Supplemental Executive Retirement Plan - Halliburton Co.
AS AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2001
TABLE OF CONTENTS
ARTICLE I: PURPOSE OF THE PLAN........................... 1
ARTICLE II: DEFINITIONS................................... 1
ARTICLE III: ADMINISTRATION OF THE PLAN.................... 2
ARTICLE IV: ALLOCATIONS UNDER THE PLAN,
PARTICIPATION IN THE PLAN AND
SELECTION FOR AWARDS.......................... 4
ARTICLE V: NON-ASSIGNABILITY OF AWARDS................... 5
ARTICLE VI: VESTING....................................... 5
ARTICLE VII: DISTRIBUTION OF AWARDS........................ 5
ARTICLE VIII: NATURE OF PLAN................................ 6
ARTICLE IX: FUNDING OF OBLIGATION......................... 7
ARTICLE X: AMENDMENT OR TERMINATION OF PLAN.............. 7
ARTICLE XI: GENERAL PROVISIONS............................ 7
ARTICLE XII: EFFECTIVE DATE................................ 8
EXECUTIVE RETIREMENT PLAN
Halliburton Company, having heretofore established the Halliburton
Company Senior Executives' Deferred Compensation Plan, pursuant to the
provisions of Article X of said Plan, hereby splits said Plan into the
Halliburton Company Supplemental Executive Retirement Plan and the Halliburton
Company Benefit Restoration Plan and amends and restates the Halliburton Company
Supplemental Executive Retirement Plan to read as follows and to be effective in
accordance with the provisions of Article XII hereof.
Purpose of the Plan
The purpose of the Halliburton Company Supplemental Executive
Retirement Plan is to provide supplemental retirement benefits to Participants
in order to promote growth of the Company and provide additional means of
attracting and holding qualified competent executives.
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.
(A) Account: An individual account for each Participant on the books of
such Participant's Employer to which is credited amounts allocated for the
benefit of such Participant pursuant to the provisions of Article IV, Paragraph
(D) and interest credited pursuant to the provisions of Article IV, Paragraph
(B) Administrative Committee: The administrative committee appointed
by the Compensation Committee to administer the Plan.
(C) Allocation Year: The calendar year for which an allocation is made
to a Participant's Account pursuant to Article IV.
(D) Board: The Board of Directors of the Company.
(E) Code: The Internal Revenue Code of 1986, as amended.
(F) Compensation Committee: The Compensation Committee of the Board.
(G) Company: Halliburton Company.
(H) Employee: Any employee of an Employer. The term does not include
independent contractors or persons who are retained by an Employer as
(I) Employer: The Company and any Subsidiary designated as an Employer
in accordance with the provisions of Article III of the Plan.
(J) ERISA: The Employee Retirement Income Security Act of 1974, as
(K) Participant: A Senior Executive who is selected as a Participant
for an Allocation Year. The Compensation Committee shall be the sole judge of
who shall be eligible to be a Participant for any Allocation Year. The selection
of a Senior Executive to be a Participant for a particular Allocation Year shall
not constitute him or her a Participant for another Allocation Year unless he or
she is selected to be a Participant for such other Allocation Year by the
(L) Plan: The Halliburton Company Supplemental Executive Retirement
Plan, as amended and restated January 1, 2001, and as the same may thereafter be
amended from time to time.
(M) Senior Executive: An Employee who is a senior executive, including
an officer, of an Employer (whether or not he or she is also a director
thereto), who is employed by an Employer on a full-time basis, who is
compensated for such employment by a regular salary and who, in the opinion of
the Compensation Committee, is one of the key personnel of an Employer in a
position to contribute materially to its continued growth and development and to
its future financial success.
(N) Subsidiary: At any given time, a company (whether a corporation,
partnership, llimited liability company or other form of entity) in which the
Company or any other of the Subsidiaries or both owns, directly or indirectly,
an aggregate equity interest of 80% or more.
(O) Termination of Service: Severance from employment with an Employer
for any reason other than a transfer between Employers.
(P) Trust: Any trust created pursuant to the provisions of Article IX.
(Q) Trust Agreement: The agreement establishing the Trust.
(R) Trustee: The trustee of the Trust.
(S) Trust Fund: Assets under the Trust as may exist from time to time.
Administration of the Plan
(A) The Compensation Committee shall appoint an Administrative
Committee to administer, construe and interpret the Plan. Such Administrative
Committee, or such successor Administrative Committee as may be duly appointed
by the Compensation Committee, shall serve at the pleasure of the Compensation
Committee. Decisions of the Administrative Committee, with respect to any matter
involving the Plan, shall be final and binding on the Company, its shareholders,
each Employer and all officers and other executives of the Employers. For
purposes of the Employee Retirement Income Security Act of 1974, the
Administrative Committee shall be the Plan "administrator" and shall be the
"named fiduciary" with respect to the general administration of the Plan.
(B) The Administrative Committee shall maintain complete and adequate
records pertaining to the Plan, including but not limited to Participants'
Accounts, amounts transferred to the Trust, reports from the Trustee and all
other records which shall be necessary or desirable in the proper administration
of the Plan. The Administrative Committee shall furnish the Trustee such
information as is required to be furnished by the Administrative Committee or
the Company pursuant to the Trust Agreement.
(C) The Company (the "Indemnifying Party") hereby agrees to indemnify
and hold harmless the members of the Administrative Committee (the "Indemnified
Parties") against any losses, claims, damages or liabilities to which any of the
Indemnified Parties may become subject to the extent that such losses, claims,
damages or liabilities or actions in respect thereof arise out of or are based
upon any act or omission of the Indemnified Party in connection with the
administration of this Plan (including any act or omission of such Indemnified
Party constituting negligence, but excluding any act or omission of such
Indemnified Party constituting gross negligence or willful misconduct), and will
reimburse the Indemnified Party for any legal or other expenses reasonably
incurred by him or her in connection with investigating or defending against any
such loss, claim, damage, liability or action.
(D) Promptly after receipt by the Indemnified Party under the preceding
paragraph of notice of the commencement of any action or proceeding with respect
to any loss, claim, damage or liability against which the Indemnified Party
believes he or she is indemnified under the preceding paragraph, the Indemnified
Party shall, if a claim with respect thereto is to be made against the
Indemnifying Party under such paragraph, notify the Indemnifying Party in
writing of the commencement thereof, provided, however, that the omission so to
notify the Indemnifying Party shall not relieve it from any liability which it
may have to the Indemnified Party to the extent the Indemnifying Party is not
prejudiced by such omission. If any such action or proceeding shall be brought
against the Indemnified Party, and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to participate
therein, and, to the extent that it shall wish, to assume the defense thereof,
with counsel reasonably satisfactory to the Indemnified Party, and, after notice
from the Indemnifying Party to the Indemnified Party of its election to assume
the defense thereof, the Indemnifying Party shall not be liable to such
Indemnified Party under the preceding paragraph for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation or reasonable expenses of
actions taken at the written request of the Indemnifying Party. The Indemnifying
Party shall not be liable for any compromise or settlement of any such action or
proceeding effected without its consent, which consent will not be unreasonably
(E) The Administrative Committee may designate any Subsidiary as an
Employer by written instrument delivered to the Secretary of the Company and the
designated Employer. Such written instrument shall specify the effective date of
such designated participation, may incorporate specific provisions relating to
the operation of the Plan which apply to the designated Employer only and shall
become, as to such designated Employer and its employees, a part of the Plan.
Each designated Employer shall be conclusively presumed to have consented to its
designation and to have agreed to be bound by the terms of the Plan and any and
all amendments thereto upon its submission of information to the Administrative
Committee required by the terms of or with respect to the Plan; provided,
however, that the terms of the Plan may be modified so as to increase the
obligations of an Employer only with the consent of such Employer, which consent
shall be conclusively presumed to have been given by such Employer upon its
submission of any information to the Administrative Committee required by the
terms of or with respect to the Plan. Except as modified by the Administrative
Committee in its written instrument, the provisions of this Plan shall be
applicable with respect to each Employer separately, and amounts payable
hereunder shall be paid by the Employer which employs the particular
Participant, if not paid from the Trust Fund.
(F) No member of the Administrative Committee shall have any right to
vote or decide upon any matter relating solely to himself or herself under the
Plan or to vote in any case in which his or her individual right to claim any
benefit under the Plan is particularly involved. In any case in which an
Administrative Committee member is so disqualified to act and the remaining
members cannot agree, the Compensation Committee shall appoint a temporary
substitute member to exercise all the powers of the disqualified member
concerning the matter in which he or she is disqualified.
Allocations Under the Plan,
Participation in the Plan and Selection for Awards
(A) Each Allocation Year the Compensation Committee shall, in its sole
discretion, determine what amounts shall be available for allocation to the
Accounts of the Participants pursuant to Paragraph (D) below.
(B) No award shall be made to any person while he or she is a voting
member of the Compensation Committee.
(C) The Compensation Committee from time to time may adopt, amend or
revoke such regulations and rules as it may deem advisable for its own purposes
to guide in determining which of the Senior Executives it shall deem to be
Participants for a particular Allocation Year and the method and manner of
payment thereof to the Participants.
(D) The Compensation Committee, during the Allocation Year involved or
during the next succeeding Allocation Year, shall determine which Senior
Executives it shall designate as Participants for such Allocation Year and the
amounts allocated to each Participant for such Allocation Year. In making its
determination, the Compensation Committee shall consider such factors as the
Compensation Committee may in its sole discretion deem material. The
Compensation Committee, in its sole discretion, may notify a Senior Executive at
any time during a particular Allocation Year or in the Allocation Year following
the Allocation Year for which the award is made that he or she has been selected
as a Participant for all or part of such Allocation Year, and may determine and
notify him or her of the amount which shall be allocated to such Participant for
such Allocation Year. The decision of the Compensation Committee in selecting a
Senior Executive to be a Participant or in making any allocation to him or her
shall be final and conclusive, and nothing herein shall be deemed to give any
Senior Executive or his or her legal representatives or assigns any right to be
a Participant for such Allocation Year or to be allocated any amount except to
the extent of the amount, if any, allocated to a Participant for a particular
Allocation Year, but at all times subject to the provisions of the Plan.
(E) A Senior Executive whose service is terminated during the
Allocation Year may be selected as a Participant for such part of the Allocation
Year prior to his or her Termination of Service and be granted such award with
respect to his or her services during such part of the Allocation Year as the
Compensation Committee, in its sole discretion and under any rules it may
promulgate, may determine.
(F) Allocations to Participants under the Plan shall be made by
crediting their respective Accounts on the books of their Employers as of the
last day of the Allocation Year. Accounts of Participants shall also be credited
with interest as of the last day of each Allocation Year, at the rate set forth
in Paragraph (G) below, on the average monthly credit balance of the Account
being calculated by using the balance of each Account on the first day of each
month. Prior to Termination of Service, the annual interest shall accumulate as
a part of the Account balance. After Termination of Service, the annual interest
for such Allocation Year may be paid as more particularly set forth hereinafter
in Article VII, Paragraph (C).
(G) Interest shall be credited on amounts allocated to Participants'
Accounts at the rate of 5% per annum for periods prior to Termination of Service
and at the rate of 10% per annum for periods subsequent to Termination of
Non-Assignability of Awards
No Participant shall have any right to commute, encumber, pledge,
transfer or otherwise dispose of or alienate any present or future right or
expectancy which he or she may have at any time to receive payments of any
allocations made to such Participant, all such allocations being expressly
hereby made non-assignable and non-transferable; provided, however, that nothing
in this Article shall prevent transfer (A) by will, (B) by the applicable laws
of descent and distribution or (C) 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 the 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 the ERISA and section 414(p)(4)(B) of the Code. Attempts to
transfer or assign by a Participant (other than in accordance with the preceding
sentence) shall, in the sole discretion of the Compensation Committee after
consideration of such facts as it deems pertinent, be grounds for terminating
any rights of such Participant to any awards allocated to but not previously
paid over to such Participant.
All amounts credited to a Participant's Account shall be fully vested
and not subject to forfeiture for any reason except as provided in Article V.
Distribution of Awards
(A) Upon Termination of Service of a Participant the Administrative
Committee (i) shall certify to the Trustee or the treasurer of the Employer, as
applicable, the amount credited to the Participant's Account on the books of
each Employer for which the Participant was employed at a time when he or she
earned an award hereunder, (ii) shall determine whether the payment of the
amount credited to the Participant's Account under the Plan is to be paid
directly by the applicable Employer, from the Trust Fund, if any, or by a
combination of such sources (except to the extent the provisions of the Trust
Agreement if any, specify payment from the Trust Fund) and (iii) shall determine
and certify to the Trustee or the treasurer of the Employer, as applicable, the
method of payment of the amount credited to a Participant's Account, selected by
the Administrative Committee from among the following alternatives:
(1) A single lump sum payment upon Termination of Service;
(2) A payment of one-half of the Participant's balance upon
Termination of Service, with payment of the additional one-half to be
made on or before the last day of a period of one year following
Termination of Service; or
(3) Payment in monthly installments over a period not to
exceed ten years with such payments to commence upon Termination of
The above notwithstanding, if the total amount credited to the Participant's
Account upon Termination of Service is less than $50,000, such amount shall
always be paid in a single lump sum payment upon Termination of Service.
(B) The Trustee or the treasurer of the Employer, as applicable, shall
thereafter make payments of awards in the manner and at the times so designated,
subject, however, to all of the other terms and conditions of this Plan and the
Trust Agreement if any. This Plan shall be deemed to authorize the payment of
all or any portion of a Participant's award from the Trust Fund to the extent
such payment is required by the provisions of the Trust Agreement, if any.
(C) Interest on the second half of a payment under Paragraph (A)(2)
above shall be paid with the final payment, while interest on payments under
Paragraph (A)(3) above may be paid at each year end or may be paid as a part of
a level monthly payment computed by the Administrative Committee through the use
of such methodologies as the Administrative Committee shall select from time to
time for such purpose.
(D) If a Participant shall die while in the service of an Employer, or
after Termination of Service and prior to the time when all amounts payable to
him or her under the Plan have been paid to such Participant, any remaining
amounts payable to the Participant hereunder shall be payable to the estate of
the Participant. The Administrative Committee shall cause the Trustee or the
treasurer of the Employer, as applicable, to pay to the estate of the
Participant all of the awards then standing to his or her credit in a lump sum
or in such other form of payment consistent with the alternative methods of
payment set forth above as the Administrative Committee shall determine after
considering such facts and circumstances relating to the Participant and his or
her estate as it deems pertinent.
(E) If the Plan is terminated pursuant to the provisions of Article X,
the Compensation Committee may, at its election and in its sole discretion,
cause the Trustee or the treasurer of the Employer, as applicable, to pay to all
Participants all of the awards then standing to their credit in the form of lump
Nature of Plan
This Plan constitutes a mere promise by the Employers to make benefit
payments in the future and Participants have the status of general unsecured
creditors of the Employers. Further, the adoption of this Plan and any setting
aside of amounts by the Employers with which to discharge their obligations
hereunder shall not be deemed to create a trust; legal and equitable title to
any funds so set aside shall remain in the Employers, and any recipient of
benefits hereunder shall have no security or other interest in such funds. Any
and all funds so set aside shall remain subject to the claims of the general
creditors of the Employers, present and future. This provision shall not require
the Employers to set aside any funds, but the Employers may set aside such funds
if they choose to do so.
Funding of Obligation
Article VIII above to the contrary notwithstanding, the Employers may
fund all or part of their obligations hereunder by transferring assets to a
trust if the provisions of the trust agreement creating the Trust require the
use of the Trust's assets to satisfy claims of an Employer's general unsecured
creditors in the event of such Employer's insolvency and provide that no
Participant shall at any time have a prior claim to such assets. Any transfers
of assets to a trust may be made by each Employer individually or by the Company
on behalf of all Employers. The assets of the Trust shall not be deemed to be
assets of this Plan.
Amendment or Termination of Plan
The Compensation Committee shall have the power and right from time to
time to modify, amend, supplement, suspend or terminate the Plan as it applies
to each Employer, provided that no such change in the Plan may deprive a
Participant of the amounts allocated to his or her Account or be retroactive in
effect to the prejudice of any Participant and the interest rate applicable to
amounts credited to Participants' Accounts for periods subsequent to Termination
of Service shall not be reduced below 6% per annum. Any such modification,
amendment, supplement suspension or termination shall be in writing and signed
by a member of the Compensation Committee.
(A) No Participant shall have any preference over the general creditors
of an Employer in the event of such Employer's insolvency.
(B) Nothing contained herein shall be construed to give any person the
right to be retained in the employ of an Employer or to interfere with the right
of an Employer to terminate the employment of any person at any time.
(C) If the Administrative Committee receives evidence satisfactory to
it that any person entitled to receive a payment hereunder is, at the time the
benefit is payable, physically, mentally or legally incompetent to receive such
payment and to give a valid receipt therefor, and that an individual or
institution is then maintaining or has custody of such person and that no
guardian, committee or other representative of the estate of such person has
been duly appointed, the Administrative Committee may direct that such payment
thereof be paid to such individual or institution maintaining or having custody
of such person, and the receipt of such individual or institution shall be valid
and a complete discharge for the payment of such benefit.
(D) Payments to be made hereunder may, at the written request of the
Participant, be made to a bank account designated by such Participant, provided
that deposits to the credit of such Participant in any bank or trust company
shall be deemed payment into his or her hands.
(E) Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.
(F) THIS PLAN SHALL BE CONSTRUED AND ENFORCED UNDER THE LAWS OF THE
STATE OF TEXAS EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
This amendment and restatement of the Plan shall be effective from and
after January 1, 2001 and shall continue in force during subsequent years unless
amended or revoked by action of the Compensation Committee.
By /s/ David J. Lesar
Chairman of the Board, President
and Chief Executive Officer