the second period, Mr. Cheney will receive
an annual salary of not less than $1,000,000, will participate in the Company's
Annual Reward Plan, beginning with the 1996 plan year, and will receive a
Supplemental Retirement Benefit contribution under the SEDC Plan of at least
$500,000 annually. Also, pursuant to the terms of the agreement, on August 10,
1995 Mr. Cheney was granted a non-qualified stock option to purchase up to
200,000 shares of the Company's Common Stock at $42.00 per share (the fair
market value on such date) and effective October 1, 1995 he was awarded 100,000
shares of Common Stock subject to restrictions. Both the stock option grant and
the restricted stock award were made under the 1993 Plan. The employment
agreement also provides for the Company to reimburse Mr. Cheney for expenses
associated with his relocation to Dallas and for the Company to provide him at
the Company's expense with a term life insurance policy in the face amount of
$2.5 million. With respect to the latter, the insurance policy was discontinued
December 31, 1995 because, effective on such date, increased levels of life
insurance coverage were made available to eligible employees under the
Company's group life insurance program. Amounts set forth above with respect to
1995 compensation and the grants of stock options and restricted stock are
found in the Summary Compensation Table and the table entitled Option Grants in
Last Fiscal Year at pages 14 and 16, respectively, hereof.
Under the terms of his employment agreement, in the event of Mr. Cheney's
termination for any reason other than his voluntary termination (as defined in
the agreement), death, disability or his termination by the Company for cause,
the Company is obligated to pay Mr. Cheney a severance payment consisting of a
lump sum cash payment equal to the value of any restricted shares which were
granted pursuant to the terms of the agreement and which are forfeited because
of such termination of employment plus the lesser of (i) 150 percent of the
base salary that he would have received between the date of such termination of
employment and the end of the term of the agreement or (ii) $3 million. Mr.
Cheney's continuing obligations to the Company after termination, including
non-competition obligations, are consideration for any severance payment which
may be made thereunder.
None of the officers named in the Summary Compensation Table, other than Mr.
Cheney, has an employment agreement with the Company.
ARRANGEMENTS RELATING TO EXECUTIVE OFFICER RETIREMENTS
Mr. Cruikshank retired as Chairman of the Board on January 2, 1996 after more
than 26 years of service with the Company. As a result of his retirement,
restrictions lapsed on 11,000 shares of Common Stock awarded under the
Company's Career Executive Incentive Stock Plan. The fair market value of such
shares on January 2, 1996 was $543,125. Also, in connection with Mr.
Cruikshank's retirement, the Company has agreed to provide him with office
space and part-time secretarial support for a five-year period. The lease
payments for his office are $1,259 per month. The Company also forgave the
balance of a debt owed by Mr. Cruikshank to the Company in the amount of
$7,142.
18
<PAGE>
Mr. Pieper retired as Vice Chairman of the Company on January 2, 1996 after
almost 38 years of service. On July 20, 1995, the Company and Mr. Pieper
entered into an agreement relating to the terms of his continued employment
until January 2, 1996 and consulting services to be performed following his
retirement. In consideration of Mr. Pieper's continued employment through
January 2, 1996, the Company agreed to continue his salary at the current rate;
grant him a stock option for the number of shares set forth in the Option Grant
table on page 16; make a supplemental retirement benefit contribution in the
amount set forth in footnote (4) to the Summary Compensation Table and provide
him with office space and secretarial services. Further, Mr. Pieper agreed to
provide consulting services from the period beginning with his retirement on
January 2, 1996 through October 31, 1997 and to forbear, during such period,
from certain activities detrimental to the Company. In consideration of the
foregoing, the Company agreed to pay Mr. Pieper consulting fees of $22,500 per
month until October 31, 1997. In addition, as a result of Mr. Pieper's
retirement, restrictions lapsed on 26,200 shares of Common Stock awarded under
the Career Executive Incentive Stock Plan and the 1993 Plan. The fair market
value of such shares on January 2, 1996 was $1,293,625.
CHANGE-IN-CONTROL ARRANGEMENTS
Pursuant to the 1993 Plan, in the event of a change-in-control:
A. The Compensation Committee, acting in its sole discretion, will act to
effect one or more of the following alternatives with respect to outstanding
stock options: (i) accelerate the time at which options may be exercised; (ii)
cancel the options and pay the Optionees the excess of the per share value
offered to stockholders in the change-in-control transaction over the exercise
price(s) of the shares subject to options; (iii) make adjustments to the
options as deemed appropriate to reflect the change-in-control or (iv) convert
the options to rights to purchase a proportionate amount of shares of stock or
other securities or property paid to shareholders in the change-in-control
transaction.
B. The Compensation Committee may, with respect to outstanding restricted
stock, provide for full vesting on all shares of restricted stock and
termination of all restrictions applicable thereto.
Pursuant to the Career Executive Incentive Stock Plan, the Compensation
Committee may, in the event of a tender offer for all or a part of the
Company's Common Stock, accelerate the lapse of restrictions on any or all
shares on which restrictions have not theretofore lapsed.
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DIRECTORS' COMPENSATION, RESTRICTED STOCK PLAN AND RETIREMENT PLAN
Directors' Fees and Deferred Compensation Plan
All non-employee Directors of the Company receive an annual fee of $30,000
and an attendance fee of $2,000 for each meeting of the Board of Directors.
Such Directors also receive an attendance fee of $2,000 per meeting for
Committee service. The Chairmen of the Compensation, Audit, Nominating,
Environment, Health and Safety and Management Oversight Committees each receive
an additional $2,000 annually for service in such capacities. Under the
Company's Directors' Deferred Compensation Plan, Directors are permitted to
defer their fees, or a portion thereof, until after they cease to be a Director
of the Company. A participant may elect, on a prospective basis, to have his or
her deferred compensation account either credited quarterly with interest at
the prime rate of Citibank, N.A. or translated on a quarterly basis into
Company Common Stock equivalents. Distribution will be made in cash either in a
lump sum or in annual installments over a 5- or 10-year period, as determined
by the committee appointed to administer the Plan in its discretion. Ms.
Armstrong and Messrs. Crandall, Staubach and Stegemeier have elected to
participate in the Plan.
Directors' Restricted Stock Plan
Pursuant to the terms of the Restricted Stock Plan for Non-Employee Directors
("Directors' Restricted Stock Plan"), which was approved by the stockholders at
the 1993 Annual Meeting, each non-employee Director receives an annual award of
200 restricted shares of Common Stock as a part of his or her compensation. The
awards are in addition to the Directors' annual retainer and attendance fees
and to amounts which would be payable under the Directors' Retirement Plan,
described below. Shares awarded under the Directors' Restricted Stock Plan may
not be sold, assigned, pledged or otherwise transferred or encumbered until the
restrictions are removed. Restrictions will be removed following termination of
Board service under certain circumstances, which include, among others, death
or disability, retirement pursuant to the Company's mandatory retirement
policy, or early retirement after at least four years of service. During the
restriction period, Directors have the right to vote and to receive dividends
with respect to the restricted shares. Any shares which, pursuant to such
Plan's provisions, remain restricted following termination of service will be
forfeited.
Directors' Retirement Plan
Under the terms of the Retirement Plan for Directors of the Company
("Directors' Retirement Plan"), a non-employee Director participant upon the
benefit commencement date (the later of a participant's termination date or
attainment of age 65) will receive an annual benefit equal to the last annual
retainer for such participant for a period of years equal to such participant's
years of service on his or her termination date; provided that a minimum
benefit payment period for each participant is 5 years. Non-employee Directors
become participants in the Directors' Retirement Plan upon the completion of
three years service, as defined in such Plan. Upon the death of a participant,
benefit payments will be made to the surviving spouse, if any, over the
remainder of the retirement benefit payment period. Years of service for each
Director participant under the Plan are: Ms. Armstrong--19, Lord Clitheroe--9,
Mr. Crandall--11, Mr. Howell--5, Mr. Silas--3; Mr. Staubach--5 and Mr.
Williamson--15. Assets of the Company are transferred to Texas Commerce Bank
Dallas, as Trustee, to be held pursuant to the terms of an irrevocable grantor
trust to aid the Company in meeting its obligations under the Directors'
Retirement Plan. The corpus and income of the trust are treated as assets and
income of the Company for federal income tax purposes and are subject to the
claims of general creditors of the Company to the extent provided therein.
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CERTAIN TRANSACTIONS
See Compensation Committee Interlocks and Insider Participation above
regarding transactions between HES and The Staubach Company. Mr. Staubach is
the Chairman and Chief Executive Officer of such company.
During 1995, an executive officer not named in the Summary Compensation
Table was transferred from Houston, Texas to Dallas, Texas. In connection
therewith, and in accordance with Company policies, Halliburton Real Estate
Services, Inc., a subsidiary of the Company, purchased such executive's
Houston residence at its fair market value of $391,000, as determined on the
basis of independent appraisals. The residence was purchased by the executive
in 1994 for $380,000. In addition, pursuant to the Company's relocation
policies for transferred employees, the Company reimbursed the executive for,
or paid on his behalf, expenses associated with his move to Dallas in the
amount of $90,211.
CERTAIN FILINGS
Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Company's officers and Directors, and persons who own
more than 10 percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission and the New York Stock Exchange and to furnish the Company
with copies. The Company's Directors' Deferred Compensation Plan was amended
effective May 1, 1994 so as to exclude stock equivalents under the Plan from
the definition of derivative securities contained in Rule 16a-1(c) and thereby
preclude application of Section 16 to the Plan. Ms. Armstrong and Mr. Staubach
filed amended Statements of Changes in Beneficial Ownership in June 1995
reflecting such plan amendment. Mr. Howell filed a Statement of Changes in
Beneficial Ownership regarding a transfer of shares pursuant to a domestic
relations order with effect from February 1995 in September 1995. The Forms 4
filed in each of the foregoing were inadvertently not filed in a timely
manner.
PROPOSAL FOR RATIFICATION OF THE SELECTION OF AUDITORS
(ITEM 2)
Arthur Andersen LLP or its predecessor, Arthur Andersen & Co., has examined
the financial statements of the Company since 1946. A resolution will be
presented at the Annual Meeting to ratify the appointment by the Board of
Directors of the Company of that firm as independent public accountants to
examine the financial statements and the books and records of the Company for
the year ending December 31, 1996. Such appointment was made upon the
recommendation of the Audit Committee. The Company has been advised by Arthur
Andersen LLP that neither the firm nor any member thereof has any direct
financial interest or any material indirect interest in the Company and,
during at least the past three years, neither such firm nor any member thereof
has had any connection with the Company in the capacity of promoter,
underwriter, voting trustee, Director, officer or employee.
Representatives of such firm are expected to be present at the Annual
Meeting, will have an opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions from
stockholders.
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock represented at the Annual Meeting and entitled to vote
on the matter is needed to approve the proposal.
If the stockholders do not ratify the selection of Arthur Andersen LLP, the
selection of independent accountants will be reconsidered by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS TO EXAMINE THE FINANCIAL
STATEMENTS AND BOOKS AND RECORDS OF THE COMPANY FOR THE YEAR 1996.
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PROPOSAL TO AMEND THE
1993 STOCK AND LONG-TERM INCENTIVE PLAN
(ITEM 3)
INTRODUCTION
On February 18, 1993, the Board of Directors adopted the Halliburton Company
1993 Stock and Long-Term Incentive Plan ("1993 Plan") which was subsequently
approved by the stockholders on May 18, 1993. The Board of Directors has
approved and recommends to the stockholders an amendment to the Plan to comply
with the 1993 changes in the Internal Revenue Code of 1986, as amended,
("Code") and the regulations promulgated thereunder in order to preserve for
the Company the tax deduction for certain compensation paid pursuant to the
Plan.
THE PROPOSED PLAN AMENDMENT--ESTABLISHMENT OF INDIVIDUAL GRANT LIMITS
To comply with regulations under Section 162(m) of the Code, the Board has
amended the 1993 Plan, subject to stockholder approval, to establish a limit of
500,000 on the number of shares which may be awarded in the aggregate pursuant
to grants of stock options or stock appreciation rights under the 1993 Plan to
any one individual during any one calendar year. The full text of the proposed
amendment is found in Appendix A. No other provisions of the 1993 Plan are
being materially changed.
Section 162(m) of the Code and the regulations promulgated thereunder
generally would disallow the Company a federal income tax deduction for
compensation paid to the chief executive officer and the four other most highly
compensated executive officers to the extent such compensation exceeds
$1,000,000 in any year, excluding certain performance-based compensation.
Compensation expense attributable to the exercise of stock options or stock
appreciation rights granted under the 1993 Plan would be excludable as
performance-based compensation only if the 1993 Plan includes a limit on the
number of shares with respect to which awards may be made to any one employee
in a specified period. The compensation expense deduction of a non-qualified
stock option award or the stock appreciation right under the 1993 Plan
generally would be in an amount equal to the fair market value of the Common
Stock at the time of exercise less the option or stock appreciation right
exercise price. Pursuant to the 1993 Plan, certain other stock awards may also
be granted which will not comply with the regulations promulgated under Section
162(m), in which the compensation paid with respect thereto would not
constitute excludable performance-based compensation for purposes of Section
162(m).
THE 1993 PLAN
TYPES OF AWARDS
The 1993 Plan provides for the grant of any or all of the following types of
awards: (1) stock options, including Incentive Stock Options and non-qualified
stock options; (2) stock appreciation rights, in tandem with stock options or
freestanding; (3) restricted stock; (4) performance share awards; and (5) stock
value equivalent awards. Any stock option granted in the form of an Incentive
Stock Option must satisfy the applicable requirements of Section 422 of the
Code. Awards may be made to the same person on more than one occasion and may
be granted singly, in combination, or in tandem as determined by the Committee.
To date only awards of non-qualified stock options and restricted stock have
been made under the Plan.
TERM
The 1993 Plan became effective as of February 18, 1993 and will terminate on
February 18, 2003, unless earlier terminated by the Board of Directors.
Termination of the 1993 Plan will not affect awards made prior to termination,
but awards will not be made after termination.
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ADMINISTRATION
The 1993 Plan is administered by the Compensation Committee of Directors (the
"Committee"). The Committee is appointed by, and serves at the pleasure of, the
Board of Directors of the Company. None of the members of the Committee are
officers or employees, or former officers or employees, of the Company or its
subsidiaries and only those Directors who are "outside directors" for purposes
of the regulations promulgated under Section 162(m) will act as Committee
members. Subject to the terms of the 1993 Plan, and to such approvals and other
authority as the Board of Directors may reserve to itself from time to time,
the Committee, consistent with the terms of the 1993 Plan, will have authority
(i) to select employees to receive an award, (ii) to determine the timing,
form, amount or value and term of grants and awards, and the conditions and
restrictions, if any, subject to which grants and awards will be made and
become payable under the 1993 Plan, (iii) to construe the 1993 Plan and to
prescribe rules and regulations with respect to the administration of the 1993
Plan, and (iv) to make such other determinations authorized under the 1993 Plan
as the Committee deems necessary or appropriate.
ELIGIBILITY
Employees who participate in the 1993 Plan will be selected by the Committee
from among those key employees of the Company and its subsidiaries (as defined
in the 1993 Plan) who, in the judgment of the Committee, may have a significant
effect on the profitability and growth of the Company. The selection of
participants from eligible employees is within the discretion of the Committee.
Currently there are 238 active participants in the 1993 Plan.
SHARES SUBJECT TO THE PLAN
5,500,000 shares of Common Stock are reserved for issuance under the 1993
Plan, of which no more than 1,600,000 shares may be issued in the form of
restricted stock. As of March 25, 1996, 1,751,117 shares of Common Stock were
available for issuance under the 1993 Plan, of which no more than 1,086,450 may
be issued pursuant to future restricted stock awards.
STOCK OPTIONS
Under the 1993 Plan, the Committee may grant awards in the form of options to
purchase shares of Common Stock. The Committee will, with regard to each stock
option, and subject to limitations set forth in the next succeeding sentence,
determine the number of shares subject to the option, the manner and time of
the option's exercise, and the exercise price per share of stock subject to the
option. If the proposed amendment is approved by stockholders, the number of
option shares or stock appreciation rights in the aggregate granted by the
Committee to any employee in any one calendar year shall not exceed 500,000.
The exercise price of a stock option will not be less than the fair market
value of the Common Stock on the date the option is granted. The Committee will
designate each option as a non-qualified or an Incentive Stock Option.
Information pertaining to stock options granted in the last fiscal year may be
found on page 16.
The option price upon exercise may, at the discretion of the Committee, be
paid by a participant in cash, shares of Common Stock or a combination thereof.
Except as set forth below with regard to certain corporate changes, no option
will be exercisable within six months of the date of grant.
The effect of an optionee's termination of employment by reason of death,
retirement, disability, or otherwise will be specified in the option agreement
which evidences each option grant.
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STOCK APPRECIATION RIGHTS
The 1993 Plan also authorizes the Committee to grant stock appreciation
rights ("SARs") either independent of, or in connection with, a stock option.
If granted with a stock option, exercise of the SAR will result in the
surrender of the right to purchase the shares under the option as to which the
SAR was exercised. Upon exercising an SAR, the holder receives for each share
with respect to which the SAR is exercised, an amount equal to the difference
between the exercise price (which may not be less than the fair market value of
such shares on the date of grant) and the fair market value of the Common Stock
on the date of exercise. Payment of such amount may be made in shares of Common
Stock, cash, or a combination thereof, as determined by the Committee. The SARs
will not be exercisable within six months of the date of grant. As noted above,
if the proposed amendment is approved by the stockholders, the number of option
shares or stock appreciation rights in the aggregate granted by the Committee
to any employee in any one calendar year may not exceed 500,000.
Each grant of an SAR will be evidenced by an agreement which specifies the
terms and conditions of the award, including the effect of termination of
employment (by reason of death, disability, retirement or otherwise) on the
exercisability of the SAR.
RESTRICTED STOCK
The 1993 Plan provides that shares of Common Stock subject to certain
restrictions may be awarded to eligible employees from time to time as
determined by the Committee. The Committee will determine the nature and extent
of the restrictions on such shares, the duration of such restrictions, and any
circumstance under which restricted shares will be forfeited. During any such
period of restriction, recipients will have the right to receive dividends and
the right to vote the shares. The Committee will determine the effect of the
termination of employment of a recipient of restricted Common Stock (by reason
of retirement, disability, death or otherwise) prior to the lapse of any
applicable restrictions.
PERFORMANCE SHARE AWARDS
The 1993 Plan permits the Committee to grant Performance Share Awards to
eligible employees under the 1993 Plan. Performance Share Awards are awards
which are contingent on the achievement of certain performance objectives,
valued by reference to the market value of the Common Stock, or increase
thereof, by reference to performance measures other than the Common Stock, or a
combination of both, over a specified period of time.
The length of time over which performance will be measured, the performance
objectives and the criteria to be used in determining whether and to what
degree such objectives have been attained will be determined by the Committee.
The Committee will also determine the effect of termination of employment (by
reason of death, retirement, disability or otherwise) during the performance
period.
STOCK VALUE EQUIVALENT AWARDS
The 1993 Plan permits the Committee to grant Stock Value Equivalent Awards to
eligible employees from time to time. Stock Value Equivalent Awards are rights
to receive the fair market value of a specified number of shares of Common
Stock, or the appreciation in the fair market value thereof, over a specified
period of time, pursuant to a vesting schedule, all as determined by the
Committee. Payment of the vested portion of a Stock Value Equivalent Award
shall be made in cash, based on the fair market value of the Common Stock on
the payment date. The Committee will determine the effect of termination of
employment during the vesting period (by reason of death, retirement,
disability or otherwise) on an employee's Stock Value Equivalent Award.
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AMENDMENT
The Board of Directors may at any time terminate or amend the 1993 Plan in
any respect, except that the Board may not, without approval of the
stockholders of the Company, amend the 1993 Plan so as to (i) increase the
aggregate number of shares of Common Stock which may be issued under the 1993
Plan (except for adjustments in the number of shares permitted with respect to
certain stock splits, stock dividends, mergers, reorganizations or
recapitalizations) or change the minimum option exercise price; (ii) modify the
requirements as to eligibility for participation; (iii) change the class of
employees eligible to receive Awards or materially increase the benefits
accruing to participants under the 1993 Plan; (iv) extend the duration of the
1993 Plan beyond February 18, 2003 or (v) decrease any authority granted to the
Committee under the 1993 Plan in contravention of Rule 16b-3. No amendment or
termination of the 1993 Plan shall, without the consent of the optionee or
participant in the 1993 Plan, alter or impair the rights of such person under
any options or other awards theretofore granted under the 1993 Plan.
CHANGE-IN-CONTROL
In order to maintain all of the participants' rights in the event of a
change-in-control ("Corporate Change") as defined in the 1993 Plan, the
Committee shall, acting in its sole discretion, take one or more of the
following actions with respect to outstanding stock options or SARs: (i)
provide for acceleration of any time periods relating to exercise; (ii) require
the surrender and cancellation of such award in exchange for a cash payment
equal to the amount which could have been attained had such award currently
been exercisable or payable; and (iii) make such adjustment to any outstanding
award as the Committee deems appropriate to reflect the Corporate Change. In
the case of stock options, the Committee may, in addition to the foregoing
alternatives, provide that an optionee shall be entitled to purchase, in lieu
of the number of shares of Common Stock as to which the option is then
exercisable, the number and type of securities or other property to which the
optionee would have been entitled pursuant to the Corporate Change had such
optionee immediately prior to the Corporate Change been the holder of the
number of shares of Common Stock covered by the option.
With respect to outstanding awards of Restricted Stock, Performance Share
Awards and Stock Value Equivalent Awards, if any, the Committee may in its
discretion provide for full vesting and termination of restrictions on
Restricted Stock and for full vesting and payment of Performance Share Awards
or Stock Value Equivalent Awards.
FEDERAL INCOME TAX TREATMENT
Under current U.S. federal tax law, the following are the U.S. federal income
tax consequences generally arising with respect to awards under the 1993 Plan.
See also the section entitled "The Proposed Plan Amendment--Establishment of
Individual Grant Limits" on page 22 for a description of Section 162(m) of the
Code, which limits to $1 million the deduction for certain "non-performance
based" compensation paid to the Company's five most highly compensated
executive officers.
A participant who is granted an Incentive Stock Option does not realize any
taxable income at the time of the grant or at the time of exercise (but in some
circumstances may be subject to an alternative minimum tax as a result of the
exercise). Similarly, the Company is not entitled to any deduction at the time
of grant or at the time of exercise. If the participant makes no disposition of
the shares acquired pursuant to an Incentive Stock Option before the later of
two years from the date of grant and one year from the date of exercise, any
gain or loss realized on a subsequent disposition of the shares will be treated
as a long-term capital gain or loss. Under such circumstances, the Company will
not be entitled to any deduction for federal income tax purposes. If the
participant fails to hold the shares for the foregoing period, the disposal is
treated as a disqualifying disposition. The gain on such disposition is
ordinary income to the participant to the extent of the difference between the
option price and the fair market value on the exercise date, and any excess is
long-
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term or short-term capital gain, depending on the holding period. Under such
circumstances, the Company will be entitled to a tax deduction equal to the
ordinary income amount the participant recognizes in a disqualifying
disposition.
A participant who is granted a non-qualified stock option does not have
taxable income at the time of grant, but does have taxable income at the time
of exercise equal to the difference between the exercise price of the shares
and the market value of the shares on the date of exercise. The Company is
entitled to a corresponding tax deduction for the same amount.
The grant of an SAR will produce no U.S. federal tax consequences for the
participant or the Company. The exercise of an SAR results in taxable income to
the participant, equal to the difference between the exercise price of the
shares and the market price of the shares on the date of exercise, and a
corresponding tax deduction to the Company.
A participant who has been granted an award of restricted shares of Common
Stock will not realize taxable income at the time of the grant, and the Company
will not be entitled to a tax deduction at the time of the grant, unless the
participant makes an election to be taxed at the time of the award. When the
restrictions lapse, the participant will recognize taxable income in an amount
equal to the excess of the fair market value of the shares at such time over
the amount, if any, paid for such shares. The Company will be entitled to a
corresponding tax deduction. Dividends paid to the participant during the
restriction period will also be compensation income to the participant and
deductible as such by the Company. The holder of a restricted stock award may
elect to be taxed at the time of grant of the restricted stock award on the
market value of the shares, in which case (1) the Company will be entitled to a
deduction at the same time and in the same amount, (2) dividends paid to the
participant during the restriction period will be taxable as dividends to him
and not deductible by the Company, and (3) there will be no further federal
income tax consequences when the restrictions lapse.
A participant who has been granted a Performance Share Award will not realize
taxable income at the time of the grant, and the Company will not be entitled
to a tax deduction at such time. A participant will realize ordinary income at
the time the award is paid equal to the amount of cash paid or the value of
shares delivered, and the Company will have a corresponding tax deduction.
The grant of a Stock Value Equivalent Award produces no U.S. federal income
tax consequences for the participant or the Company. The payment of a Stock
Value Equivalent Award results in taxable income to the participant equal to
the amount of the payment received, valued with reference to the fair market
value of the Common Stock on the payment date. The Company is entitled to a
corresponding tax deduction for the same amount.
The Company may deduct in connection with any Award any taxes required by law
to be withheld. The Committee may permit the participant to surrender, or
authorize the Company to withhold, shares of Common Stock in satisfaction of
the Company's withholding obligations.
RESTRICTIONS ON TRANSFER AND EXERCISE
Transfer
An Award is not transferable otherwise than by will or the laws of descent
and distribution and is exercisable during lifetime only by the participant or
the participant's guardian or legal representative. The Option Agreement, Stock
Appreciation Rights Agreement or other written instrument evidencing an Award
are required under the terms of the 1993 Plan to specify the effect of death of
the participant on the Award.
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Exercise
The 1993 Plan authorizes the Committee to postpone issuance of shares of
Common Stock to one or more participants in the event that the Committee
determines that it is necessary or desirable first to obtain or effect any sort
of securities registration or governmental consent or clearance.
GENERAL/VOTE REQUIRED
The closing quotation of the Company's Common Stock on March 22, 1996 on the
New York Stock Exchange was $57.00 per share.
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock represented at the Annual Meeting and entitled to vote
on the matter is needed to approve the proposal.
THE BOARD OF DIRECTORS BELIEVES IT IN THE BEST INTERESTS OF THE COMPANY AND
ITS STOCKHOLDERS TO ADOPT THE PROPOSAL TO AMEND THE 1993 STOCK AND LONG-TERM
INCENTIVE PLAN AS SET FORTH IN APPENDIX A.
COST OF SOLICITATION
Officers and other employees of the Company may solicit proxies personally,
by telephone or other telecommunications, from some stockholders if proxies are
not received promptly. The Company will reimburse banks, brokers or other
persons holding Company Common Stock in their names or in the names of their
nominees for their charges and expenses in forwarding proxies and proxy
material to beneficial owners of the Company's Common Stock. All expenses of
solicitation of proxies will be borne by the Company. In addition, Georgeson &
Company Inc., New York City, has been retained to assist in the solicitation of
proxies for the 1996 Annual Meeting of Stockholders at a fee of $9,500 plus
reasonable expenses.
STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the Securities and Exchange
Commission. Should a stockholder intend to present a proposal at the 1997
Annual Meeting, it must be received by the Secretary of the Company (3600
Lincoln Plaza, 500 N. Akard, Dallas, Texas 75201-3391) not later than November
27, 1996 and must comply with all of the requirements of Rule 14a-8 under the
Securities Exchange Act of 1934 in order to be included in the Company's Proxy
Statement and form of proxy relating to that meeting. The 1997 Annual Meeting
of Stockholders will be held May 20, 1997.
OTHER BUSINESS
The Company's By-laws provide that in addition to any other applicable
requirements, for business to be properly brought before the Annual Meeting by
a stockholder, the stockholder must give timely notice in writing to the
Secretary. To be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the Company, not less than
ninety (90) days prior to the anniversary date of the immediately preceding
stockholders meeting. A stockholder's notice to the Secretary shall set forth
as to each matter the stockholder proposes to bring before the Annual Meeting
(i) a brief description of the business
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desired to be brought before the Annual Meeting and the reasons for conducting
such business at the Annual Meeting, (ii) the name and record address of the
stockholder proposing such business, (iii) the class and number of shares of
the Company which are beneficially owned by the stockholder, (iv) a
representation that the stockholder or a qualified representative of the
stockholder intends to appear in person to bring the proposed business before
the Annual Meeting and (v) any material interest of the stockholder in such
business. This requirement does not preclude discussion by any stockholder of
any business properly brought before the Annual Meeting in accordance with such
procedures.
The management of the Company is not aware of any business to come before the
meeting other than those matters described above in this Proxy Statement. If
any other matters should properly come before the meeting, however, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the person or persons voting the proxies.
By Authority of the Board of
Directors.
LOGO
Susan S. Keith
Vice President and Secretary
March 26, 1996
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APPENDIX A
PROPOSED RESOLUTION RELATING TO AMENDMENT OF THE
HALLIBURTON COMPANY
1993 STOCK AND LONG-TERM INCENTIVE PLAN
Resolved, that paragraph (a) entitled Award Limits of Article V of the
Halliburton Company 1993 Stock and Long-Term Incentive Plan, as amended, be
amended by adding a new sentence following the second sentence in such
Paragraph providing as follows:
"Notwithstanding anything contained herein to the contrary, the number of
Option Shares or Stock Appreciation Rights, singly or in combination,
granted to any employee in any one calendar year shall not in the aggregate
exceed 500,000."
<PAGE>
HALLIBURTON COMPANY
1993 STOCK AND LONG-TERM INCENTIVE PLAN
AS PROPOSED TO BE AMENDED AND RESTATED EFFECTIVE MAY 21, 1996
I. PURPOSE
The purpose of the Halliburton Company 1993 Stock and Long-Term Incentive
Plan (the "Plan") is to provide a means whereby Halliburton Company, a
Delaware corporation (the "Company"), and its Subsidiaries may attract able
persons to enter the employ of the Company and to provide a means whereby
those key employees upon whom the responsibilities of the successful
administration and management of the Company rest, and whose present and
potential contributions to the welfare of the Company are of importance, can
acquire and maintain stock ownership, thereby strengthening their concern for
the long-term welfare of the Company and their desire to remain in its employ.
A further purpose of the Plan is to provide such key employees with additional
incentive and reward opportunities designed to enhance the profitable growth
of the Company over the long term. Accordingly, the Plan provides for granting
Incentive Stock Options, options which do not constitute Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Share
Awards, Stock Value Equivalent Awards, or any combination of the foregoing, as
is best suited to the circumstances of the particular employee as provided
herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:
(a) "Award" means, individually or collectively, any Option, Stock
Appreciation Right, Restricted Stock Award, Performance Share Award or
Stock Value Equivalent Award.
(b) "Board" means the Board of Directors of Halliburton Company.
(c) "Change of Control Value" means, for the purposes of Clause (B) of
Paragraph (e) of Article XII and Clause (B) of Paragraph (f) of Article
XII, the amount determined in Clause (i), (ii) or (iii), whichever is
applicable, as follows: (i) the per share price offered to stockholders of
the Company in any merger, consolidation, sale of assets or dissolution
transaction, (ii) the price per share offered to stockholders of the
Company in any tender offer or exchange offer whereby a Corporate Change
takes place or (iii) if a Corporate Change occurs other than as described
in Clause (i) or Clause (ii), the fair market value per share determined by
the Committee as of the date determined by the Committee to be the date of
cancellation and surrender of an Option or Stock Appreciation Right. If the
consideration offered to stockholders of the Company in any transaction
described in this Paragraph or Paragraphs (d) and (e) of Article XII
consists of anything other than cash, the Committee shall determine the
fair cash equivalent of the portion of the consideration offered which is
other than cash.
(d) "Code" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations
under such section.
(e) "Committee" means the committee selected by the Board to administer
the Plan in accordance with Paragraph (a) of Article IV of the Plan.
(f) "Common Stock" means the common stock, par value $2.50 per share, of
Halliburton Company.
(g) "Company" means Halliburton Company.
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(h) "Corporate Change" means one of the following events: (i) the merger,
consolidation or other reorganization of the Company in which the
outstanding Common Stock is converted into or exchanged for a different
class of securities of the Company, a class of securities of any other
issuer (except a direct or indirect wholly owned subsidiary of the
Company), cash or other property; (ii) the sale, lease or exchange of all
or substantially all of the assets of the Company to any other corporation
or entity (except a direct or indirect wholly owned subsidiary of the
Company); (iii) the adoption by the stockholders of the Company of a plan
of liquidation and dissolution; (iv) the acquisition (other than any
acquisition pursuant to any other clause of this definition) by any person
or entity, including without limitation a "group" as contemplated by
Section 13(d)(3) of the Exchange Act, of beneficial ownership, as
contemplated by such Section, of more than twenty percent (based on voting
power) of the Company's outstanding capital stock; or (v) as a result of or
in connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(j) "Fair Market Value" means, as of any specified date, the closing
price of the Common Stock on the New York Stock Exchange (or, if the Common
Stock is not then listed on such exchange, such other national securities
exchange on which the Common Stock is then listed) on that date, or if no
prices are reported on that date, on the last preceding date on which such
prices of the Common Stock are so reported. If the Common Stock is not then
listed on any national securities exchange but is traded over the counter
at the time a determination of its Fair Market Value is required to be made
hereunder, its Fair Market Value shall be deemed to be equal to the average
between the reported high and low sales prices of Common Stock on the most
recent date on which Common Stock was publicly traded. If the Common Stock
is not publicly traded at the time a determination of its value is required
to be made hereunder, the determination of its Fair Market Value shall be
made by the Committee in such manner as it deems appropriate.
(k) "Holder" means an employee of the Company who has been granted an
Award.
(l) "Incentive Stock Option" means an Option within the meaning of
section 422 of the Code.
(m) "Option" means an Award granted under Article VII of the Plan and
includes both Incentive Stock Options to purchase Common Stock and Options
which do not constitute Incentive Stock Options to purchase Common Stock.
(n) "Option Agreement" means a written agreement between the Company and
an employee with respect to an Option.
(o) "Optionee" means an employee who has been granted an Option.
(p) "Parent Corporation" shall have the meaning set forth in section
424(e) of the Code.
(q) "Performance Share Award" means an Award granted under Article X of
the Plan.
(r) "Plan" means the Halliburton Company 1993 Stock and Long-Term
Incentive Plan.
(s) "Restricted Stock Award" means an Award granted under Article IX of
the Plan.
(t) "Rule 16b-3" means Rule 16b-3 of the general Rules and Regulations of
the Securities and Exchange Commission under the Exchange Act, as such rule
is currently in effect or as hereafter modified or amended.
(u) "Spread" means, in the case of a Stock Appreciation Right, an amount
equal to the excess, if any, of the Fair Market Value of a share of Common
Stock on the date such right is exercised over the exercise price of such
Stock Appreciation Right.
(v) "Stock Appreciation Right" means an Award granted under Article VIII
of the Plan.
(w) "Stock Appreciation Rights Agreement" means a written agreement
between the Company and an employee with respect to an Award of Stock
Appreciation Rights.
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(x) "Stock Value Equivalent Award" means an Award granted under Article
XI of the Plan.
(y) "Subsidiary" means a company (whether a corporation, partnership,
joint venture or other form of entity) in which the Company, or a
corporation in which the Company owns a majority of the shares of capital
stock, directly or indirectly, owns a greater than twenty percent equity
interest, except that with respect to the issuance of Incentive Stock
Options the term "Subsidiary" shall have the same meaning as the term
"subsidiary corporation" as defined in section 424(f) of the Code.
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon the date of its adoption by the Board,
provided the Plan is approved by the stockholders of the Company within twelve
months thereafter and on or prior to the date of the first annual meeting of
stockholders of the Company held subsequent to the acquisition of an equity
security by a Holder hereunder for which exemption is claimed under Rule 16b-3.
Notwithstanding any provision of the Plan or in any Option Agreement or Stock
Appreciation Rights Agreement, no Option or Stock Appreciation Right shall be
exercisable prior to such stockholder approval. No further Awards may be
granted under the Plan after ten years from the date the Plan is adopted by the
Board. Subject to the provisions of Article XIII, the Plan shall remain in
effect until all Options and Stock Appreciation Rights granted under the Plan
have been exercised or expired by reason of lapse of time, all restrictions
imposed upon Restricted Stock Awards have lapsed and all Performance Share
Awards and Stock Value Equivalent Awards have been satisfied.
IV. ADMINISTRATION
(a) Composition of Committee. The Plan shall be administered by a committee
which shall be (i) appointed by the Board and (ii) constituted so as to permit
the Plan to comply with Rule 16b-3.
(b) Powers. The Committee shall have sole authority, in its discretion, to
determine which employees of the Company and its Subsidiaries shall receive an
Award, the time or times when such Award shall be made, whether an Incentive
Stock Option, nonqualified Option or Stock Appreciation Right shall be granted,
the number of shares of Common Stock which may be issued under each Option,
Stock Appreciation Right and Restricted Stock Award, and the value of each
Performance Share Award and Stock Value Equivalent Award. In making such
determinations the Committee may take into account the nature of the services
rendered by the respective employees, their present and potential contribution
to the Company's success and such other factors as the Committee in its
discretion shall deem relevant.
(c) Additional Powers. The Committee shall have such additional powers as are
delegated to it by the other provisions of the Plan. Subject to the express
provisions of the Plan, the Committee is authorized to construe the Plan and
the respective agreements executed thereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the
Plan, and to determine the terms, restrictions and provisions of each Award,
including such terms, restrictions and provisions as shall be requisite in the
judgment of the Committee to cause designated Options to qualify as Incentive
Stock Options, and to make all other determinations necessary or advisable for
administering the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in any agreement relating to an Award
in the manner and to the extent it shall deem expedient to carry it into
effect. The determinations of the Committee on the matters referred to in this
Article IV shall be conclusive.
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V. GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCKAWARDS,
PERFORMANCE SHARE AWARDS AND STOCK VALUE EQUIVALENTAWARDS; SHARES SUBJECT TO
THE PLAN
(a) Award Limits. The Committee may from time to time grant Awards to one or
more employees determined by it to be eligible for participation in the Plan in
accordance with the provisions of Article VI. The aggregate number of shares of
Common Stock that may be issued under the Plan shall not exceed 5,500,000
shares and no more than 1,600,000 of such shares may be issued in the form of
Restricted Stock Awards. Any of such shares which remain unissued and which are
not subject to outstanding Options or Awards at the termination of the Plan
shall cease to be subject to the Plan, but, until termination of the Plan, the
Company shall at all times reserve a sufficient number of shares to meet the
requirements of the Plan. Shares shall be deemed to have been issued under the
Plan only to the extent actually issued and delivered pursuant to an Award. To
the extent that an Award lapses or the rights of its Holder terminate or the
Award is paid in cash, any shares of Common Stock subject to such Award shall
again be available for the grant of an Award. The aggregate number of shares
which may be issued under the Plan shall be subject to adjustment in the same
manner as provided in Article XII with respect to shares of Common Stock
subject to Options then outstanding. Separate stock certificates shall be
issued by the Company for those shares acquired pursuant to the exercise of an
Incentive Stock Option and for those shares acquired pursuant to the exercise
of any Option which does not constitute an Incentive Stock Option.
Notwithstanding anything contained herein to the contrary, the number of Option
Shares or Stock Appreciation Rights, singly or in combination, granted to any
employee in any one calendar year shall not in the aggregate exceed 500,000.
(b) Stock Offered. The stock to be offered pursuant to the grant of an Award
may be authorized but unissued Common Stock or Common Stock previously issued
and outstanding and reacquired by the Company.
VI. ELIGIBILITY
Awards made pursuant to the Plan may be granted only to individuals who, at
the time of grant, are key employees of the Company or any Parent Corporation
or Subsidiary of the Company. Awards may not be granted to any director of the
Company who is not an employee of the Company or to any member of the
Committee. An Award made pursuant to the Plan may be granted on more than one
occasion to the same person, and such Award may include an Incentive Stock
Option, an Option which is not an Incentive Stock Option, an Award of Stock
Appreciation Rights, a Restricted Stock Award, a Performance Share Award, a
Stock Value Equivalent Award or any combination thereof. Each Award shall be
evidenced by a written instrument duly executed by or on behalf of the Company.
VII. STOCK OPTIONS
(a) Stock Option Agreement. Each Option shall be evidenced by an Option
Agreement between the Company and the Optionee which shall contain such terms
and conditions as may be approved by the Committee. The terms and conditions of
the respective Option Agreements need not be identical. Specifically, an Option
Agreement may provide for the payment of the option price, in whole or in part,
by the delivery of a number of shares of Common Stock (plus cash if necessary)
having a Fair Market Value equal to such option price. Each Option Agreement
shall provide that the Option may not be exercised earlier than six months from
the date of grant and shall specify the effect of termination of employment on
the exercisability of the Option.
(b) Option Period. The term of each Option shall be as specified by the
Committee at the date of grant.
(c) Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.
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(d) Special Limitations on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an individual during any calendar
year under all incentive stock option plans of the Company and its Parent
Corporation and Subsidiaries exceeds $100,000, such excess Incentive Stock
Options shall be treated as Options which do not constitute Incentive Stock
Options. The Committee shall determine, in accordance with applicable
provisions of the Code, Treasury Regulations and other administrative
pronouncements, which of an Optionee's Incentive Stock Option will not
constitute Incentive Stock Options because of such limitation and shall notify
the Optionee of such determination as soon as practicable after such
determination. No Incentive Stock Option shall be granted to an individual if,
at the time the Option is granted, such individual owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or of its Parent Corporation or a Subsidiary, within the meaning of
section 422(b)(6) of the Code, unless (i) at the time such Option is granted
the option price is at least 110% of the Fair Market Value of the Common Stock
subject to the Option and (ii) such Option by its terms is not exercisable
after the expiration of five years from the date of grant.
(e) Option Price. The purchase price of Common Stock issued under each Option
shall be determined by the Committee, but such purchase price shall not be less
than the Fair Market Value of Common Stock subject to the Option on the date
the Option is granted.
(f) Options and Rights in Substitution for Stock Options Granted by Other
Corporations. Options and Stock Appreciation Rights may be granted under the
Plan from time to time in substitution for stock options held by employees of
corporations who become, or who became prior to the effective date of the Plan,
key employees of the Company or of any Subsidiary as a result of a merger or
consolidation of the employing corporation with the Company or such Subsidiary,
or the acquisition by the Company or a Subsidiary of all or a portion of the
assets of the employing corporation, or the acquisition by the Company or a
Subsidiary of stock of the employing corporation with the result that such
employing corporation becomes a Subsidiary.
VIII. STOCK APPRECIATION RIGHTS
(a) Stock Appreciation Rights. A Stock Appreciation Right is the right to
receive an amount equal to the Spread with respect to a share of Common Stock
upon the exercise of such Stock Appreciation Right. Stock Appreciation Rights
may be granted in connection with the grant of an Option, in which case the
Option Agreement will provide that exercise of Stock Appreciation Rights will
result in the surrender of the right to purchase the shares under the Option as
to which the Stock Appreciation Rights were exercised. Alternatively, Stock
Appreciation Rights may be granted independently of Options in which case each
Award of Stock Appreciation Rights shall be evidenced by a Stock Appreciation
Rights Agreement between the Company and the Holder which shall contain such
terms and conditions as may be approved by the Committee. The terms and
conditions of the respective Stock Appreciation Rights Agreements need not be
identical. The Spread with respect to a Stock Appreciation Right may be payable
either in cash, shares of Common Stock with a Fair Market Value equal to the
Spread or in a combination of cash and shares of Common Stock. With respect to
Stock Appreciation Rights that are subject to Section 16 of the Exchange Act,
however, the Committee shall, except as provided in Paragraphs (e) and (f) of
Article XII, retain sole discretion (i) to determine the form in which payment
of the Stock Appreciation Right will be made (i.e., cash, securities or any
combination thereof) or (ii) to approve an election by a Holder to receive cash
in full or partial settlement of Stock Appreciation Rights. Upon the exercise
of any Stock Appreciation Rights granted hereunder, the number of shares
reserved for issuance under the Plan shall be reduced only to the extent that
shares of Common Stock are actually issued in connection with the exercise of
such Right. Each Stock Appreciation Rights Agreement shall provide that the
Stock Appreciation Rights may not be exercised earlier than six months from the
date of grant and shall specify the effect of termination of employment on the
exercisability of the Stock Appreciation Rights.
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(b) Exercise Price. The exercise price of each Stock Appreciation Right
shall be determined by the Committee, but such exercise price shall not be
less than the Fair Market Value of a share of Common Stock on the date the
Stock Appreciation Right is granted.
(c) Exercise Period. The term of each Stock Appreciation Right shall be as
specified by the Committee at the date of grant.
(d) Limitations on Exercise of Stock Appreciation Right. A Stock
Appreciation Right shall be exercisable in whole or in such installments and
at such times as determined by the Committee.
IX. RESTRICTED STOCK AWARDS
(a) Restricted Period To Be Established by the Committee. At the time a
Restricted Stock Award is made, the Committee shall establish a period of time
(the "Restriction Period") applicable to such Award; provided, however, that,
except as set forth below and as permitted by Paragraph (b) of this Article
IX, such Restriction Period shall not be less than three (3) years from the
date of grant (the "Minimum Criteria"). An Award which provides for the lapse
of restrictions on shares applicable to such Award in equal annual
installments over a period of at least three (3) years from the date of grant
shall be deemed to meet the Minimum Criteria. The foregoing notwithstanding,
with respect to Restricted Stock Awards of up to an aggregate 275,000 shares
(subject to adjustment as set forth in Article XII), the Minimum Criteria
shall not apply and the Committee may establish such lesser Restriction
Periods applicable to such Awards as it shall determine in its discretion.
Subject to the foregoing, each Restricted Stock Award may have a different
Restriction Period, in the discretion of the Committee. The Restriction Period
applicable to a particular Restricted Stock Award shall not be changed except
as permitted by Paragraph (b) of this Article or by Article XII.
(b) Other Terms and Conditions. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered
in the name of the Holder of such Restricted Stock Award or, at the option of
the Company, in the name of a nominee of the Company. The Holder shall have
the right to receive dividends during the Restriction Period, to vote the
Common Stock subject thereto and to enjoy all other stockholder rights, except
that (i) the Holder shall not be entitled to possession of the stock
certificate until the Restriction Period shall have expired, (ii) the Company
shall retain custody of the stock during the Restriction Period, (iii) the
Holder may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the stock during the Restriction Period and (iv) a breach of the
terms and conditions established by the Committee pursuant to the Restricted
Stock Award shall cause a forfeiture of the Restricted Stock Award. At the
time of such Award, the Committee may, in its sole discretion, prescribe
additional terms, conditions or restrictions relating to Restricted Stock
Awards, including, but not limited to, rules pertaining to the termination of
employment (by retirement, disability, death or otherwise) of a Holder prior
to expiration of the Restriction Period.
(c) Payment for Restricted Stock. A Holder shall not be required to make any
payment for Common Stock received pursuant to a Restricted Stock Award, except
to the extent otherwise required by law and except that the Committee may, in
its discretion, charge the Holder an amount in cash not in excess of the par
value of the shares of Common Stock issued under the Plan to the Holder.
(d) Miscellaneous. Nothing in this Article shall prohibit the exchange of
shares issued under the Plan (whether or not then subject to a Restricted
Stock Award) pursuant to a plan of reorganization for stock or securities in
the Company or another corporation a party to the reorganization, but the
stock or securities so received for shares then subject to the restrictions of
a Restricted Stock Award shall become subject to the restrictions of such
Restricted Stock Award. Any shares of stock received as a result of a stock
split or stock dividend with respect to shares then subject to a Restricted
Stock Award shall also become subject to the restrictions of the Restricted
Stock Award.
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X. PERFORMANCE SHARE AWARDS
(a) Performance Period. The Committee shall establish, with respect to and at
the time of each Performance Share Award, a performance period over which the
performance applicable to the Performance Share Award of the Holder shall be
measured.
(b) Performance Share Awards. Each Performance Share Award may have a maximum
value established by the Committee at the time of such Award.
(c) Performance Measures. A Performance Share Award may be awarded to an
employee contingent upon future performance of the employee, the Company or any
Subsidiary, division or department thereof by or in which he is employed during
the performance period, the Fair Market Value of Common Stock or the increase
thereof during the performance period, combinations thereof, or such other
provisions as the Committee may determine to be appropriate. The Committee
shall establish the performance measures applicable to such performance prior
to the beginning of the performance period but subject to such later revisions
as the Committee shall deem appropriate to reflect significant, unforeseen
events or changes.
(d) Awards Criteria. In determining the value of Performance Share Awards,
the Committee may take into account an employee's responsibility level,
performance, potential, other Awards and such other considerations as it deems
appropriate.
(e) Payment. Following the end of the performance period, the Holder of a
Performance Share Award shall be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Share Award, if any, based on
the achievement of the performance measures for such performance period, as
determined by the Committee in its sole discretion. Payment of a Performance
Share Award (i) may be made in cash, Common Stock or a combination thereof, as
determined by the Committee in its sole discretion, (ii) shall be made in a
lump sum or in installments as prescribed by the Committee in its sole
discretion and (iii) to the extent applicable, shall be based on the Fair
Market Value of the Common Stock on the payment date. If a payment of cash is
to be made on a deferred basis, the Committee shall establish whether interest
shall be credited, the rate thereof and any other terms and conditions
applicable thereto.
(f) Termination of Employment. The Committee shall determine the effect of
termination of employment during the performance period on an employee's
Performance Share Award.
XI. STOCK VALUE EQUIVALENT AWARDS
(a) Stock Value Equivalent Awards. Stock Value Equivalent Awards are rights
to receive an amount equal to the Fair Market Value of shares of Common Stock
or rights to receive an amount equal to any appreciation or increase in the
Fair Market Value of Common Stock over a specified period of time, which vest
over a period of time as established by the Committee, without payment of any
amounts by the Holder thereof (except to the extent otherwise required by law)
or satisfaction of any performance criteria or objectives. Each Stock Value
Equivalent Award may have a maximum value established by the Committee at the
time of such Award.
(b) Award Period. The Committee shall establish, with respect to and at the
time of each Stock Value Equivalent Award, a period over which the Award shall
vest with respect to the Holder.
(c) Awards Criteria. In determining the value of Stock Value Equivalent
Awards, the Committee may take into account an employee's responsibility level,
performance, potential, other Awards and such other considerations as it deems
appropriate.
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(d) Payment. Following the end of the determined period for a Stock Value
Equivalent Award, the Holder of a Stock Value Equivalent Award shall be
entitled to receive payment of an amount, not exceeding the maximum value of
the Stock Value Equivalent Award, if any, based on the then vested value of the
Award. Payment of a Stock Value Equivalent Award (i) shall be made in cash,
(ii) shall be made in a lump sum or in installments as prescribed by the
Committee in its sole discretion and (iii) shall be based on the Fair Market
Value of the Common Stock on the payment date. Cash dividend equivalents may be
paid during, or may be accumulated and paid at the end of, the determined
period with respect to a Stock Value Equivalent Award, as determined by the
Committee. If payment of cash is to be made on a deferred basis, the Committee
shall establish whether interest shall be credited, the rate thereof and any
other terms and conditions applicable thereto.
(e) Termination of Employment. The Committee shall determine the effect of
termination of employment during the applicable vesting period on an employee's
Stock Value Equivalent Award.
XII. RECAPITALIZATION OR REORGANIZATION
(a) Except as hereinafter otherwise provided, Options, Stock Appreciation
Rights, Restricted Stock Awards, Performance Share Awards, Stock Value
Equivalent Awards and any agreements evidencing such Awards shall be subject to
adjustment by the Committee at its discretion as to the number and price of
shares of Common Stock or other consideration subject to such Awards in the
event of changes in the outstanding Common Stock by reason of stock dividends,
stock splits, recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges or other relevant changes in capitalization occurring
after the date of the grant of any such Option or Awards.
(b) The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization
or other change in the Company's capital structure or its business, any merger
or consolidation of the Company, any issue of debt or equity securities having
any priority or preference with respect to or affecting Common Stock or the
rights thereof, the dissolution or liquidation of the Company or any sale,
lease, exchange or other disposition of all or any part of its assets or
business or any other corporate act or proceeding.
(c) The shares with respect to which Options may be granted are shares of
Common Stock as presently constituted, but if, and whenever, prior to the
expiration of an Option theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Common Stock or the payment of a
stock dividend on Common Stock without receipt of consideration by the Company,
the number of shares of Common Stock with respect to which such Option may
thereafter be exercised (i) in the event of an increase in the number of
outstanding shares shall be proportionately increased, and the purchase price
per share shall be proportionately reduced, and (ii) in the event of a
reduction in the number of outstanding shares shall be proportionately reduced,
and the purchase price per share shall be proportionately increased.
(d) If the Company recapitalizes or otherwise changes its capital structure,
thereafter upon any exercise of an Option theretofore granted the Optionee
shall be entitled to purchase under such Option, in lieu of the number of
shares of Common Stock as to which such Option shall then be exercisable, the
number and class of shares of stock and securities and the cash and other
property to which the Optionee would have been entitled pursuant to the terms
of the recapitalization if, immediately prior to such recapitalization, the
Optionee had been the holder of record of the number of shares of Common Stock
then covered by such Option.
(e) In the event of a Corporate Change, then no later than (i) two business
days prior to any Corporate Change referenced in Clause (i), (ii), (iii) or (v)
of the definition thereof or (ii) ten business days after any Corporate Change
referenced in Clause (iv) of the definition thereof, the Committee, acting in
its sole
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discretion without the consent or approval of any Optionee, shall act to
effect one or more of the following alternatives with respect to outstanding
Options which acts may vary among individual Optionees, may vary among Options
held by individual Optionees and, with respect to acts taken pursuant to
Clause (i) above, may be contingent upon effectuation of the Corporate Change:
(A) accelerate the time at which Options then outstanding may be exercised so
that such Options may be exercised in full for a limited period of time on or
before a specified date (before or after such Corporate Change) fixed by the
Committee, after which specified date all unexercised Options and all rights
of Optionees thereunder shall terminate, (B) require the mandatory surrender
to the Company by selected Optionees of some or all of the outstanding Options
held by such Optionees (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date (before or after
such Corporate Change) specified by the Committee, in which event the
Committee shall thereupon cancel such Options and pay to each Optionee an
amount of cash per share equal to the excess, if any, of the Change of Control
Value of the shares subject to such Option over the exercise price(s) under
such Options for such shares, (C) make such adjustments to Options then
outstanding as the Committee deems appropriate to reflect such Corporate
Change (provided, however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Options then outstanding) or (D)
provide that thereafter upon any exercise of an Option theretofore granted the
Optionee shall be entitled to purchase under such Option, in lieu of the
number of shares of Common Stock as to which such Option shall then be
exercisable, the number and class of shares of stock or other securities or
property (including, without limitation, cash) to which the Optionee would
have been entitled pursuant to the terms of the agreement of merger,
consolidation or sale of assets or plan of liquidation and dissolution if,
immediately prior to such merger, consolidation or sale of assets or any
distribution in liquidation and dissolution of the Company, the Optionee had
been the holder of record of the number of shares of Common Stock then covered
by such Option.
(f) In the event of a Corporate Change, then no later than (i) two business
days prior to any Corporate Change referenced in Clause (i), (ii), (iii) or
(v) of the definition thereof or (ii) ten business days after any Corporate
Change referenced in Clause (iv) of the definition thereof, the Committee,
acting in its sole discretion without the consent or approval of any Holder of
a Stock Appreciation Right, shall act to effect one or more of the following
alternatives with respect to outstanding Stock Appreciation Rights which acts
may vary among individual Holders, may vary among Stock Appreciation Rights
held by individual Holders and, with respect to acts taken pursuant to Clause
(ii) above, may be contingent upon effectuation of the Corporate Change: (A)
accelerate the time at which Stock Appreciation Rights then outstanding may be
exercised so that such Stock Appreciation Rights may be exercised in full for
a limited period of time on or before a specified date (before or after such
Corporate Change) fixed by the Committee, after which specified date all
unexercised Stock Appreciation Rights and all rights of Holders thereunder
shall terminate, (B) require the mandatory surrender to the Company by
selected Holders of Stock Appreciation Rights of some or all of the
outstanding Stock Appreciation Rights held by such Holders (irrespective of
whether such Stock Appreciation Rights are then exercisable under the
provisions of the Plan) as of a date (before or after such Corporate Change)
specified by the Committee, in which event the Committee shall thereupon
cancel such Stock Appreciation Rights and pay to each Holder an amount of cash
equal to the Spread with respect to such Stock Appreciation Rights with the
Fair Market Value of the Common Stock at such time to be deemed to be the
Change of Control Value or (C) make such adjustments to Stock Appreciation
Rights then outstanding as the Committee deems appropriate to reflect such
Corporate Change (provided, however, that the Committee may determine in its
sole discretion that no adjustment is necessary to Stock Appreciation Rights
then outstanding).
(g) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon
the exercise of rights or warrants to subscribe therefor, or upon conversion
of shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number
of shares of Common Stock subject to Options or Stock Appreciation Rights
theretofore granted, the purchase price per share of Common Stock subject to
Options or the calculation of the Spread with respect to Stock Appreciation
Rights.
9
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(h) Plan provisions to the contrary notwithstanding, with respect to any
Stock Value Equivalent Awards which have been approved but which are unpaid at
the time a Corporate Change occurs, the Committee may, in its discretion,
provide (i) for full vesting of such Awards as of the date of such Corporate
Change and (ii) for payment of the then value of such Awards as soon as
administratively feasible following the Corporate Change with the value of such
Awards to be based on the Change of Control Value of the Common Stock.
(i) Plan provisions to the contrary notwithstanding, with respect to any
Performance Share Awards which have been approved but which are unpaid at the
time a Corporate Change occurs, the Committee may, in its discretion, provide
(i) for full vesting of such Awards as of the date of such Corporate Change,
(ii) for payment of the then value of such Awards as soon as administratively
feasible following the Corporate Change, with the value of such Awards to be
based, to the extent applicable, on the Change of Control Value of the Common
Stock, (iii) that any provisions in Awards regarding forfeiture of unpaid
Awards shall not be applicable from and after a Corporate Change with respect
to Awards made prior to such Corporate Change and (iv) that all performance
measures applicable to unpaid Awards at the time of a Corporate Change shall be
deemed to have been satisfied in full during the performance period upon the
occurrence of such Corporate Change.
(j) Plan provisions to the contrary notwithstanding, with respect to any
Restricted Stock Awards outstanding at the time a Corporate Change occurs, the
Committee may, in its discretion, provide (i) for full vesting of all Common
Stock awarded to the Holders pursuant to such Restricted Stock Awards as of the
date of such Corporate Change and (ii) that all restrictions applicable to such
Restricted Stock Award shall terminate as of such date.
XIII. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan or alter or amend the Plan
or any part thereof from time to time; provided that no change in any Award
theretofore granted may be made which would impair the rights of the Holder
without the consent of the Holder, and provided, further, that the Board may
not, without approval of the stockholders, amend the Plan:
(a) to increase the aggregate number of shares which may be issued pursuant
to the provisions of the Plan on exercise or surrender of Options or
Stock Appreciation Rights or pursuant to Restricted Stock Awards or
Performance Share Awards, except as provided in Article XII;
(b)to change the minimum Option price;
(c) to change the class of employees eligible to receive Awards or increase
materially the benefits accruing to employees under the Plan;
(d)to extend the maximum period during which Awards may be granted under the
Plan;
(e)to modify materially the requirements as to eligibility for participation
in the Plan; or
(f)to decrease any authority granted to the Committee hereunder in
contravention of Rule 16b-3.
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XIV. OTHER
(a) No Right To An Award. Neither the adoption of the Plan nor any action of
the Board or of the Committee shall be deemed to give an employee any right to
be granted an Option to purchase Common Stock, a Stock Appreciation Right, a
right to a Restricted Stock Award or a right to a Performance Share Award or
Stock Value Equivalent Award or any other rights hereunder except as may be
evidenced by an Award or by an Option Agreement duly executed on behalf of the
Company, and then only to the extent of and on the terms and conditions
expressly set forth therein. The Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to make any other
segregation of funds or assets to assure the payment of any Award.
(b) No Employment Rights Conferred. Nothing contained in the Plan or in any
Award made hereunder shall (i) confer upon any employee any right with respect
to continuation of employment with the Company or any Subsidiary or (ii)
interfere in any way with the right of the Company or any Subsidiary to
terminate his or her employment at any time.
(c) Other Laws; Withholding. The Company shall not be obligated to issue any
Common Stock pursuant to any Award granted under the Plan at any time when the
offering of the shares covered by such Award has not been registered under the
Securities Act of 1933 and such other state and federal laws, rules or
regulations as the Company or the Committee deems applicable and, in the
opinion of legal counsel for the Company, there is no exemption from the
registration requirements of such laws, rules or regulations available for the
issuance and sale of such shares. No fractional shares of Common Stock shall be
delivered, nor shall any cash in lieu of fractional shares be paid. The Company
shall have the right to deduct in connection with all Awards any taxes required
by law to be withheld and to require any payments necessary to enable it to
satisfy its withholding obligations. The Committee may permit the Holder of an
Award to elect to surrender, or authorize the Company to withhold, shares of
Common Stock (valued at their Fair Market Value on the date of surrender or
withholding of such shares) in satisfaction of the Company's withholding
obligation, subject to such restrictions as the Committee deems necessary to
satisfy the requirements of Rule 16b-3.
(d) No Restriction on Corporate Action. Nothing contained in the Plan shall
be construed to prevent the Company or any Subsidiary from taking any corporate
action which is deemed by the Company or such Subsidiary to be appropriate or
in its best interest, whether or not such action would have an adverse effect
on the Plan or any Award made under the Plan. No employee, beneficiary or other
person shall have any claim against the Company or any Subsidiary as a result
of any such action.
(e) Restrictions on Transfer. An Award shall not be transferable otherwise
than by will or the laws of descent and distribution and shall be exercisable
during the lifetime of the Holder only by such Holder or the Holder's guardian
or legal representative. The Option Agreement, Stock Appreciation Rights
Agreement or other written instrument evidencing an Award shall specify the
effect of the death of the Holder on the Award.
(f) Rule 16b-3. It is intended that the Plan and any grant of an Award made
to a person subject to Section 16 of the Exchange Act meet all of the
requirements of Rule 16b-3. If any provision of the Plan or any such Award
would disqualify the Plan or such Award under, or would otherwise not comply
with, Rule 16b-3, such provision or Award shall be construed or deemed amended
to conform to Rule 16b-3.
(g) Governing Law. This Plan shall be construed in accordance with the laws
of the State of Texas, except to the extent that it implicates matters which
are the subject of the General Corporation Law of the State of Delaware which
matters shall be governed by the latter law.
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PROXY
HALLIBURTON COMPANY
PROXY FOR 1996 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R.B. Cheney, D.P. Jones and S.S. Keith,
and any of them, proxies or proxy with full power of substitution and revocation
as to each of them, to represent the undersigned and to act and vote, with all
powers which the undersigned would possess if personally present, at the Annual
Meeting of Stockholders of Halliburton Company to be held in the Parisian Room
of the Fairmont Hotel, 1717 N. Akard, Dallas, Texas, on Tuesday, May 21, 1996,
on the following matters and in their discretion on any other matters which may
come before the meeting or any adjournments thereof. Receipt of Notice-Proxy
Statement dated March 26, 1996, is acknowledged.
(Continued and to be signed on the reverse side)
<PAGE>
TO VOTE IN ACCORDANCE WITH THE BOARD Please mark [ X ]
OF DIRECTORS' RECOMMENDATIONS JUST SIGN your votes
BELOW; NO BOXES NEED TO BE CHECKED. as indicated in
THE BOARD OF DIRECTORS RECOMMENDS A VOTE this example
FOR ITEMS 1, 2 AND 3.
Item 1--Election of Directors
FOR all nominees WITHHOLD AUTHORITY (Instruction: To withhold
listed to the to vote for all authority to vote for an
right (except as nominees listed to the individual nominee write that
marked to the right nominee's name on the space
contrary) provided below)
[ ] [ ] Anne L. Armstrong, R. B. Cheney,
Lord Clitheroe, R. L. Crandall,
W. R. Howell, D. P. Jones,
C. J. Silas, R. T. Staubach,
R. J. Stegemeier and
E. L. Williamson.
- ---------------------------------------- I PLAN TO ATTEND THE MEETING
FOR AGAINST ABSTAIN
Item 2--Proposal for ratification of selection [ ] [ ] [ ]
of independent public accountants for the
Company for 1996.
FOR AGAINST ABSTAIN
Item 3--Proposal to amend the 1993 Stock [ ] [ ] [ ]
and Long-Term Incentive Plan.
Item 4--In their discretion, upon such other business as may properly come
before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED.
In the absence of such direction the proxy will be voted FOR the nominees listed
in Item 1 and FOR the Proposals set forth in Items 2 and 3.
SIGNATURE SIGNATURE DATE
----------------------- ----------------------- -----
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.
