Halliburton Co. Contracts
Sample Business Contracts
Annual Performance Pay Plan - Halliburton Co.
HALLIBURTON ANNUAL PERFORMANCE PAY PLAN
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001
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INDEX
ARTICLE I.................................................................... 1
PURPOSE...................................................................... 1
ARTICLE II................................................................... 1
DEFINITIONS.................................................................. 1
2.1 Definitions................................................ 1
2.2 Number..................................................... 4
2.3 Headings................................................... 4
ARTICLE III.................................................................. 5
PARTICIPATION................................................................ 5
3.1 Participants............................................... 5
3.2 Partial Plan Year Participation............................ 5
3.3 No Right to Participate.................................... 6
3.4 Plan Exclusive............................................. 6
3.5 Consent to Dispute Resolution.............................. 6
ARTICLE IV................................................................... 6
ADMINISTRATION............................................................... 6
ARTICLE V.................................................................... 7
REWARD DETERMINATIONS........................................................ 7
5.1 Performance Measures....................................... 7
5.2 Performance Requirements................................... 7
5.3 Reward Determinations...................................... 7
5.4 Reward Opportunities ...................................... 8
5.5 Discretionary Adjustments.................................. 8
5.6 Discretionary Bonuses...................................... 8
ARTICLE VI................................................................... 8
DISTRIBUTION OF REWARDS...................................................... 8
6.1 Form and Timing of Payment................................. 8
6.2 Excess Remuneration........................................ 9
6.3 Elective Deferral.......................................... 9
6.4 Tax Withholding............................................ 9
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ARTICLE VII.................................................................. 9
TERMINATION OF EMPLOYMENT.................................................... 9
7.1 Termination of Service During Plan Year.................... 9
7.2 Termination of Service After End of Plan Year
But Prior to the Payment Date.............................. 10
ARTICLE VIII................................................................. 10
RIGHTS OF PARTICIPANTS AND BENEFICIARIES..................................... 10
8.1 Status as a Participant or Beneficiary..................... 10
8.2 Employment................................................. 10
8.3 Nontransferability......................................... 11
8.4 Nature of Plan............................................. 11
ARTICLE IX................................................................... 12
CORPORATE CHANGE............................................................. 12
ARTICLE X.................................................................... 12
AMENDMENT AND TERMINATION.................................................... 12
ARTICLE XI................................................................... 12
MISCELLANEOUS................................................................ 12
11.1 Governing Law.............................................. 12
11.2 Severability............................................... 13
11.3 Successor.................................................. 13
11.4 Effective Date............................................. 13
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HALLIBURTON
ANNUAL PERFORMANCE PAY PLAN
The Compensation Committee of Directors of Halliburton Company, having
heretofore established the Halliburton Annual Performance Pay Plan (formerly
known as the Annual Reward Plan), pursuant to the provisions of Article X of
said Plan, hereby amends and restates said Plan to be effective in accordance
with the provisions of Section 11.4 hereof.
ARTICLE I
PURPOSE
The purpose of the Halliburton Annual Performance Pay Plan (the "Plan") is
to reward management and other key employees of the Company and its Affiliates
for improving financial results which drive the creation of value for
shareholders of the Company and thereby, serve to attract, motivate, reward and
retain high caliber employees required for the success of the Company. The Plan
provides a means to link total and individual cash compensation to Company
performance, as measured by Cash Value Added ("CVA"), a demonstrated driver of
shareholder value, and, where appropriate, additional performance measures which
drive CVA.
ARTICLE II
DEFINITIONS
2.1 Definitions. Where the following words and phrases appear in the
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
"Affiliate" shall mean a Subsidiary of the Company or a division
or designated group of the Company or a Subsidiary.
"Base Salary" shall mean the regular cash compensation actually paid
during a Plan Year to a Participant for services rendered or labor
performed while participating in the Plan, including base pay a
Participant could have received in cash in lieu of (i) contributions made
on such Participant's behalf to a qualified Plan maintained by the
Company or to any cafeteria plan under Section 125 of the Code
maintained by the Company and (ii) deferrals of compensation made at the
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Participant's election pursuant to a plan or arrangement of the Company or
an Affiliate, but excluding any Rewards under this Plan and any other
bonuses, incentive pay or special awards.
"Beneficiary" shall mean the person, persons, trust or trusts entitled
by Will or the laws of descent and distribution to receive the benefits
specified under the Plan in the event of the Participant's death prior to
full payment of a Reward.
"Board of Directors" shall mean the Board of Directors of the Company.
"Business Unit CVA" shall mean the respective CVA of designated
business units, each calculated on an aggregate basis for their respective
operations.
"Cause" shall mean (i) the conviction of the Participant of a felony
under Federal law or the law of the state in which such action occurred,
(ii) dishonesty in course of fulfilling the Participant's employment duties
or (iii) the disclosure by the Participant to any unauthorized person or
competitor of any confidential information or confidential knowledge as to
the business or affairs of the Company and its Affiliates.
"CEO" shall mean the Chief Executive Officer of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation Committee of Directors of the
Company, appointed by the Board of Directors from among its members, no
member of which shall be an employee of the Company or a Subsidiary.
"Common Stock" shall mean the common stock, par value $2.50 per share
of Halliburton Company.
"Company" shall mean Halliburton Company and its successors.
"Company CVA" shall mean CVA calculated on a consolidated basis.
"Corporate Change" shall mean 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), cash or
property; (ii) the sale, lease or exchange of all or substantially all of
the assets of the Company to another corporation or entity (except a direct
or indirect wholly owned Subsidiary); (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 Securities Exchange Act
of 1934, as amended, 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
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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.
"CVA" shall mean the difference between operating cash flow and a
capital charge, calculated in accordance with the criteria and guidelines
set forth in the Corporate Policy entitled "Cash Value Added (CVA)," as in
effect at the time any such calculation is made.
"CVA Drivers" shall mean such additional performance measures (either
objective or subjective) as may be approved by the CEO from time to time to
reinforce key operating and strategic goals important to the Company and
its business units. Particular CVA Drivers may vary from business unit to
business unit and from Participant to Participant within a particular
business unit as deemed appropriate according to the needs of the
applicable business unit.
"Dispute Resolution Program" shall mean the Halliburton Dispute
Resolution Plan.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Group CVA" shall mean the respective CVA of the Halliburton Energy
Services Group and the Engineering and Construction Group, each calculated
on an aggregate basis for their respective operations.
"Key Employees" shall mean regular, full-time employees of the Company
or an Affiliate below the Officer level.
"Officer" shall mean a full officer of the Company or an Affiliate.
"Participant" shall mean any active employee of the Company or an
Affiliate who participates in the Plan pursuant to the provisions of
Article III hereof. An employee shall not be eligible to participate in the
Plan while on a leave of absence.
"Participant Category" shall mean a grouping of Participants
determined in accordance with the applicable provisions of Article III.
"Payment Date" shall mean, with respect to a particular Plan Year, the
last business day of February of the year next following the end of such
Plan Year.
"Performance Goals" shall mean, for a particular Plan Year,
established levels of applicable Performance Measures.
"Performance Measures" shall mean the criteria used in determining
Performance Goals for particular Participant Categories, which may
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include one or more of the following: Company CVA, Group CVA, Business Unit
CVA and CVA Drivers.
"Plan" shall mean the Halliburton Annual Performance Pay Plan as
amended and restated effective January 1, 2001, and as the same may
thereafter be amended from time to time.
"Plan Year" shall mean the calendar year ending December 31, 1995 and
each subsequent calendar year thereafter.
"Reward" shall mean the dollar amount of incentive compensation
payable to a Participant under the Plan for a Plan Year determined in
accordance with Section 5.3.
"Reward Opportunity" shall mean, with respect to each Participant
Category, incentive reward payment amounts, expressed as a percentage of
Base Salary, which corresponds to various levels of pre-established
Performance Goals, determined pursuant to the Reward Schedule.
"Reward Schedule" shall mean the schedule which aligns the level of
achievement of applicable Performance Goals with Reward Opportunities for a
particular Plan Year, such that the level of achievement of the
pre-established Performance Goals at the end of such Plan Year will
determine the actual Reward.
"Senior Executive" shall have the meaning set forth in Corporate
Policy 3-9002, Executive Compensation Administration, as such Policy may
from time to time be amended.
"Subsidiary" shall mean any corporation 50 percent or more of whose
voting power is owned, directly or indirectly, by the Company.
2.2 Number. Wherever appropriate herein, words used in the singular shall
be considered to include the plural and words used in the plural shall be
considered to include the singular.
2.3 Headings. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between headings and the
text of the Plan, the text shall control.
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ARTICLE III
PARTICIPATION
3.1 Participants. Active employees who are Senior Executives as of the
beginning of each Plan Year shall be Participants for such Plan Year. In
addition, such other Officers and Key Employees as may be designated annually as
Participants by the CEO prior to the last day of March each Plan Year shall be
Participants for such Plan Year.
3.2 Partial Plan Year Participation. If, after the beginning of a Plan
Year, an employee who was not previously a Participant for such Plan Year (i) is
newly appointed or elected as a Senior Executive or (ii) returns to active
employment as a Senior Executive following a leave of absence, such employee
shall become a Participant effective with such appointment or election or return
to active service, as the case may be, for the balance of the Plan Year, on a
prorated basis, unless the Committee shall determine, in its sole discretion,
that the participation shall be delayed until the beginning of the next Plan
Year. If, after the beginning of the Plan Year, (i) a person is newly elected or
appointed as an Officer (other than a Senior Executive) or is newly hired,
promoted or transferred into a position in which he or she is a Key Employee, or
(ii) an employee who was not previously a Participant for such Plan Year returns
to active employment as an Officer (other than a Senior Executive) or a Key
Employee following a leave of absence, the CEO, or his delegate, may designate
such person as a Participant for the pro rata portion of such Plan Year
beginning on the first day of the month following such designation.
If an employee who has previously been designated as a Participant for a
particular Plan Year takes a leave of absence during such Plan Year, all of such
Participant's rights to a Reward for such Plan Year shall be forfeited, unless
the Committee (with respect to a Participant who is a Senior Executive) or the
CEO (with respect to any other Participant) shall determine that such
Participant's Reward for such Plan Year shall be prorated based upon that
portion of the Plan Year during which he or she was an active Participant, in
which case the prorated portion of the Reward shall be paid in accordance with
the provisions of Section 6.1.
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Each Participant shall be assigned to a Participant Category at the time he
or she becomes a Participant for a particular Plan Year. If a Participant
thereafter incurs a change in status due to promotion, demotion, reassignment or
transfer, (i) the Committee, in the case of the CEO or other Senior Executive,
or (ii) the CEO, or his delegate, in the case of any other Participant, may
approve such adjustment in such Participant's Reward Opportunity as deemed
appropriate under the circumstances (including termination of participation in
the Plan for the remainder of the Plan Year), such adjustment to be made on a
pro rata basis for the balance of the Plan Year effective with the first day of
the month following such approval, unless some other effective date is
specified. All such approvals shall be documented in writing and filed with the
Plan records for the applicable Plan Year.
3.3 No Right to Participate. Except as provided in Sections 3.1 and 3.2,
no Participant or other employee of the Company or an Affiliate shall, at any
time, have a right to participate in the Plan for any Plan Year, notwithstanding
having previously participated in the Plan.
3.4 Plan Exclusive. No employee shall simultaneously participate in this
Plan and in any other short-term incentive plan of the Company or an Affiliate
unless such employee's participation in such other plan is approved by the CEO,
or his delegate.
3.5 Consent to Dispute Resolution. Participation in the Plan constitutes
consent by the Participant to be bound by the terms and conditions of the
Dispute Resolution Program which in substance requires that all disputes arising
out of or in any way related to employment with the Company or its Affiliates,
including any disputes concerning the Plan, be resolved exclusively through such
program, which includes binding arbitration as the last step.
ARTICLE IV
ADMINISTRATION
Each Plan Year, the Committee shall establish the basis for payments under
the Plan in relation to given Performance Goals, as more fully described in
Article V hereof, and, following the end of each Plan Year, determine the actual
Reward payable for each Participant Category. The Committee is authorized to
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construe and interpret the Plan, to prescribe, amend and rescind rules,
regulations and procedures relating to its administration and to make all other
determinations necessary or advisable for administration of the Plan. The CEO
shall have such authority as is expressly provided in the Plan. In addition, as
permitted by law, the Committee and the CEO may delegate such of their
respective authority granted under the Plan as deemed appropriate; provided,
however, that (i) the Committee may not delegate its authority with respect to
matters relating to the CEO and other Senior Executives and (ii) the Committee
and the CEO may not delegate their respective authority under Article V hereof.
Decisions of the Committee and the CEO, or their respective delegates, in
accordance with the authority granted hereby or delegated pursuant hereto shall
be conclusive and binding. Subject only to compliance with the express
provisions hereof, the Committee, the CEO and their respective delegates may act
in their sole and absolute discretion with respect to matters within their
authority under the Plan.
ARTICLE V
REWARD DETERMINATIONS
5.1 Performance Measures. CVA shall be the primary Performance Measure
in determining Performance Goals for any Plan Year. In addition, appropriate
CVA Drivers applicable to particular Participants may also be used as
Performance Measures.
5.2 Performance Requirements. Prior to the last day of February of each
Plan Year, (i) the Committee shall approve the Company CVA, applicable Group CVA
and applicable Business Unit CVA Performance Goals and the CEO shall approve
appropriate CVA Drivers applicable to certain Participants and (ii) the
Committee shall establish a Reward Schedule which aligns the level of
achievement of applicable Performance Goals with Reward Opportunities, such that
the level of achievement of the pre-established Performance Goals at the end of
the Plan Year will determine the actual Reward.
5.3 Reward Determinations. After the end of each Plan Year, (i) the
Committee shall determine the extent to which the Performance Goals (other than
CVA Drivers) have been achieved and (ii) the CEO shall determine the extent to
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which the applicable CVA Drivers have been achieved, and the amount of the
Reward shall be computed for each Participant in accordance with the Reward
Schedule.
5.4 Reward Opportunities. The established Reward Opportunities may vary in
relation to the Participant Categories and within the Participant Categories.
In the event a Participant changes Participant Categories during a Plan Year,
the Participant's Reward Opportunities shall be adjusted in accordance with the
applicable provisions of Section 3.2.
5.5 Discretionary Adjustments. Once established, Performance Goals will
not be changed during the Plan Year. However, if the Committee, in its sole and
absolute discretion, determines that there has been (i) a change in the
business, operations, corporate or capital structure, (ii) a change in the
manner in which business is conducted or (iii) any other material change or
event which will impact one or more Performance Goals in a manner the Committee
did not intend, then the Committee may, reasonably contemporaneously with such
change or event, make such adjustments as it shall deem appropriate and
equitable in the manner of computing the relevant Performance Measures
applicable to such Performance Goal or Goals for the Plan Year; provided,
however, that the CEO shall be authorized, subject to the review and oversight
of the Committee, to make adjustments in the manner of computing one or more CVA
Drivers if, when evaluated in accordance with the standards set forth in the
preceding sentence, he shall deem such adjustments to be appropriate and
equitable.
5.6 Discretionary Bonuses. Notwithstanding any other provision contained
herein to the contrary, the Committee may, in its sole discretion, make such
other or additional bonus payments to a Participant as it shall deem
appropriate.
ARTICLE VI
DISTRIBUTION OF REWARDS
6.1 Form and Timing of Payment. Except as otherwise provided below, the
amount of each Reward shall be paid in cash on the Payment Date, or as soon
thereafter as practicable. In the event of termination of a Participant's
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employment prior to the Payment Date for any reason other than death (in which
case payment shall be made in accordance with the applicable provisions of
Article VII), the amount of any Reward (or prorated portion thereof) payable
pursuant to the provisions of Sections 7.1 or 7.2 shall be paid in cash on the
Payment Date, or as soon thereafter as practicable.
6.2 Excess Remuneration. Notwithstanding the provisions of Section 6.1, to
the extent that incentive compensation hereunder does not qualify as
performance-based compensation pursuant to Section 162(m) of the Code, the
Committee may, in its discretion, with respect to a Participant who is a
"covered employee" for purposes of Section 162(m), determine that payment of
that portion of a Reward which would otherwise cause such Participant's
compensation to exceed the limitation on the amount of compensation deductible
by the Company in any taxable year pursuant to such Section 162(m), be deferred
until such Participant is no longer a "covered employee." In such case, interest
shall be credited on the portion of the Reward deferred for the period of the
deferral as provided pursuant to Article IV of the Halliburton Company Benefit
Restoration Plan, as amended, or other applicable plan.
6.3 Elective Deferral. Nothing herein shall be deemed to preclude a
Participant's election to defer receipt of a percentage of his or her Reward
beyond the time such amount would have been payable hereunder pursuant to the
Halliburton Elective Deferral Plan or other similar plan.
6.4 Tax Withholding. The Company or employing entity through which payment
of a Reward is to be made shall have the right to deduct from any payment
hereunder any amounts that Federal, state, local or foreign tax laws require
with respect to such payments.
ARTICLE VII
TERMINATION OF EMPLOYMENT
7.1 Termination of Service During Plan Year. In the event a Participant's
employment is terminated prior to the last business day of a Plan Year for any
reason other than death, normal retirement at or after age 65 or disability (as
determined by the CEO or his delegate), all of such Participant's rights to a
Reward for such Plan Year shall be forfeited, unless the Committee (with respect
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to a Participant who was the CEO or other Senior Executive) or the CEO (with
respect to any other Participant) shall determine that such Participant's Reward
for such Plan Year shall be prorated based upon that portion of the Plan Year
during which he or she was a Participant, in which case the prorated portion of
the Reward shall be paid in accordance with the provisions of Section 6.1. In
the case of death during the Plan Year, the prorated amount of such
Participant's Reward shall be paid to the Participant's estate, or if there is
no administration of the estate, to the heirs at law, on the Payment Date, or as
soon thereafter as practicable. In the case of disability or normal retirement
at or after age 65, the prorated amount of a Participant's Reward shall be paid
in accordance with the provisions of Section 6.1.
7.2 Termination of Service After End of Plan Year But Prior to the Payment
Date. If a Participant's employment is terminated after the end of the
applicable Plan Year, but prior to the Payment Date, for any reason other than
termination for Cause, the amount of any Reward applicable to such Plan Year
shall be paid to the Participant in accordance with the provisions of Section
6.1, except in the case of death, in which case the amount of the Reward then
unpaid shall be paid to such Participant's estate, or if there is no
administration of the estate, to the heirs at law, as soon as practicable.
If a Participant's employment is terminated for Cause, all of such
Participant's rights to a Reward applicable to such Plan Year shall be
forfeited.
ARTICLE VIII
RIGHTS OF PARTICIPANTS AND BENEFICIARIES
8.1 Status as a Participant or Beneficiary. Neither status as a
Participant or Beneficiary shall be construed as a commitment that any Reward
will be paid or payable under the Plan.
8.2 Employment. Nothing contained in the Plan or in any document related
to the Plan or to any Reward shall confer upon any Participant any right to
continue as an employee or in the employ of the Company or an Affiliate or
constitute any contract or agreement of employment for a specific term or
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interfere in any way with the right of the Company or an Affiliate to reduce
such person's compensation, to change the position held by such person or to
terminate the employment of such person, with or without cause.
8.3 Nontransferability. No benefit payable under, or interest in, this
Plan shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge and any such attempted action shall be
void and no such benefit or interest shall be, in any manner, liable for, or
subject to, debts, contracts, liabilities or torts of any Participant or
Beneficiary; provided, however, that, nothing in this Section 8.3 shall prevent
transfer (i) by Will, (ii) by applicable laws of descent and distribution or
(iii) pursuant to an order that satisfies the requirements for a "qualified
domestic relations order" as such term is defined in section 206(d)(3)(B) of
ERISA and section 414(p)(1)(A) of the Code, including an order that requires
distributions to an alternate payee prior to a Participant's "earliest
retirement age" as such term is defined in section 206(d)(3)(E)(ii) of ERISA and
section 414(p)(4)(B) of the Code. Any attempt at transfer, assignment or other
alienation prohibited by the preceding sentence shall be disregarded and all
amounts payable hereunder shall be paid only in accordance with the provisions
of the Plan.
8.4 Nature of Plan. No Participant, Beneficiary or other person shall have
any right, title or interest in any fund or in any specific asset of the Company
or any Affiliate by reason of any Reward hereunder. There shall be no funding of
any benefits which may become payable hereunder. Nothing contained in the Plan
(or in any document related thereto), nor the creation or adoption of the Plan,
nor any action taken pursuant to the provisions of the Plan shall create, or be
construed to create, a trust of any kind or a fiduciary relationship between the
Company or an Affiliate and any Participant, Beneficiary or other person. To the
extent that a Participant, Beneficiary or other person acquires a right to
receive payment with respect to a Reward hereunder, such right shall be no
greater than the right of any unsecured general creditor of the Company or other
employing entity, as applicable. All amounts payable under the Plan shall be
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paid from the general assets of the Company or employing entity, as applicable,
and no special or separate fund or deposit shall be established and no
segregation of assets shall be made to assure payment of such amounts. Nothing
in the Plan shall be deemed to give any employee any right to participate in the
Plan except in accordance herewith.
ARTICLE IX
CORPORATE CHANGE
In the event of a Corporate Change, (i) with respect to a Participant's
Reward Opportunity for the Plan Year in which the Corporate Change occurred,
such Participant shall be entitled to an immediate cash payment equal to the
maximum amount of Reward he or she would have been entitled to receive for the
Plan Year, prorated to the date of the Corporate Change; and (ii) with respect
to a Corporate Change that occurs after the end of the Plan Year but prior to
the Payment Date, a Participant shall be entitled to an immediate cash payment
equal to the Reward earned for such Plan Year.
ARTICLE X
AMENDMENT AND TERMINATION
Notwithstanding anything herein to the contrary, the Committee may, at any
time, terminate or, from time to time amend, modify or suspend the Plan;
provided, however, that, without the prior consent of the Participants affected,
no such action may adversely affect any rights or obligations with respect to
any Rewards theretofore earned for a particular Plan Year, whether or not the
amounts of such Rewards have been computed and whether or not such Rewards are
then payable.
ARTICLE XI
MISCELLANEOUS
11.1 Governing Law. The Plan and all related documents shall be governed
by, and construed in accordance with, the laws of the State of Texas, without
giving effect to the principles of conflicts of law thereof, except to the
extent preempted by federal law. The Federal Arbitration Act shall govern all
matters with regard to arbitrability.
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11.2 Severability. If any provision of the Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.
11.3 Successor. All obligations of the Company under the Plan shall be
binding upon and inure to the benefit of any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
11.4 Effective Date. This amendment and restatement of the Plan shall be
effective from and after January 1, 2001, and shall remain in effect until such
time as it may be terminated or amended pursuant to Article X.
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