• | Executive compensation is managed from a total compensation perspective (i.e., base salary, short- and long-term incentives, and retirement are reviewed altogether). | | | • | Each component of the total compensation package is analyzed in order to determine that compensation opportunities for our NEOs are competitive and market-driven. | | | • | All elements of compensation are compared to the total compensation packages of a comparator peer group, which includes both competitors and companies representing general industry that reflect the markets in which we compete for business and people. |
HALLIBURTON | - 2016 2020Proxy Statement | 2429 |
Summary of our ExecutiveGood Compensation Governance Practices At-A-Glance
Compensation PracticeWhat We Do | | Pursued at Halliburton?What We Don’t Do | | Use mix of relative and absolute financial metrics | | More information | Pay for performance | | YES.The majority of our NEO compensation is performance based. | | p28 | Alignment between long-term objectives and thecreation of stockholder value | | YES.Long-term incentives are at-risk and reward the achievement of value creation andperformance goals while aligning management with stockholders’ interests. | | p32 | Benchmarking against a relevant peer group | | YES.The Compensation Committee reviews market data for peer group companies as wellas general industry surveys. | | p27 | Independent, External Compensation Consultant | | YES.Pearl Meyer & Partners provides executive compensation consulting services to theCommittee. | | p27 | Stock Ownership Requirements | | YES.Robust executive and director stock ownership requirements. | | p14 and 36 | Hedging and Pledging Policy | | YES.Executives and directors are prohibited from hedging and pledging company stock,except for charitable donation purposes. | | p36 | Clawback Policy | | YES.Our policy provides for the forfeiture, recovery, or reimbursement of incentive planawards. We also will report to stockholders if any clawback occurred. | | p14 and 35 | Annual “Say on Pay” vote | | YES.Support of 72% of the total votes cast at our 2015 annual meeting. | | p24 | RepricingNo repricing of underwater stock options | | NO.We prohibit repricing.The majority of total direct compensation opportunity isperformance-based, at-risk, and long-term (65% of long-termincentives is equity-based effective 2020) | | | No excessive perquisites | Exchange underwater options | Deliver rewards that are based on the achievement of long-term objectives and the creation of shareholder value | | NO.We prohibit | No guaranteed bonuses or uncapped incentives | | Maintain a clawback policy in the event of a material financial restatement or fraud | | | No single trigger vesting upon a change of control(applicable to awards to NEOs for 2019 forward) | | Maintain robust executive and Director stock ownershiprequirements | | | No excise tax gross-ups | | Use an independent, external compensation consultant | | | No hedging or pledging of company securities by executives and Directors | | Benchmark against a relevant group of peer companies | | | No buyout or exchange of underwater options.options | | Rigorous oversight of incentive metrics, goals, and pay-for-performance relationship | | | No special or one-time stock grants for internal promotions | Liberal stock or option recycling | Hold an annual say-on-pay vote | | NO.We prohibit | No liberal stock and option recycling. | | | Excise-tax gross-ups | | NO.We do not provide for excise tax gross-ups. | | p45 | Guaranteed bonusesshare counting or uncapped incentives | | NO.We do not provide guaranteed bonuses or uncapped incentives. | | recycling |
Elements of our Executive Compensation Program for Fiscal 20152019 Halliburton’s executive compensation program isfor the 2019 plan year was composed of base salary, a short-term incentives,incentive, and long-term incentives each of which isas described below: below(changes for the 2020 plan year are highlighted in red):
HALLIBURTON - 2016 Proxy Statement | 25 | Reward Element | | Objective | | Key Features | | How Award Value is Determined | | 2019 Decisions |
FIXED | | Base Salary | | Compensatesexecutives based ontheir responsibilities,experience, andskillset. | | Fixed element ofcompensation paid in cash. | | Benchmarked against agroup of comparably sizedcorporations and industrypeers. | | Base salaries wereadjusted consistentwith our compensationphilosophy. (Page 35) | AT RISK | | Short-Term Incentive | | To motivateand incentivizeperformance over aone-year period. | | Award value and measuresare reviewed annually.Targets are set at thebeginning of the year. | | Performance measuredagainst Cash ValueAdded (CVA) performancemeasures. | | Award values weretargeted at the marketmedian for 2019.(Page 35) | | | | | | | | For 2020, performancemeasured against: | | | | | | | | | | • 75% NOPAT • 25% Asset Turns | | | | Long-Term Incentives | | To motivate andincentivize sustainedperformance overthe long-term. Alignsinterests of ourNEOs with long-termshareholders. | | Value is delivered 50%performance units; 35%restricted stock; and 15%stock options. Performanceunits measured over threeyears against targets setat the beginning of theperformance period. | | The 2019 performanceunits measured againstROCE performance relativeto performance peers.Restricted stock and stockoptions have time-basedvesting and value is drivenby our share price. | | Awards were targetedat the market medianfor 2019. (Page 36) | | | | | | For 2020: • 70% performance unitsmeasured over three years(1/2 in stock; 1/2 in cash)with relative TSR modifier • 30% restricted stock • Stock options eliminated | | | | |
As illustrated below, the majority of our CEO’s and NEOs’ total direct compensation opportunity is performance-based, at-risk, and long-term. The graphs depict the mix of total target direct compensation set for our CEO and NEOs during 2015 and assumesfor the 2019 plan performance levels are achieved.
Executive Compensation Procedures
Our compensation procedures guide the actions taken byyear. As part of its process, the Compensation Committee or Committee.makes decisions about target long-term incentive award opportunities for the following year during its regular December meeting. For the 2019 plan year, the Compensation Committee approved restricted stock and stock option grants in December 2018.
| | (1) | Reflects the compensation mix of Messrs. Loeffler, Carre, and Rainey. Mr. Richard was not included because he was not a NEO for the entire year. |
Setting Executive Compensation Role of the Compensation Committee The Compensation Committee oversees the executive compensation program and has overall responsibility for making final decisions about total compensation for all of the NEOs, except for the CEO, which is set by the entire Board of Directors. As part of its annual process, the Committee works closely with senior management (as appropriate) and the Committee’s independent compensation consultant. This process ensures consistency from year to year and adherence to the responsibilities listed in the Committee’s Charter. The Committee reviews and approves total compensation annually,Charter, which includes: • | Selecting and engaging an independent, external compensation consultant; | | | • | Identifying the comparator peer group companies; | | | • | Reviewing market datais available on benchmark positions; and | | | • | Reviewing performance results against operating plans and our comparator peer group. |
These procedures are used to make the final determination of total compensation for our NEOs.website.
Our internal stock nomination process under the Halliburton Company Stock and Incentive Plan, or the Stock and Incentive Plan, ensures that all award grant dates are prospective and not retroactive. For NEOs, the grant date is the day the Committee determines annual compensation actions, generally in December of each year. However, awards may be approved by the Committee throughout the year as they determine, such as for retention or performance purposes. Exercise prices are set at the closing stock price on the date of the approved grant.
Role of theThe CEO in Setting Compensation
Mr. Lesar does not provide recommendations concerning his own compensation, nor is he present when his compensation is discussed by the Committee. The Committee, with input from its independent external compensation consultant, discusses the elements of his compensation in executive session and makes a recommendation to all of the non-employee members of the Boardnon-management Directors for discussion and final approval. At the Committee’s request, a member of our management team may attend the executive session to answer questions from the Committee.
Mr. Lesar does, however, assistThe CEO, with input from the Committee’s independent compensation consultant, assists the Committee in setting executive compensation for the other NEOs. He and the independent, external compensation consultant to the Committee are guided by our compensation principles. They also consider current business conditions.
The following recommendations are made to the Committee for each NEO:
• | Base salary adjustments, taking into account comparator peer group data, and the NEO’s individual performance and role within the company. | | | • | Performance measures, target goals, and award schedules for short-term incentive opportunities under our performance pay plan, with performance targets being set relative to the projected business cycle and business plan. | | | • | Long-term incentive awards made under the Stock and Incentive Plan, including developing and providing specific recommendations to the Committee on the aggregate number and types of shares to be awarded annually, reviewing the rationale and guidelines for annual stock awards, and recommending changes to the grant types, when appropriate. | | | • | Retirement awards, which are calculated by an external actuary, under the Halliburton Company Supplemental Executive Retirement Plan. |
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Use of Independent Consultants and Advisors The Committee engaged Pearl Meyer & Partners, or PM&P, as its independent external compensation consultant during 2015. PM&P provides only executive compensation consulting services to the Committee and2019. Pearl Meyer does not provide any other services to us. The primary responsibilities of the independent external compensation consultant were to: • | Provide the Committee with independent and objective market data; | | | • | Conduct compensation analysis; | | | • | Recommend potential changes to the comparator peer group and performance peer group; | • | Recommend plan design changes; | | | • | Advise on risks associated with compensation plans; and | | | • | Review and advise on pay programs and pay levels. |
These services are provided as requested by the Committee throughout the year. Based on their review of our executive compensation program, Pearl Meyer concluded that our compensation plans do not appear to present any material risks to the Company or its shareholders in the design, metrics, interaction between, or administration of the incentive plans. | HALLIBURTON | 2020Proxy Statement | 31 |
Role of Benchmarking, Peer Companies, and Market Data Executive Compensation Benchmarking
The Committee regularly assesses the market competitiveness of the Company’s executive compensation program based on data from a comparator peer group. The companies comprising the comparator peer group are selected based on the following considerations: • | Market capitalization; | | | • | Revenue and number of employees; | | | • | Scope in terms of globalGlobal impact and reach; and | | | • | Industry affiliation. |
Industry affiliation includes companies that are involved in the oil and natural gas and energy services industries. The comparator peer group is reviewed annually by the Committee to ensure relevance, with data provided to the Committee by the independent external compensation consultant. The Committee targets between 20 and 25 companies for our comparator peer group. Comparator Peer Group
The 20152019 comparator peer group was composed of specificthe following peer companies within the energy industry, as well as selected companies representing general industry. This peer group was utilized to determine market levels of total compensation for the 2015 calendar year. The comparator peer group used for our 2015 compensation review, changed slightly2019 plan year and was unchanged from the comparator peer group used for our 2014 compensation review. To modestly adjust the size of the comparator peer group for 2015 so that we were closer to the median in terms of revenue and market capitalization, the Committee removed Murphy Oil Corporation.
Our 2015 comparator peer group consisted of the following companies:2018:
• | 3M Company | • | Anadarko Petroleum Corporation | • | Apache Corporation | • | Baker Hughes Incorporated | • | Caterpillar Inc. | • | ConocoPhillips | • | Deere and Company | • | Emerson Electric Co. | • | Fluor | • | Hess Corporation | •Anadarko Petroleum Corporation | Honeywell International Inc. | •Apache Corporation | Johnson Controls Inc.International plc | •Baker Hughes | National Oilwell Varco, Inc. | •Caterpillar Inc. | Occidental Petroleum Corporation | •ConocoPhillips | Raytheon Co.Company | •Deere and Company | Schlumberger Ltd.Limited | •Emerson Electric Co. | Transocean Ltd. | •Fluor Corporation | Weatherford International Ltd.plc |
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AnalysisBecause of Market Data
Thevariances in market capitalization and revenue size among the companies comprising our comparator peer group, the market data is size adjusted by revenue as necessary so that it is comparable with our trailing 12 monthmonths revenue. We size adjust the total compensation benchmarking data because of variances in market capitalization and revenue size among the companies comprising our comparator peer group. These adjusted values are used as the basis of comparison ofto compare our executives’ compensation between our executives andto those of the comparator peer group.
Total executive compensation for each NEO is structured to target market competitive pay levels in base salary and short- and long-term incentive opportunities. We also place an emphasis on variable pay at risk, which enables this compensation structure to position actual pay above or below the 50thpercentile of our comparator peer group depending on performance. A consistent pre-tax, present value methodology is used in assessing stock-based and other long-term incentive awards, including the Black-Scholes model used to value stock option grants.awards. The independent external compensation consultant gathers and performs an analysis of market data for each NEO, comparing each of their individual components of compensation as well asand total compensation to that of the comparator peer group. This competitive analysis consists of comparing the market data comparingof each of the pay elements and total compensation at the 25th, 50th, and 75thpercentiles of the comparator peer group to current compensation for each of the NEOs.NEO. www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | 32 |
Pay for Performance Analysis As part of the Compensation Committee’s review of our executive compensation program,its analysis, the Committee reviews a one-, three-, and three-yearfive-year pay for performance analysis against our comparatorperformance peer group.group as identified in the section entitled “Long-term Incentives”. The review examines the degree of alignment between our ROCE performance compared to the ROCE performance of our performance peer group and our CEO’s realizable compensation relative to the realizable compensation of the CEOs in our comparator peer group and our Return on Capital Employed, or ROCE, compared to the ROCE of our comparator peer group. ROCE is calculated as follows: ROCE | = | Net income + after-tax interest expense | | Stockholders’ equity (average of beginning and end of period) + Debt | | | | (average of beginning and end of period) | |
Total realizable compensation consisted of the following: • | base salary paid; | | | • | cash incentive payouts; | | | • | In-the-moneyin-the-money value of stock options grants during the one- or three-year period, three-, and five-year periods valued as of December 31, 2014; | | 2018; | • | face value of restricted stock grants during the one- or three-year period, three-, and five-year periods valued as of the December 31, 2014;2018; and | | | • | for performance basedperformance-based awards, (i) target value for awards still outstanding as of December 31, 20142018, and (ii) realized value for performance periods beginning and ending within the one- or three-year period., three-, and five-year periods. |
This analysis demonstratedsupported the following for the period ending December 31, 2014: One-Year HAL Performance | One-Year HAL Total Realizable Compensation | ROCE: | 89thpercentile | CEO: | 89thpercentile | | | | | Three-Year HAL Performance | Three-Year HAL Total Realizable Compensation | ROCE: | 84thpercentile | CEO: | 68thpercentile |
Based on the foregoing analysis, the Committee determinedCommittee’s determination that our pay and performance are appropriately aligned.
The Committee selected ROCE for this analysis because we believe it is the best indicator of long-term Company performance, while reinforcing the Company’s objective for sustained long-term performance and value creation. ROCE measures Company profitability as well as the efficiency by which we deploy capital. It is also a measure that is tracked and understood by our stockholders. The Compensation Committee believes that tying a part of our NEOs long-term incentive opportunity to the achievement of challenging ROCE targets will help to increase revenue and improve margins and maintain focus on cost control. We chose ROCE as a performance measure rather than total shareholder return, or TSR, due to the cyclical nature of our business and because we believe ROCE has a greater line of sight from our management team to impact our financial results.
HALLIBURTON- 2016 Proxy Statement | 28 |
Integration of Compensation Components, Plan Design, and Decision-Making
The Committee considers all elements of the executive compensation package for each NEO for the upcoming year in December. The Committee receives historical and prospective breakdowns of the total compensation components for each NEO as follows:
• | Individual two-year total compensation history, which includes base salary, short- and long-term incentives, and other benefits and perquisites andPay for the CEO, the Committee reviews the pay-for-performance analysis described above;Performance Analysis Periods Ending December 31, 2018 | | | • | Total company-awarded stock position, including vested and unvested awards; | | | • | Detailed supplemental retirement award calculations; and | | | • | The market analysis prepared by the independent, external compensation consultant. |
The Committee also reviews our pay versus performance as well as the results of the advisory vote on executive compensation held at the prior year’s annual meeting and considers those results.
In making compensation decisions, each of the following compensation elements is reviewed separately and collectively:
• | Base salary; | | | • | Short-term (annual) incentives; | | | • | Long-term incentives; and | | | • | Supplemental executive retirement benefits. |
Of these elements, all but base salary are variable and at risk of forfeiture. The Committee uses base salary as the primary reference point for determining the target value and actual value of each of the above elements of compensation, individually and in the aggregate, for each NEO. This assists the Committee in confirming that our compensation package for NEOs is appropriate and competitive to our comparator peer group.
The Committee then considers the following when making final compensation determinations:
• | How compensation elements serve to appropriately motivate and reward each NEO; | | | • | Competitively positioning each NEO’s total compensation to retain their services; | | | • | Individual NEO performance in reaching financial and operational objectives; | | | • | Sustained levels of performance, future potential, time in position, and years of service; and | | | • | Other factors including operational or functional goals as the Committee determines are appropriate. |
These factors are considered on an unweighted basis in making final pay decisions and to ensure internal equity among positions having similar scope and responsibility.
After considering these factors, the Committee then sets the final compensation opportunity for each NEO so that their actual total compensation is consistent with our executive compensation philosophy of paying at the 50thpercentile or higher for those years of superior performance and paying below the 50thpercentile when performance does not meet competitive standards.
The procedures used to set compensation for each of the NEOs are the same. Variations do exist in the amounts of compensation among the NEOs as a result of each NEO’s position and corresponding scope of responsibility, individual performance, length of time in the role, and differences in the competitive market pay levels for their positions.
Generally, in years when we achieve financial results substantially above or below expectations, actual compensation may fall outside the initial targets established by the Committee.
Determination of CEO and NEO Target Total Compensation When determining target total compensation for Mr. Lesar,the CEO, the Committee takes into consideration competitive market pay levels for the CEOs in the comparator peer group. TheyThe Committee also consider Mr. Lesar’sconsiders the CEO’s performance and accomplishments in the areas of business development and expansion, management succession, development and retention of management, ethical leadership, and the achievement of financial and operational objectives. Each year, Mr. Lesarour CEO and the members of the Board agree upon a set of objectives addressing the following areas specified in our corporate governance guidelines:areas: • | Leadership and vision; | | | • | Integrity; | | | • | Keeping the Board informed on matters affecting Halliburton and its operating units; | | Halliburton; | • | Performance of the business; | • | Development and implementation of initiatives that provide long-term economic benefits; | • | Accomplishment of strategic objectives; and | | | • | Development of management. |
| HALLIBURTON | 2020Proxy Statement | 33 |
The Board determined that Mr. LesarMiller met these objectives in 20152019 through the following achievements: LEADERSHIP AND VISION | • | HalliburtonManaged through a seamless CFO and its business units maintained superior relative performance against major competitors in terms of revenue growth and Return on Capital Employed for the 5 year period ending December 31, 2015 (performance of the business);Western Hemisphere leadership transition | | • | Facilitated the addition of two Directors to the Board | | • | Led the organization through the business cycle throughwith effective stakeholder communication;communication and maintained high visibility with employees, investors,shareholders, and customers particularly following the announcement of the pending Baker Hughes acquisition (leadership and vision); |
HALLIBURTON - 2016 Proxy Statement | 29 |
INTEGRITY Maintained unwavering commitment to our Code of Business Conduct KEEPING THE BOARD INFORMED Communicated regularly with the members of the Board providing status reports and notifications on business issues and providing unfettered access to management and subject matter experts PERFORMANCE OF THE BUSINESS | • | Outperformed the OSX, our two largest competitors, and our performance peer group in terms of ROCE over the one-, three-, and five-year periods ending December 31, 2019; delivered superior TSR performance relative to the OSX over the three-, five-, and ten-year periods ending December 31, 2019, and outperformed our two largest competitors and our performance peer group and in terms of TSR for the five- and ten-year period ending December 31, 2019 |
• | Maintained unwavering commitment to our Health, Safety and Environment program. For the third consecutive year, Dow Jones Sustainability Index recognized Halliburton as best in class as it relates to the environment (leadershipprogram |
DEVELOP AND IMPLEMENT INITIATIVES THAT PROVIDE LONG-TERM ECONOMIC BENEFITS | • | Continued Company focus on evolving market trends, first of its kind technology development, and vision);automation | | | • | Continued to expose the next generation of management to the Board, further enhanced management/employee succession process, strengthened diversity initiatives,institutionalize Continuous Improvement which drives profitability, capacity, and focused senior management on talent development initiatives. Our overall Human Capital Development process has been ranked as best in class across all industriesgreater flexibility |
ACCOMPLISHMENT OF STRATEGIC OBJECTIVES | • | Continued our international diversification by the Dow Jones Sustainability Index (development of management);strengthening our international business | | | • | Maintained unwavering commitment to our Code of Business Conduct and continued to act in a role model capacity as it relates to ethical behavior (integrity); | | | • | Communicated regularly with the membersExecuted key integration initiatives across multiple segments of the Board providing status reports and notification of issues of concern and provided unfettered access to management and subject matter experts (keeping the Board informed); and | | | • | Continued to work toward the closing of the pending Baker Hughes acquisition, including finalizing all regulatory filings, completing the divestiture proposals, and preparing for integration activities (accomplishment of strategic objectives).business |
DEVELOPMENT OF MANAGEMENT Exposed the next generation of management to the Board, further enhanced the management/employee succession process, and focused senior management on talent development and diversity initiatives Other NEO compensation is determined similar to that of the CEO by evaluating each NEO’s performance and considering the market competitive pay levels of the comparator peer group for the NEO’s position. The Compensation Committee also considers the importance of keeping our management team focused and stable, especially given that other oilfield services companies have aggressively recruited our NEOs and other executives in the past. In fact, over thirty of our former executives have departed to become CEOs and/or senior executives of other oilfield services companies. www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | 34 |
2019 Executive Compensation Outcomes Base Salary The Committee generally targets base salaries at the median of the comparator peer group; however, thegroup. The Committee also considers the following factors when setting base salary: • | Level of responsibility; | | | • | Experience in current role and equitable compensation relationships among internal peers; | | | • | Performance and leadership; and | | | • | External factors involving competitive positioning, general economic conditions, and marketplace compensation trends. |
No specific formula is applied to determine the weight of each factor. Salary reviews are conducted annually to evaluate each executive; however, individualexecutive. Individual salaries are not necessarily adjusted each year. The Committee approved the following base salariessalary adjustments effective January 1, 2015: | | 2014 | | | 2015 | | | | | NEO | | Salary | | | Salary | | | % Increase | | Mr. Lesar | | $ | 1,630,000 | | | $ | 1,750,000 | | | | 7.4% | | Mr. Garcia(1) | | $ | 380,000 | | | $ | 450,000 | | | | 18.4% | | Mr. Brown | | $ | 820,000 | | | $ | 900,000 | | | | 9.8% | | Mr. Miller(2) | | $ | 1,000,000 | | | $ | 1,000,000 | | | | 0% | | Mr. Rainey | | $ | 788,000 | | | $ | 835,000 | | | | 6.0% | |
(1) | The salary increase was in recognition of Mr. Garcia’s promotion to Senior Vice President of Finance, and Acting Chief Financial Officer. | | | (2) | Mr. Miller did not receive a salary increase on January 1, 2015 as his salary was determined to be aligned with the market. |
In an effort to help manage fixed costs during the downturn, all our NEOs took a voluntary reduction in base salary on April 1, 2015. Mr. Lesar took a 6.9% reduction in his base salary and all other NEO’s took a 3% reduction. The column 2015 Salary above does not reflect these salary reductions.
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Short-term (Annual) Incentives
The Committee established the Annual Performance Pay Plan to:2019:
• | Reward executives and other key membersMr. Miller received a 7.1% increase in annual base salary ($1,400,000 to $1,500,000) to align his base salary with the market median of management for improving financial results that drive the creation of economic value for our stockholders; and | | comparator peer group; | • | ProvideMr. Loeffler received a means73.3% increase in annual base salary ($375,000 to connect individual cash compensation directly$650,000) in recognition of his promotion to CFO in November 2018. While this adjustment was significant, it still positions Mr. Loeffler’s salary below the market median for a CFO role. As per its normal practice, the Committee intends to bring Mr. Loffler’s base salary to the market median over a multi-year period. | • | Mr. Carre received a 6.7% increase in annual base salary ($750,000 to $800,000) to position his base salary at the market median of our performance.comparator peer group; and | • | Mr. Rainey received a 4.0% increase in annual base salary ($875,000 to $910,000) based on performance and internal equity. |
The Committee approved the following base salary adjustments effective February 1, 2019: Mr. Richard received a 16.0% increase in annual base salary ($625,000 to $725,000) in recognition of his promotion to President – Western Hemisphere. Mr. Richard’s salary is still positioned below the market median for his role. The Committee intends to bring Mr. Richard’s base salary to the market median over a multi-year period. At its regular December 2019 meeting, the Compensation Committee determined that base salaries for our NEOs would remain unchanged for 2020, with the exceptions of Messrs. Loeffler and Richard, both of whom received the second half of their two-year promotion-related increases. Short-term (Annual) Incentive The Annual Performance Pay Plan providesis designed to reward executives and other key members of management for performance awardsimproving financial results that drive the creation of economic value for our shareholders and provide a means to connect individual cash compensation directly to our performance. It is administered in accordance with the terms of the Stock and Incentive Plan. The Annual Performance Pay Plan provides an incentive to our NEOs to achieve the business objective of generatinggenerate more earnings than normally expected by the investors who have provided us with capital to grow our business. We measureFor 2019, we measured achievement of this objective using Cash Value Added, or CVA. CVA is a financial measurement that demonstrates the amount of economic value added to our business. The formula for calculating CVA is as follows: Operating Income
| + Interest Income | | + Foreign Currency Gains (Losses) | | + Other Nonoperating Income (Expense), Net | = | Net Operating Profit | | – Income Taxes | = | Net Operating Profit After Taxes | | | Net Invested Capital | x Weighted Average Cost of Capital | = | Capital Charge |
Cash Value Added (CVA) = Net Operating Profit After Taxes - Capital ChargeThe Committee selected CVA for our Annual Performance Pay Plan because it is a key financial measure on which we set our performance expectations for the year and we believe it is a proven driver of value creation for shareholders. However, the Committee also considers other business performance factors that are important to our investors, including health, safety, environment, and service quality, in determining the final payout amounts under the Annual Performance Pay Plan.
Net Operating Profit After Taxes equals the sum of operating income plus interest income plus foreign currency gains (losses) plus other nonoperating income (expense), reduced by our income taxes. When determining actual CVA performance, we apply our effective income tax rate.
Capital Charge equals total assets (excluding deferred income tax assets) less total liabilities (excluding debt and deferred income tax liabilities) multiplied by a weighted average cost of capital percentage.
Cash Value Added is computed monthly and accumulated throughout the calendar year. Adjustments in the calculation of the CVA payout may, at times, be approved by the Committee and can include the treatment of unusual items that may have impacted our actual results.
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At the beginning of each plan year, the Committee approves an incentive award schedule that equates given levels of CVA performance with varyingcash reward opportunities paid in cash.opportunities. The performance goals range from “Threshold” to “Target” to “Maximum.”“Maximum”. Threshold reflects the minimum CVA performance level which must be achieved in order for awardsany award to be earned and Maximum reflects the maximum levelawards that can be earned. TheseThe performance goals are based on our annual operating plan, as reviewed and approved by our Board, and are set at levels believed to be sufficient to meet or exceed stockholdershareholder expectations of our performance, as well as expectations of the relative performance to our competitors. Given the cyclical nature of our business, our performance goals vary from year to year, which can similarly impact the difficulty in achieving thesethe goals.
CVA is computed monthly and aggregated throughout the calendar year. Adjustments in the calculation of CVA may, at times, be approved by the Committee and can include the treatment of unusual items that may have impacted our actual results. The Committee set the 20152019 performance goals for our NEOs based on company-wide consolidated CVA results. Threshold CVA was based on 90% of planned operating income,Operating Income, Target CVA on 100% of planned operating income,Operating Income, and Maximum CVA on 110% of planned operating income.Operating Income. The Committee set the 2015 performance2019 award levels, targeted to the market median, for our NEOs based on the company-wide consolidated CVA results:results. The performance goals for the 2019 plan year are noted in the table below: Metric | | | | Threshold | | | | Target | | | | Maximum | | | | Actual | | CVA | $5 M | $57 M | $238 M | -$8922,208 M | | | | -$692 M | | | | -$492 M | | | | -$1,118 M | |
Because the 2015 CVA actual results were below Threshold, our NEOs did not receive a CVA payout.
The Compensation Committee has selected CVA as the sole measure upon which to base our short-term incentive program because it is a key measure on which we set our performance expectations for the year and we believe that CVA is a proven driver of value creation for stockholders of the Company.
The Compensation Committee considers other business performance factors, including health, safety, and environment and service quality, in determining the final payout amounts under the Annual Performance Pay Plan.
Individual incentive award opportunities are established as a percentage of base salary at the beginning of the plan year.year based on market competitive targets. The maximum amountaward a NEO can receive is limited to two times the target opportunity level. The level of achievement of annual CVA performance determines the dollar amount of incentive compensation payable to participants following completion of the plan year. HALLIBURTON - 2016 Proxy Statement | 31 |
The Committee set incentive award opportunities under the plan as follows: | | | Threshold | | | Target | | | Maximum | | NEO | | | Opportunity | | | Opportunity | | | Opportunity | Threshold | Target | Maximum | Mr. Lesar | | | 60% | | | 150% | | | 300% | | Mr. Garcia | | | 30% | | | 75% | | | 150% | | Mr. Brown | | | 44% | | | 110% | | | 220% | | Mr. Miller | | | 50% | | | 125% | | | 250% | 60% | 150% | 300% | Mr. Loeffler | | 40% | 100% | 200% | Mr. Carre | | 40% | 100% | 200% | Mr. Rainey | | | 44% | | | 110% | | | 220% | 44% | 110% | 220% | Mr. Richard | | 44% | 110% | 220% |
Threshold, Target, and Maximum opportunity dollar amounts can be found in the Grants of Plan-Based Awards in Fiscal 20152019 table. Because the 2019 CVA actual results were below Threshold, our NEOs did not receive a CVA payout. Over the past ten years, the Annual Performance Pay Plan achieved Maximum performance levels five times, achieved Target performance levellevels two times, and fell short of the Threshold performance level three times.times, resulting in no payout. Long-termLong-Term Incentives
The Committee established the Stock and Incentive Plan is designed to achieve the following objectives: • | Rewardreward consistent achievement of value creation and operating performance goals; | | | • | Align management with stockholder interests; and | | | • | Encourage long-term perspectives and commitment. |
Our Stock and Incentive Plan provides for a variety of cashoperating performance goals, align management with shareholder interests, and stock-based awards, including nonqualifiedencourage long-term perspective and incentive stock options, restricted stock and units, performance shares and units, stock appreciation rights, and stock value equivalents. Under the Stock and Incentive Plan, the Committee may, at its discretion, select from among these types of awards to establish individual long-term incentive awards.
commitment. Long-term incentives represent the largest component of total executive compensation opportunity. We believe this at-risk based compensation ties executive pay closely to stockholders’ interests. For 2015, we used a combination of long-term incentive vehicles, including time-based restricted stock or restricted stock units, performance units, and nonqualified stock options. Except where there is a distinction to make between restricted stock and restricted stock units, this Compensation Discussion and Analysis refers to both restricted stock and restricted stock units as “restricted stock”. In response to stockholder feedback, we modified our long-term incentive mix from 40% performance units, 40% restricted stock, and 20% stock options to weight it more heavily towards performance units. In 2015, our operations-based incentives in the form of performance units were targeted to 50% of the long-term incentive value, another 35% was delivered through restricted stock, and the remaining 15% was delivered in stock options.
Using a mix of incentivesincentive vehicles allows us to provide a diversified yet balanced long-term incentive program that effectively addresses volatility in our industry and in the stock market, in addition to maintaining an incentive to meet performance goals. Value to be earned by a NEO from stock options and restricted stock are directly tied to our stock price performance and, therefore, directly to stockholder value. Additionally, restricted stock provides a significant retention incentive whileFor the 2013 cycle Performance Unit Program motivates the NEOs to also focus on improving long-term returns on capital employed, measured on both absolute and relative bases. Because of the pending acquisition of Baker Hughes Incorporated,2019 plan year, the Committee decided to modifyused the Performance Unit Programfollowing combination of equity vehicles for the 2015 cycle, as described in the 2015 Cycle Performance Unit Program Opportunities for NEOs section below.long-term incentive grants: Vehicle | Weighting | Purpose | Performance Units | 50% of Award | Rewards achievement of specific financial goals measured over a three-year performance period | Restricted Stock(1) | 35% of Award | Supports leadership retention/stability objectives; five-year vesting period | Stock Options(2) | 15% of Award | Rewards for stock price appreciation; three-year vesting period |
(1) | Restricted stock grants are generally subject to a graded vesting schedule of 20% per year over five years. However, different vesting schedules may be utilized at the discretion of the Committee. Shares of restricted stock receive dividend or dividend equivalent payments. | (2) | Stock option awards vest over a three-year graded vesting period with 33 1/3% of the grant vesting each year. All options are priced at the closing stock price on the date the grant is approved by the Committee. |
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In determining the size of long-term incentive awards, the Committee first considers market data for comparable positions and then may adjust the awards upwards or downwards based on the Committee’s review of internal equity. This can result in positions of similar magnitude and pay receiving awards of varying size. The 2015 restricted stock and stock option awards for each NEO were based primarily on market data and wereAwards are targeted to the market median. Restricted Stock and Stock Options
OurAs part of its process, the Compensation Committee makes decisions about target long-term incentive award opportunities for the following year during its regular December meeting. For the 2019 plan year, the Compensation Committee approved restricted stock and stock option awards are granted under the Stock and Incentive Plan and are listedgrants in the Grants of Plan-Based Awards in Fiscal 2015 table.
RestrictedDecember 2018. Exercise prices for stock grants are generally subject to a graded vesting schedule of 20% per year over five years. However, different vesting schedules may be utilized at the discretion of the Committee. Shares of restricted stock receive dividend or dividend equivalent payments.
Stock option awards vest over a three-year graded vesting period with 331/3%of the grant vesting each year. All options are pricedset at the closing stock price on the date the grant is approved.
For the 2020 plan year, grants of restricted stock for NEOs were approved by the Committee.Compensation Committee at its December 2019 meeting using the new equity mix (70% performance units and 30% restricted stock). We also added a TSR modifier that increases or decreases the long-term incentives payout based on our relative TSR performance. Stock Options were eliminated for NEOs beginning with the 2020 plan year. 2017 Cycle Performance Unit Program The stock and option award columns in the Summary Compensation Table reflect the aggregate grant date fair value of the restricted stock and option awards for each NEO. HALLIBURTON - 2016 Proxy Statement | 32 |
2013 Cycle Performance Unit Program Payout for NEOs
The 20132017 cycle Performance Unit Program provides NEOs and other selected executives with incentive opportunities based on our consolidated Return on Capital Employed, or ROCE during a three-year performance period. This program reinforces our objectives for sustained long-term performance and value creation. It also reinforces strategic planning processes and balances short- and long-term decision making.
Based on feedback from our shareholders and to more closely align with our strategy of delivering industry-leading returns across the business cycle, in 2015, we modified the metrics in our Performance Unit Program to 100% relative ROCE. The program measures ROCE on both an absolute and a relative basis to the results of our comparatorperformance peer group companies used for the Performance Unit Program. The three-year performance period aligns this measurement with our and our comparatorperformance peer group’s business cycles. ROCE indicates the efficiency and profitability of our capital investments and is determined based on the ratio of earnings divided by average capital employed. The formula for ROCEcalculation is set forth in the Pay for Performance Analysis section.as follows: Why ROCE? | | Highly correlated to stock price performance over thelong-term, applying drivers that management can directlyinfluence. | | | Overwhelmingly supported by our shareholders. | | Aligned with our strategy of delivering industry-leadingreturns across the business cycle. | | | Eliminates the subjectivity inherent in setting long-termabsolute targets in a cyclical industry. | | Reinforces the Company’s objective for sustained long-termperformance and value creation. | | | Provides our management team with clear line of sight tolong-term financial results. |
The comparatorperformance peer group used for the Performance Unit Program is comprised of oilfield equipment and serviceservices companies and domestic and international exploration and production companies. This comparator peer group is used for the Performance Unit Program because these companies represent the timing, cyclicality, and volatility of the oil and natural gas industry and provide an appropriate industry group to measurefor measuring our relative performance against. This comparatorperformance. The peer group, as disclosed in our 20142018 proxy statement, was used for the 20132017 cycle of the Performance Unit Program. The 2013table below shows the incentive opportunity based on Halliburton’s ROCE performance relative to that of our performance peer group. The 2017 cycle of the Performance Unit Program ended on December 31, 2015. Both2019, and we achieved ROCE of 3.36%, which was above the absolute75thpercentile of our performance peer group’s ROCE of 1.28% and relative performance measures established at the beginning of the cycle were approved by the Committee. The Committee decided to exclude any Baker Hughes acquisition and integration related expenses from the calculation because the transaction and the associated costs were not anticipated when the targets were initially set in February 2013. The 2013 cycle of the Performance Unit Program yielded an award paid at 125%200% of the target opportunity level as shown in the table below.level. | HALLIBURTON | 2020Proxy Statement | 37 |
2017 Cycle -– Performance Matrix HAL 3-Year Average ROCE | | % of Target Incentive Paid | Above 13% | | | 75% | | | | 100% | | | | 150% | | | | 200% | | 11% to 13% | | | 50% | | | | 75% | | | | 125% | | | | 150% | | 9% to < 11% | | | 0% | | | | 50% | | | | 100% | | | | 125% | | Below 9% | | | 0% | | | | 0% | | | | 50% | | | | 75% | | Absolute↑ | | | Less than | | | | 25thto | | | | 50thto | | | | Above 75th | | | | | 25th | | | | 49th | | | | 75th | | | | Percentile | | | | | Percentile | | | | Percentile | | | | Percentile | | | | | |
While we achieved average ROCE of 9.09% for the three-year period ending December 31, 2015, which was top quartile performance relative to our performance peers, the ROCE performance as measured on an absolute basis was below the target level of 11%.
Halliburton Ranking vs. Performance Peer Group | Threshold 25thPercentile | Target 50thPercentile | Maximum 75thPercentile | Incentive Opportunity as a % of Target | 25% | 100% | 200% |
The NEOs received these payments in 20162020 as set forth in the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table and in the related narrative following the table. Table. The program allows for rewards to be paid in cash, stock, or a combination of cash and stock. Over the past ten years, the program has achieved maximum performance levels six times and between maximum and target four times. 20152019 Cycle Performance Unit Program Opportunities for NEOs
In anticipation ofThe Committee set the pending Baker Hughes acquisition,performance measures on a 100% relative ROCE basis for the Committee modified the 20152019 cycle of the Performance Unit Program, and replaced the 50% relative and 50% absolute ROCE measures with quantitative Baker Hughes integration related metrics. This was done in order to keep management’s focus on the integration prior to, during, and post acquisition. In revising the 2015 cycle Performance Unit Program, the Committee used two equally weighted performance metrics based on: (i) the cumulative integration cost synergies realized through December 31, 2017, and (ii) a target for the combined company’s effective tax rate as of December 31, 2017. The Committee provisionally determined that if we did not acquire Baker Hughes, the 2015 cycle of the Performance Unit Program would be based on 100% relative ROCE measures with relative performance measured for the three-year period ending December 31, 2017 against2021.
The performance peer group for the following2019 cycle Performance Unit Program is the same as the performance peer group which remains unchanged fromused for the 20142018 cycle Performance Unit Program peer group:and consists of the following companies: • | Anadarko Petroleum Corporation | | | • | Apache Corporation | | | • | Baker Hughes Incorporated | | | • | Cameron International Corporation | | | • | Chesapeake Energy Corporation | | | • | Devon Energy Corporation | | | • | Hess Corporation | | | • | Marathon Oil Corporation | | | • | Murphy Oil Corporation |
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• | Nabors Industries Ltd. | | | •Apache Corporation | National Oilwell Varco, Inc. | Baker Hughes | Schlumberger Limited | •Chesapeake Energy Corporation | Schlumberger Ltd.Superior Energy Services, Inc | Devon Energy Corporation | TechnipFMC | •Hess Corporation | Transocean Ltd. | | | •Marathon Oil Corporation | Weatherford International Ltd.plc | | | •Murphy Oil Corporation | The Williams Companies, Inc. |
DueAt the end of the three-year performance period, the ROCE of the Company and the performance peer group will be calculated and percentiles will be determined. The table below details the incentive opportunity based on Halliburton’s performance relative to their competitive nature, we do not disclose prospective metric targets.the performance peer group. If Halliburton’s relative performance ranking is below the 25thpercentile, there will be no payment. If Halliburton’s relative performance ranking is between the 25th, 50th, and 75thpercentiles, the payout will be interpolated accordingly.
2019 Cycle – Performance Matrix Halliburton Ranking vs. Performance Peer Group | Threshold 25thPercentile | Target 50thPercentile | Maximum 75thPercentile | Incentive Opportunity as a % of Target | 25% | 100% | 200% |
Individual incentive opportunities are established based on market references and the NEO’s role within the organization. The Threshold, Target, and Maximum columns under the heading Estimated Future Payouts Under Non-Equity Incentive Plan Awards in the Grants of Plan-Based Awards in Fiscal 20152019 table indicate the potential payout for each NEO under the Performance Unit Program for the 20152019 cycle. The potential payouts are performance driven and completely at risk. Actual payout amounts, if any, will not be determined until the three-year cycle closes on December 31, 2017.2021. Supplemental Executive Retirement Plan The objective of the Supplemental Executive Retirement Plan, or SERP, is to provide a competitive level of pay replacement upon retirement. The current pay replacement target is 75% of final base salary at age 65 with 25 years of service.service, using the highest annual salary during the last three years of employment. The material factors and guidelines considered in making an allocation include: (i) retirement benefits provided, both qualified and nonqualified; (ii) current compensation; (iii) length of service; and (iv) years of service to normal retirement. • | Retirement benefits provided, both qualified and nonqualified; | | | • | Current compensation; | | | • | Length of service; and | | | • | Years of service to normal retirement. |
The calculation takes into account the following variables: (i) base salary; (ii) years of service; (iii) age; (iv) employer portion of qualified plan savings; (v) age 65 value of any defined benefit plan; and (vi) existing nonqualified plan balances and any other retirement plans. • | Base salary; | | | • | Years of service; | | | • | Age; | | | • | Employer portion of qualified plan savings; | | | • | Age 65 value of any defined benefit plan; and | | | • | Existing nonqualified plan balances and any other retirement plans. |
Several assumptions are made annually and include a base salary increase percentage, qualified and nonqualified plan contributions and investment earnings, and an annuity rate. These factors are reviewed and approved annually by the Committee in advance of calculating any awards. www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | 38 |
To determine the annual benefit, external actuaries calculate the total lump sum retirement benefit needed at age 65 from all company retirement sources to produce an annual retirement benefit of 75% of final base salary.highest annual salary during the last three years of employment. Company retirement sources include any Company contributions to qualified benefit plans and contributions to nonqualified benefit plans. If the combination of these two sources does not yield a total retirement balance that will meet the 75% objective, then contributions may be made annually through the SERP to bring the total benefit up to the targeted level. To illustrate, assume $10 million is needed at age 65 to produce an annual retirement benefit equal to 75% of final base salary. The participant is projected to have $3 million in his qualified benefit plans resulting from Company contributions at retirement and $4 million in his nonqualified retirement plans resulting from Company contributions at retirement. Since the total of these two sources is $7 million, a shortfall of $3 million results. This is the amount needed to achieve the 75% pay replacement objective. SuchThis shortfall may be offset through annual contributions to the SERP. Participation in the SERP is limited to the direct reports of the CEO and other selected executives as recommended by the CEO and approved at the discretion of the Committee. However, participation one year does not guarantee future participation. In 2015,2019, the Committee authorized retirement allocations under the SERP to all NEOs as listed in the 2015Supplemental Table: All Other Compensation and the 2019 Nonqualified Deferred Compensation table and as included in the All Other Compensation column in the Summary Compensation Table. The average annual amounts allocated over the history of participation are as follows: Mr. Lesar: $353,682; Mr. Garcia: $221,000; Mr. Brown: $521,875; Mr. Miller: $474,250; and Mr. Rainey: $436,500.table. All of the NEOs, except Mr. Loeffler, are fully vested in their respective account balances. Balances for active and terminated participants earn interest at an annual rate of 5% and 10%, respectively. Other Executive Benefits and Policies Retirement and Savings Plan All NEOs may participate in the Halliburton Retirement and Savings Plan, which is the defined contribution benefit plan available to all eligible U.S. employees. The matching contributionscontribution amounts we contributed on behalf of each NEO are included in the Supplemental Table: All Other Compensation immediately following the Summary Compensation Table.Compensation. HALLIBURTON - 2016 Proxy Statement | 34 |
Elective Deferral Plan All NEOs may participate in the Halliburton Elective Deferral Plan, which was established to provide highly compensated employees with an opportunity to defer earned base salary and incentive compensation in order to help meet retirement and other future income needs. The Elective Deferral Plan is a nonqualified deferred compensation plan and participation is completely voluntary. Pre-tax deferrals ofParticipants may elect to defer up to 75% of their annual base salary and/or eligibleand up to 75% of their incentive compensation into the plan. Deferral elections must be made on an annual basis, including the type and timing of distribution. Plan earnings are allowed each calendar year. Gains or losses are credited based uponon the participant’s election from amongNEO’s choice of up to 12 benchmark investment choicesoptions with varying degrees of risk.risk, including the risk of loss. Investment options may be changed by the NEO daily.
In 2015, Messrs. Lesar and Rainey2019, none of our NEOs participated in this plan by deferring a percentage of their compensation. Mr. Brown has anplan. Messrs. Rainey and Richard have account balancebalances from participation in the plan in prior years. Messrs. GarciaMiller, Loeffler, and MillerCarre are not participants in the plan. Further details can be found in the 20152019 Nonqualified Deferred Compensation table. Benefit Restoration Plan The Halliburton Company Benefit Restoration Plan provides a vehicle to restore qualified plan benefits which are reduced as a result of limitations on contributions imposed under the Internal Revenue Code or due to participation in other plans we sponsor. It also servessponsor and to defer compensation that would otherwise be treated as excessive employee remuneration within the meaning of Section 162(m) of the Internal Revenue Code. Awards are made annually to those who meet these criteria and earned interest at an annual rate as defined by the plan document. Awards and corresponding interest balances are 100% vested and distributed upon separation. In 2015,accordance with the plan document, participants earn monthly interest at the 120% AFR rate, provided the interest rate shall be no less than 6% per annum or greater than 10% per annum. Because the 120% AFR rate was below the 6% minimum interest threshold, plan participants earned interest at an annual rate of 6% in 2019. In 2019, all NEOs received awards under this plan in the amounts included in the Supplemental Table: All Other Compensation and the 20152019 Nonqualified Deferred Compensation table. | HALLIBURTON | 2020Proxy Statement | 39 |
Perquisites CountryEffective January 1, 2019, we eliminated several perquisites including tax gross ups for personal use of corporate aircraft, executive physical examinations, and financial planning reimbursements. We also eliminated reimbursements for country club memberships are limited and provided on an as-needed basisdues for business purposes only. Mr. Brown had a club membership in 2015.all of our NEOs.
We do not provide cars to our NEOs. However, a car and part-time driver is available for Mr. Miller’s limited use as needed for security purposes and so that he can work while in transit to allow for the efficient use of Mr. Lesar’s time, a company-leased car and part-time driver are provided for Mr. Lesar for the primary purpose of commuting to and from work. A taxable benefit for executive financial planning is provided with the amount dependent on the NEO’s level within the company. This benefit does not include tax return preparation. It is paid, only if used, on a reimbursable basis.meet customers or attend business-related functions.
We also provided for security at the personal residences of Messrs. Lesar, Garcia,Miller and MillerLoeffler during 2015.2019. At the directionAs a result of the recommendations provided by an independent, third-party security consultant, the Board has determined that Mr. Lesar,Miller must use company aircraft for all travel. The security study also recommends that his spouse and children use company aircraft for all travel.company-provided aircraft. The only personal use of the company aircraft in 20152019 for other NEOs is for spousal and dependent travel on select business trips.
Mr. Rainey is an expatriate under our long-term expatriate business practice and as such receives certain assignment allowances including a goods and services differential and host country housing and utilities. practice. A differential is commonly paid to expatriates in assignment locations where the cost of goods and services is greater than the cost for the same goods and services in the expatriate’s home country. Differentials are determined by Mercer/ORC, a third-party consultant. As part of his expatriateMr. Rainey receives certain assignment Mr. Raineyallowances, including a goods and services differential and host country housing and utilities. He also participates in our tax equalization program, which neutralizes the tax effect of the international assignment and approximates the tax obligation the expatriate would pay in his home country. Specific amounts for the above mentionedabove-mentioned perquisites are detailed for each NEO in the Supplemental Table: All Other Compensation. Clawback Policy We have a clawback policy under which we will seek to recoup incentive compensation in all appropriate cases paid to, awarded, to, or credited for the benefit of any of our executive officers, which include all the NEOs, if and to the extent that: • | The amount of incentive compensation was calculated based on the achievement of financial results that were subsequently reduced due to a restatement of our financial results; | | | • | The officer engaged in fraudulent conduct that caused the need for the restatement; and | | | • | The amount of incentive compensation that would have been paid to, awarded, or paid tocredited for the benefit of the officer, had our financial results been properly reported, would have been lower than the amount actually paid, awarded, or awarded.credited. |
Any such officer who receives incentive compensation based on the achievement of financial results that are subsequently the subject of a restatement will not be subject to recoupment unless the officer personally participates in the fraudulent conduct.
In addition, in January 2013, we amended theThe policy to providealso provides that we will seek to recoup incentive compensation in all appropriate cases paid to, awarded to, or credited for the benefit of any of our executive officers, which include all the NEOs, and certain other senior officers, if and to the extent that:
• | It is determined that, in connection with the performance of that officer’s duties, he or she substantially participated in a breach of abreached his or her fiduciary duty arising fromby knowingly or recklessly engaging in a material violation of a U.S. federal or state law, or both (A) had direct supervisory responsibility overfailed to supervise an employee who substantially participated in such a violation and (B) recklessly disregarded hisviolation; or her own supervisory responsibilities; or | | | • | theThe officer is named as a defendant in a law enforcement proceeding for having substantially participated in a breach of abreached his or her fiduciary duty arising fromby knowingly or recklessly engaging in a material violation of a U.S. federal or state law, the officer disagrees with the allegations relating to the proceeding, and either (A)(i) we initiate a review and determine that the alleged action is not indemnifiable or (B)(ii) the officer does not prevail at trial, enters into a plea arrangement, agrees to the entry of a final administrative or judicial order imposing sanctions, or otherwise admits to the violation in a legal proceeding. |
Depending on the officer and the circumstances described in the immediately preceding paragraph, theThe disinterested members of the Board and the disinterested members of the Compensation Committee the disinterested members ofand the Nominating and Corporate Governance Committee and/or the members of a management committee may be
HALLIBURTON - 2016 Proxy Statement | 35 |
involved in reviewing, considering, and making determinations regarding the officer’s alleged conduct, whether recoupment is appropriate or required, and the type and amount of incentive compensation to be recouped from the officer. The policy also provides that, to the extent permitted by applicable law and not previously disclosed in a filing with the SEC, we will disclose in our proxy statement the circumstances of any recoupment arising under the policy or that there has not been any recoupment pursuant to the policy for the prior calendar year. There was no recoupment under the policy in 2015.2019. www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | 40 |
Stock Ownership Requirements We have stock ownership requirements for our executive officers, which include all the NEOs, to further align their interests with our stockholders.shareholders. As a result, Mr. LesarOur CEO is required to own Halliburton common stock in an amount equal to or in excess of six times his annual base salary. Executive officers that report directly to Mr. Lesarthe CEO are required to own an amount of Halliburton common stock equal to or in excess of three times their annual base salary, and all other executive officers are required to own an amount of Halliburton common stock equal to or in excess of two times their annual base salary. The Committee reviews their holdings, which include restricted shares and all other Halliburton common stock owned by the officer, at each December meeting. Each executive officer has five years to meet the requirements, measured from the later of September 12, 2011 or the date the officer first becomes subject to the ownership level for the applicable office.
After the five-year stock ownership period, as described above, executive officers who have not met their minimum ownership requirement must retain 100% of the net shares acquired upon stock option exercises and restricted stock vesting until they achieve their required ownership level. During this time period, any stock option exercisesexercise must be an exercise and hold. As of December 31, 2015,2019, all NEOs met the requirements. Hedging and Pledging Policy OurWe have a policy under which our Directors and executive officers, which include all NEOs, and certain senior officers are prohibited fromfrom:
• | hedging activities related to Halliburton securities; and | • | the pledging of Halliburton securities. |
The policy defines hedging activities as the use of any financial instrument designed to hedge or offset a change in the market value of any Halliburton security, and defines pledging as the use of a Halliburton security or any related to Halliburton securities andderivative security as collateral for any form of indebtedness. Additionally, the pledging of Halliburton securities, except that hedging activities in connection with or related to a bona fide charitable donation may be approved in advance at the sole discretion of the General Counsel.policy: • | discourages all employees and Directors from speculative activities in Halliburton securities and related derivative securities, such as puts or call options; | • | applies to all Halliburton securities, including restricted stock, restricted stock units, options, and debt securities, which are issued by any Halliburton entity, and any other security directly or indirectly exercisable for or convertible or exchangeable into any Halliburton security; and | • | applies regardless of whether or not the securities were acquired from our equity compensation plans. |
Elements of Post-Termination Compensation and Benefits Termination events that trigger payments and benefits include normal or early retirement, cause, death, disability, and voluntary termination. Post-termination or change-in-control payments may include severance, accelerated vesting of restricted stock and stock options, maximum payments under cash-based short- and long-term incentive plans, payout of nonqualified account balances, and health benefits, among others. The Post-Termination or Change-In-Control Payment table in this proxy statement indicates the impact of various events on each element of compensation for the NEOs.NEOs is detailed in the Post-Termination or Change-In-Control Payment table. Impact of Regulatory Requirements on Compensation Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation paid to the CEO, CFO, or any of the fourthree other most highly compensated officers to the extent the compensation exceeds $1 million in any year. QualifyingEffective for tax years beginning after December 31, 2017, Section 162(m) has been revised to eliminate the performance-based compensation is not subjectexception. Prior to this limit if certain requirements are met. change in the tax law, our Stock and Incentive Plan enabled qualification of stock options, stock appreciation rights, and performance share awards, as well as short- and long-term cash performance plans under Section 162(m). Our policy is to utilize available tax deductions whenever appropriate and consistent with our compensation philosophy. When designing and implementing our executive compensation programs, we considerprogram, the Committee considers all relevant factors, including tax deductibility of compensation. Accordingly, we have attempted to preservecompensation, and will consider the federal tax deductibility of compensation in excess of $1 million a year to the extent doing so is consistent with our executive compensation objectives; however, we may from time to time pay compensation to our executives that may not be fully deductible. Our Stock and Incentive Plan enables qualification of stock options, stock appreciation rights, and performance share awards as well as short- and long-term cash performance plans under Section 162(m).
To the extent required by Section 304 of the Sarbanes-Oxley Act of 2002, we will make retroactive adjustments to any cash or equity-based incentive compensation paid to the CEO and CFO where the payment was predicated upon the achievement of certain financial results that were subsequently the subject of restatement. When and where applicable, we will seek to recover any amount determined to have been inappropriately received by the CEO and CFO.objectives.
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COMPENSATION COMMITTEE REPORTExecutive
We have reviewed and discussed the Compensation Discussion and Analysis with Company management and, based on such review and discussions, we recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
THE COMPENSATION COMMITTEE
James R. Boyd
Milton Carroll
Murry S. Gerber
Robert A. Malone
Debra L. Reed
HALLIBURTON - 2016 Proxy StatementTables | 37 |
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLESummary Compensation Table
The following tables set forth information regarding theour CEO, CFO, and our three other most highly compensated executive officers for the fiscal year ended December 31, 2015.2019. | | | | | | | | | | | | | | Change In | | | | | | | | | | | | | | | | | Non-Equity | | Pension Value | | | | | | | | | | | | | Stock | | Option | | Incentive Plan | | and NQDC | | All Other | | | Name and | | | | Salary | | Bonus | | Awards | | Awards | | Compensation | | Earnings | | Compensation | | Total | Principal Position | | Year | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | David J. Lesar | | 2015 | | 1,660,000 | | 0 | | 3,867,735 | | 2,103,341 | | 5,999,513 | | 299,127 | | 1,941,613 | | 15,871,329 | Chairman of the Board and | | 2014 | | 1,630,000 | | 0 | | 3,912,000 | | 2,178,163 | | 10,872,600 | | 269,185 | | 1,698,209 | | 20,560,157 | Chief Executive Officer | | 2013 | | 1,630,000 | | 0 | | 4,793,714 | | 2,381,533 | | 10,180,804 | | 155,196 | | 1,723,967 | | 20,865,214 | Christian A. Garcia | | 2015 | | 439,875 | | 0 | | 701,100 | | 381,669 | | 217,564 | | 8,489 | | 363,494 | | 2,112,191 | Senior Vice President, | | | | | | | | | | | | | | | | | | | Finance and Acting Chief Financial Officer(1) | | | | | | | | | | | | | | | | | | | James S. Brown | | 2015 | | 879,750 | | 0 | | 1,281,455 | | 697,943 | | 1,634,785 | | 101,969 | | 1,360,886 | | 5,956,788 | President – Western | | 2014 | | 820,000 | | 0 | | 1,304,000 | | 727,685 | | 3,482,000 | | 79,934 | | 986,492 | | 7,400,111 | Hemisphere | | 2013 | | 788,000 | | 0 | | 1,579,344 | | 785,785 | | 2,743,666 | | 57,834 | | 992,489 | | 6,947,118 | Jeffrey A. Miller | | 2015 | | 977,500 | | 0 | | 2,169,515 | | 1,179,488 | | 2,218,718 | | 30,615 | | 1,084,536 | | 7,660,372 | President | | 2014 | | 912,500 | | 0 | | 5,639,516 | | 1,407,673 | | 2,114,375 | | 14,428 | | 892,290 | | 10,980,782 | | | 2013 | | 800,000 | | 0 | | 1,933,684 | | 961,939 | | 1,565,460 | | 3,406 | | 676,731 | | 5,941,220 | Joe D. Rainey | | 2015 | | 816,212 | | 0 | | 1,281,455 | | 697,943 | | 1,634,785 | | 75,712 | | 2,720,300 | | 7,226,407 | President – Eastern | | 2014 | | 788,000 | | 0 | | 1,304,000 | | 727,685 | | 3,418,000 | | 97,957 | | 3,011,531 | | 9,347,173 | Hemisphere | | 2013 | | 788,000 | | 0 | | 1,579,344 | | 785,785 | | 2,730,866 | | 78,858 | | 1,995,925 | | 7,958,778 |
(1) | Effective January 1, 2015, Mr. Garcia assumed the role of Acting Chief Financial Officer. |
Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($) | | Change In Pension Value and NQDC Earnings ($) | | All Other Compensation ($) | | Total ($) | | Jeffrey A. Miller Chairman, President and Chief Executive Officer | | 2019 | | 1,500,000 | | 0 | | 3,584,073 | | 0 | | 5,730,380 | | 139,300 | | 1,799,861 | | 12,753,614 | | | 2018 | | 1,400,000 | | 0 | | 3,137,712 | | 1,253,184 | | 9,628,708 | | 47,006 | | 1,533,288 | | 16,999,898 | | | 2017 | | 1,175,000 | | 0 | | 10,168,098 | | 1,506,020 | | 8,692,468 | | 59,532 | | 1,477,246 | | 23,078,364 | | Lance Loeffler Executive Vice President and Chief Financial Officer | | 2019 | | 650,000 | | 0 | | 888,858 | | 0 | | 0 | | 4,656 | | 465,091 | | 2,008,605 | | | 2018 | | 375,000 | | 0 | | 1,316,925 | | 626,190 | | 60,626 | | 269 | | 218,632 | | 2,597,642 | | Eric J. Carre Executive Vice President – Global Business Lines | | 2019 | | 800,000 | | 0 | | 848,065 | | 0 | | 2,485,124 | | 45,466 | | 737,503 | | 4,916,158 | | Joe D. Rainey President – Eastern Hemisphere | | 2019 | | 910,000 | | 0 | | 1,129,322 | | 0 | | 3,307,924 | | 409,467 | | 2,368,494 | | 8,125,207 | | | 2018 | | 875,000 | | 0 | | 1,223,016 | | 488,976 | | 5,240,944 | | 11,626 | | 3,135,200 | | 10,974,762 | | | 2017 | | 835,000 | | 0 | | 3,703,772 | | 537,948 | | 5,040,420 | | 241,270 | | 3,636,965 | | 13,995,375 | | Mark J. Richard President – Western Hemisphere | | 2019 | | 716,678 | | 0 | | 1,129,322 | | 0 | | 1,656,000 | | 88,574 | | 1,321,431 | | 4,912,005 | |
Salary.Salary.The amounts represented in the Salary column are attributable to annualreflect the salary earned by each NEO. Information related to salary increases in 2015 is discussed in the Compensation Discussion and Analysis under Base Salary.
Stock Awards.Awards.The amounts in the Stock Awards column reflect the grant date fair value of the restricted stock awarded in 2015.2019. Except where there is a distinction to make between the two types of awards, this proxy statement refers to both restricted stock and restricted stock units as “restricted stock.”stock”. We calculate the fair value of restricted stock awards by multiplying the number of restricted shares or units granted by the closing stock price as ofon the award’s grant date. Option Awards.Awards.The amountsAs discussed in theCompensation Discussion and Analysis, we discontinued granting Option Awards column reflect the grant date fair value of the stock options awardedto NEOs in 2015. The fair value of stock options is estimated using the Black-Scholes option pricing model. For a discussion of the assumptions made in these valuations, refer to Note 12 to the Consolidated Financial Statements, Stock-based Compensation, in the Halliburton Company Form 10-K for the fiscal year ended December 31, 2015.2019. Non-Equity Incentive Plan Compensation.Compensation.The amounts represented in the Non-Equity Incentive Plan Compensation column are forreflect amounts earned in 20152019 and paid in 20162020 for the Halliburton Annual Performance Pay Plan and the 20132017 cycle Performance Unit Program. Information about these programs can be found in the Compensation Discussion and Analysis under Short-term (Annual) Incentives for the Halliburton Annual Performance Pay Plan and under Long-term Incentives—2013 Cycle Performance Unit Program Payout for NEOs for the Performance Unit Program. The Threshold, Target, and Maximum amounts for the 2015 Halliburton Annual Performance Pay Plan and the 20152017 cycle of the Performance Unit Program can be foundamounts paid to each NEO are: $5,730,380 for Mr. Miller; $2,485,124 for Mr. Carre; $3,307,924 for Mr. Rainey; and $1,656,000 for Mr. Richard. Mr. Loeffler was not a participant in the 2017 cycle Performance Unit Program. The amounts paid to the NEOs for the 2017 cycle Performance Unit Program differ from what is shown in the Grants of Plan-Based Awards in Fiscal 2015Year 2019 table under the Estimated Future PayoutsPayments Under Non-Equity Incentive Plan Awards. That table indicates the potential award amounts under the 2019 cycle Performance Unit Program, which will close on December 31, 2021. As discussed in the Compensation Discussion and Analysis, no amounts were earned by our NEOs under the 20152019 Halliburton Annual Performance Pay Plan because the minimum threshold performance level was not achieved. The 2013 cycle Performance Unit Program amounts paid to each NEO are: $5,999,513 for Mr. Lesar; $217,564 for Mr. Garcia; $1,634,785 for Mr. Brown; $2,218,718 for Mr. Miller; and $1,634,785 for Mr. Rainey. The amounts paid to the NEOs for the 2013 cycle Performance Unit Program differ from what is shown in the Grants of Plan-Based Awards in Fiscal Year 2015 table under Estimated Future Payments Under Non-Equity Incentive Plan Awards. The Grants of Plan-Based Awards in Fiscal Year 2015 table indicates the potential award amounts for Threshold, Target and Maximum under the 2015 cycle Performance Unit Program, which will close on December 31, 2017. The Summary Compensation Table shows amounts paid for the 2013 cycle Performance Unit Program, which closed on December 31, 2015.
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Change in Pension Value and NQDC Earnings.Earnings.The amounts in the Change in Pension Value and NQDC Earnings column are attributable to the above-market earnings for various nonqualified plans. The methodology for determining what constitutes above-marketabove- www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | 42 |
market earnings is the difference between the interest rate as stated in the applicable nonqualified plan document and the Internal Revenue Service Long-Term 120% AFR rate as of December 31, 2015.2019. The 120% AFR rate used for determining above-market earnings in 20152019 was 3.13%2.52%. Halliburton Company Supplemental Executive Retirement Plan Above-Market Earnings.Earnings. The current interest rate for active participant accounts in the Halliburton Company Supplemental Executive Retirement Plan is 5% as defined by the plan document. The above-market earnings for the planactive participants equaled 1.87%2.48% (5% (plan interest) minus 3.13% (120% AFR rate)2.52%) for 2015. The amounts shown in this column differ from the amounts shown for the Halliburton Company Supplemental Executive Retirement Plan in the 2015 Nonqualified Deferred Compensation table under the Aggregate Earnings in Last Fiscal Year column because that table includes all earnings and losses, and the Summary Compensation Table shows above-market earnings only.2019.
NEOs earned above-market earnings for their balances associated with the Halliburton Company Supplemental Executive Retirement Planplan as follows: $183,534 for Mr. Lesar; $7,210 for Mr. Garcia; $66,888 for Mr. Brown; $24,068$122,789 for Mr. Miller; $3,920 for Mr. Loeffler; $37,791 for Mr. Carre; and $38,374$132,303 for Mr. Rainey. Halliburton Company Benefit Restoration Plan Above-Market Earnings.Earnings. In accordance with the plan document, participants earn monthly interest at the 120% AFR rate, provided the interest rate shall be no less than 6% per annum or greater than 10% per annum. Because the 120% AFR rate was below the 6% minimum interest threshold, the above-market earnings associated with this plan were 2.87%3.48% (6% (plan interest earned in 2015)interest) minus 3.13% (120% AFR rate)2.52%) for 2015. 2019.
NEOs earned above-market earnings for their balances associated with the plan as follows: $16,511 for Mr. Miller; $736 for Mr. Loeffler; $7,675 for Mr. Carre; $16,212 for Mr. Rainey; and $4,582 for Mr. Richard. Elective Deferral Plan Above-Market Earnings. The average NEO earnings for the balances associated with the Elective Deferral Plan were 9.02% for 2019. The above-market earnings associated with this plan equaled 6.50% (9.02% minus 2.52%) for 2019. NEOs earned above-market earnings for balances associated with the plan as follows: $260,952 for Mr. Rainey; and $83,992 for Mr. Richard. Messrs. Miller, Loeffler, and Carre are not participants in and do not have any prior balances in the Elective Deferral Plan. The amounts shown in this column differ from the amounts shown for the Halliburton CompanySupplemental Executive Retirement Plan, the Benefit Restoration Plan, and the Elective Deferral Plan in the 20152019 Nonqualified Deferred Compensation table under the Aggregate Earnings in Last Fiscal Year column because that table includes all earnings and losses and the Summary Compensation Table shows above-market earnings only. NEOs earned above-market earnings for their balances associated with the Halliburton Company Benefit Restoration Plan as follows: $93,928 for Mr. Lesar; $1,279 for Mr. Garcia; $11,506 for Mr. Brown; $6,547 for Mr. Miller; and $8,104 for Mr. Rainey.
Halliburton Company Elective Deferral Plan Above-Market Earnings.The average earnings for the balances associated with the Halliburton Company Elective Deferral Plan were 3.4% for 2015. The above-market earnings associated with this plan equaled 0.27% (3.4% minus 3.13% (120% AFR rate)) for 2015. The amounts shown in this column differ from the amounts shown for the Halliburton Company Elective Deferral Plan in the 2015 Nonqualified Deferred Compensation table under the Aggregate Earnings in Last Fiscal Year column because that table includes all earnings and losses and the Summary Compensation Table shows above-market earnings only.
Messrs.Lesar, Brown, and Rainey earned above-market earnings for balances associated with the Halliburton Company Elective Deferral Plan as follows: $21,665 for Mr. Lesar; $23,575 for Mr. Brown; and $29,234 for Mr. Rainey. Messrs. Garcia and Miller are not participants in and do not have any prior balances in the Halliburton Company Elective Deferral Plan.
All Other Compensation.Compensation.Detailed information for amounts included in the All Other Compensation column can be found in the Supplemental Table: All Other Compensation below.Compensation. Supplemental Table: All Other Compensation The following table details the components of the All Other Compensation column of the Summary Compensation Table for 2015.2019. | | | | | | Halliburton | | | | Restricted | | HRSP | | HRSP | | Benefit | | | | | | | | | | Financial | | Halliburton | | Giving | | | | Stock | | Employer | | Basic | | Restoration | | | | All | | | | | | Planning | | Foundation | | Choices | | HALPAC | | Dividends | | Match | | Contribution | | Plan | | SERP | | Other | | Total | | Name | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | Halliburton Foundation ($) | | Halliburton Giving Choices ($) | | HALPAC ($) | | Restricted Stock Dividends ($) | | HRSP Employer Match ($) | | HRSP Basic ($) | | Benefit Restoration Plan ($) | | SERP ($) | | Expatriate Assignment ($) | | All Other ($) | | Total ($) | David J. Lesar | | 15,000 | | 112,500 | | 2,900 | | 5,000 | | 260,960 | | 13,050 | | 10,600 | | 125,550 | | 1,133,000 | | 263,053 | | 1,941,613 | | Christian A. Garcia | | 0 | | 11,250 | | 400 | | 960 | | 22,115 | | 11,151 | | 10,600 | | 15,739 | | 285,000 | | 6,279 | | 363,494 | | James S. Brown | | 10,000 | | 0 | | 780 | | 4,934 | | 211,532 | | 12,948 | | 10,600 | | 55,328 | | 1,000,000 | | 54,764 | | 1,360,886 | | Jeffrey A. Miller | | 4,675 | | 112,500 | | 1,000 | | 5,000 | | 210,215 | | 8,883 | | 10,600 | | 64,125 | | 651,000 | | 16,538 | | 1,084,536 | | 112,500 | | 1,000 | | 5,000 | | 309,412 | | 13,750 | | 5,600 | | 85,400 | | 1,205,000 | | 0 | | 62,199 | | 1,799,861 | Lance Loeffler | | | 0 | | 75 | | 5,000 | | 47,400 | | 14,000 | | 5,600 | | 25,900 | | 332,000 | | 0 | | 35,116 | | 465,091 | Eric J. Carre | | | 0 | | 1,000 | | 0 | | 88,503 | | 14,000 | | 5,600 | | 36,400 | | 592,000 | | 0 | | 0 | | 737,503 | Joe D. Rainey | | 6,500 | | 0 | | 1,000 | | 5,000 | | 0 | | 10,639 | | 10,600 | | 49,609 | | 709,000 | | 1,927,952 | | 2,720,300 | | 0 | | 0 | | 0 | | 0 | | 14,000 | | 5,600 | | 44,100 | | 983,000 | | 1,321,794 | | 0 | | 2,368,494 | Mark J. Richard | | | 45,000 | | 80 | | 5,000 | | 45,473 | | 13,177 | | 5,600 | | 30,567 | | 1,129,000 | | 0 | | 47,534 | | 1,321,431 |
Financial Planning.This program allows NEOs to receive financial planning services by accredited financial planners. Tax planning is not covered under this program. The amount is based on the services the NEO received in 2015. If they do not utilize the program, the amount is forfeited.
Halliburton Foundation.Foundation.The Halliburton Foundation allows NEOs and other employees to donate to approved universities, medical hospitals, and primary schools of their choice. In 2015,2019, the Halliburton Foundation matched donations up to $20,000 on a 2.25 for 1 basis. Messrs. Lesar andMr. Miller participateparticipated in the Halliburton Foundation’s matching program for Directors, which allowed their 2015his 2019 contributions up to $50,000 to qualified organizations to be matched on a 2.25 for 1 basis. Halliburton Giving Choices.Choices.The Halliburton Giving Choices Program allows NEOs and other employees to donate to approved not-for-profit charities of their choice. We match donations by contributing ten cents for every dollar contributed by employees. The amounts shown represent the match amounts the program donated to charities on behalf of the NEOs in 2015.2019. HALLIBURTON - 2016 Proxy Statement
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Halliburton Political Action Committee.Committee.The Halliburton Political Action Committee, or HALPAC, allows NEOs and other eligible employees to donate to political candidates and participate in the political process. We match the NEO’s donationNEOs’ and other employees’ donations to HALPAC dollar-for-dollar to a 501(c)(3) status nonprofit organization of the contributor’s choice. The amounts shown represent the match amounts the program donated to charities on behalf of the NEOs in 2015.2019. | HALLIBURTON | 2020Proxy Statement | 43 |
Restricted Stock Dividends.Dividends.This is the amount of dividends paid on restricted stock held by NEOs in 2015.2019. Restricted stock units granted to employees do not receive dividend payments. Halliburton Retirement and Savings Plan Employer Match.MatchThe amount shown.This is the contribution we made on behalf of each NEO to the Halliburton Company Retirement and Savings Plan, our defined contribution plan. We match employee contributions up to 5% of each employee’s eligible base salary up to the 401(a)(17) compensation limit of $265,000$280,000 in 2015.2019.
Halliburton Retirement and Savings Plan Basic Contribution.Contribution.This is the contribution we made on behalf of each NEO to the Halliburton Company Retirement and Savings Plan. If actively employed on December 31, 2015,2019, or if they meet retirement eligibility requirements of the plan as of their separation date, each employee receives a contribution equal to 4%2% of their eligible base pay up to the 401(a)(17) compensation limit of $265,000$280,000 in 2015.2019.
Halliburton Company Benefit Restoration Plan.Plan.This is the award earned under the Halliburton Company Benefit Restoration Plan in 2015. The plan provides a vehicle to restore qualified plan benefits which are reduced2019 as a resultdiscussed in the Benefit Restoration Plan section of limitations on contributions imposed under the Internal Revenue Code or due to participation in other plans we sponsorCompensation Discussion and to defer compensation that would otherwise be treated as excessive employee remuneration within the meaning of Section 162(m) of the Internal Revenue Code.Analysis. Associated interest, awards, and beginning and ending balances for the Halliburton Company Benefit Restoration Plan are included in the 20152019 Nonqualified Deferred Compensation table. Above-market interest earned on these awards and associated balances are shown in the Summary Compensation Table under the Change in Pension Value and NQDC Earnings column.
Halliburton Company Supplemental Executive Retirement Plan.These are awards approved under the Halliburton Company Supplemental Executive Retirement Plan.This is the award approved under the Supplemental Executive Retirement Plan in 2019 as discussed in the Supplemental Executive Retirement Plan section of the Compensation Discussion and Analysis. Awards are approved by our Compensation Committee annually. The SERP provides a competitive level of pay replacement for key executives upon retirement. Associated interest, awards, and beginning and ending balances for the SERPSupplemental Executive Retirement Plan are included in the 20152019 Nonqualified Deferred Compensation table.
Expatriate Assignment.In 2019, Mr. Rainey received compensation associated with his expatriate assignment similar in type to that received by other expatriates on comparable assignments. He received $89,392 for cost of living adjustment; $91,000 mobility premium; $1,002,226 for tax equalization; $112,786 for imputed housing allowance; $13,320 for imputed vacation travel; and $13,070 for auto imputed allowance. All Other. • | Country Club Membership Dues.Aircraft UsageClub memberships are approved. As a result of the recommendations provided by an independent, third-party security consultant, the Board has determined that Mr. Miller must use company aircraft for business purposes only. During 2015, we paid club membership dues for Mr. Brown.all travel. The amount incurred was $29,119. | | | • | Aircraft Usage.Mr. Lesar,security study also recommends that his spouse and children use our aircraft for all travel for security reasons as directed by the Board.company-provided aircraft. The only personal use of company aircraft in 20152019 for other NEOs was for spousal and dependent travel on select business trips. For 2015,2019, the incremental cost to us for this personal use of our aircraft was as follows: $156,574$50,214 for Mr. Lesar; $12,494Miller and $9,839 for Mr. Brown; $3,987 for Mr. Miller; and $3,987 for Mr. Rainey.Loeffler. For total compensation purposes in 2015,2019, we valued the incremental cost of the personal use of aircraft using a method that takes into account: landing, parking, hanger, flight planning services, and dead-head costs; crew travel expenses; supplies and catering; aircraft fuel and oil expenses per hour of flight; any customs, foreign permit, and similar fees; and passenger ground transportation. For tax purposes, we impute income to the NEO for the value of the spousal and dependent travel on select business trips and reimburse the NEONEOs are not reimbursed for the tax impact of the imputed income. For 2015 tax reimbursements forany imputed income associated with this spousal and dependent travel were as follows: $44,088 for Mr. Lesar; $5,695 for Mr. Garcia; $13,151 for Mr. Brown; $9,706 for Mr. Miller; and $1,720 for Mr. Rainey. | | resulting from aircraft usage. | • | Home Security.Security. We provide security for residences based on risk assessments which consider the NEO’s position.assessments. In 2015,2019, home security costs were as follows: $38,309$3,363 for Mr. Lesar; $584Miller and $25,277 for Mr. Garcia; and $2,845 for Mr. Miller. | | Loeffler. | • | Car/Driver.Driver. A car and part-time driver have been assigned tois available for Mr. LesarMiller’s limited use as needed for security purposes and so that he can work while in transit to allow him to meet customer and our needs.customers or attend business-related functions. In 20152019, the cost to us was $19,532. | | $8,622. | • | Other Compensation for Mr. Lesar.Richard. In 2015,2019, Mr. LesarRichard received $2,672$37,184 in imputed income for relocation and $1,878 for tax equalization. | | | • | Other Compensation for Mr. Rainey.In 2015, Mr. Rainey received $45,764 for cost of living adjustment; $81,621 mobility premium; $1,659,076 for tax equalization; $500 for tax preparation fees; $122,215 for imputed housing allowance; and $13,069 for auto imputed allowance. All compensation amounts are associated with his expatriate assignment and other expatriates on comparable assignments receive similar types of adjustments.$10,350 in service anniversary gifts. |
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GRANTS OF PLAN-BASED AWARDS IN FISCAL 2015Grants of Plan-Based Awards in Fiscal 2019
The following table represents amounts associated with the 20152019 cycle Performance Unit Program, the 20152019 Annual Performance Pay Plan, and restricted stock and stock option awards granted in 20152019 to our NEOs. | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | All Other Stock Awards: Number of Shares of | | Grant Date Fair Value of Stock and Options | Name | | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Stock or Units (#) | | Awards ($) | Jeffrey A. Miller | | | | | 1,203,958 | | 4,815,832 | | 9,631,664 | (1) | | | | | | | | | Estimated Future Payouts Under Non-Equity | | | | All Other | | | | | | | | 900,000 | | 2,250,000 | | 4,500,000 | (2) | | | | | | | Incentive Plan Awards | | All Other | | Option Awards: | | | | Grant Date | | 12/04/2019 | | | 166,934 | | 3,584,073 | Lance Loeffler | | | | | 359,869 | | 1,439,476 | | 2,878,952 | (1) | | | | | | | | | | | | | Stock Awards: | | Number of | | Exercise or | | Fair Value | | | | 260,000 | | 650,000 | | 1,300,000 | (2) | | | | | | | | | | | | | Number of | | Securities | | Base Price | | of Stock | | 12/04/2019 | | | 41,400 | | 888,858 | | | | | | | | | | | Shares of | | Underlying | | of Option | | and Option | | | | Grant | | Threshold | | Target | | Maximum | | Stock or Units | | Options | | Awards | | Awards | | Name | | Date | | ($) | | ($) | | ($) | | (#) | | (#) | | ($/Share) | | ($) | | David J. Lesar | | | | 2,395,707 | | 4,791,414 | | 9,582,828 | (1) | | | | | | | | | | | | | 1,050,000 | | 2,625,000 | | 5,250,000 | (2) | | | | | | | | | | | 12/02/2015 | | | | | | | | 99,300 | | | | | | 3,867,735 | | | | 12/02/2015 | | | | | | | | | | 176,900 | | 38.95 | | 2,103,341 | | Christian A. Garcia | | | | 119,841 | | 239,682 | | 479,364 | (1) | | | | | | | | | | | | | 135,000 | | 337,500 | | 675,000 | (2) | | | | | | | | | | | 12/02/2015 | | | | | | | | 18,000 | | | | | | 701,100 | | | | 12/02/2015 | | | | | | | | | | 32,100 | | 38.95 | | 381,669 | | James S. Brown | | | | 800,855 | | 1,601,710 | | 3,203,420 | (1) | | | | | | | | | | | | | 396,000 | | 990,000 | | 1,980,000 | (2) | | | | | | | | | | | 12/02/2015 | | | | | | | | 32,900 | | | | | | 1,281,455 | | | | 12/02/2015 | | | | | | | | | | 58,700 | | 38.95 | | 697,943 | | Jeffrey A. Miller | | | | 1,548,117 | | 3,096,234 | | 6,192,468 | (1) | | | | | | | | | | | | | 500,000 | | 1,250,000 | | 2,500,000 | (2) | | | | | | | | | Eric J. Carre | | | | | 352,174 | | 1,408,696 | | 2,817,392 | (1) | | | | | 12/02/2015 | | | | | | | | 55,700 | | | | | | 2,169,515 | | | | 320,000 | | 800,000 | | 1,600,000 | (2) | | | | | 12/02/2015 | | | | | | | | | | 99,200 | | 38.95 | | 1,179,488 | | 12/04/2019 | | | 39,500 | | 848,065 | Joe D. Rainey | | | | 800,855 | | 1,601,710 | | 3,203,420 | (1) | | | | | | | | | | | 469,847 | | 1,879,388 | | 3,758,776 | (1) | | | | | | | 367,400 | | 918,500 | | 1,837,000 | (2) | | | | | | | | | | | 400,400 | | 1,001,000 | | 2,002,000 | (2) | | | | | 12/02/2015 | | | | | | | | 32,900 | | | | | | 1,281,455 | | 12/04/2019 | | | 52,600 | | 1,129,322 | Mark J. Richard | | | | | 469,847 | | 1,879,388 | | 3,758,776 | (1) | | | | | 12/02/2015 | | | | | | | | | | 58,700 | | 38.95 | | 697,943 | | | | 275,000 | | 687,500 | | 1,375,000 | (2) | | | | | | 12/04/2019 | | | 52,600 | | 1,129,322 |
(1) | Opportunity levels under the 20152019 cycle of the Performance Unit Program. | (2) | Opportunity levels under the 20152019 Halliburton Annual Performance Pay Plan. |
As indicated by footnote (1), the opportunities for each NEO under the 20152019 cycle Performance Unit Program if the Threshold, Target, or Maximum levels are achieved are reflected under Estimated Future Payouts Under Non-Equity Incentive Plan Awards. The potential payouts are performance driven and completely at risk. For more information on the 20152019 cycle Performance Unit Program, refer to Long-term Incentives in the Compensation Discussion and Analysis. As indicated by footnote (2), the opportunities for each NEO under the 20152019 Halliburton Annual Performance Pay Plan are also reflected under Estimated Future Payouts Under Non-Equity Incentive Plan Awards. This plan measures company Cash Value Added as compared to our pre-established goals during a one-year period. The potential payouts are performance driven and completely at risk. For more information on the 20152019 Halliburton Annual Performance Pay Program, refer to Short-term (Annual) IncentivesIncentive in the Compensation Discussion and Analysis. No amounts were earned by our NEOs under the 2019 Halliburton Annual Performance Pay Plan because the minimum threshold performance level was not achieved. All restricted stock and nonqualified stock option awards are granted under the Stock and Incentive Plan. The awards listed under All Other Stock Awards: Number of Shares of Stock or Units and under All Other Option Awards: Number of Securities Underlying Options were awarded to each NEO on the date indicated by the Compensation Committee. The annual restricted stock grants awarded to the NEOs in 2015during 2019 are subject to a graded vesting schedule of 20% per year over five years. This vesting schedule serves to motivate our NEOs to remain employed with us. All restricted shares are priced at fair market value on the date of grant. Quarterly dividends are paid on the restricted shares at the same time and rate payable on our common stock, which was $0.18 per share during 2015. Quarterly dividends are not paid on restricted stock units.2019. The shares may not be sold transferred or used as collateraltransferred until fully vested. The shares remain subject to forfeiture during the restricted period in the event of athe NEO’s termination of employment or an unapproved early retirement. Nonqualified stock options granted in 2015 vest over a three-year graded vesting period with 331/3%of the grants vesting each year. All options are priced at the fair market value on the date of grant using the Black-Scholes options pricing model. There are no voting or dividend rights unless the NEO exercises the options and acquires the shares.
The Estimated Future Payouts Under Equity Incentive Plan Awards columns have been omitted because awards under the Performance Unit Program and Halliburton Annual Performance Pay Plan are expected to be paid in cash and are disclosed under Estimated Future Payouts Under Non-Equity Incentive Plan Awards.
HALLIBURTON | - 2016 2020Proxy Statement | 4145 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2015Outstanding Equity Awards at Fiscal Year End 2019
The following table represents outstanding stock option and restricted stock awards for our NEOs as of December 31, 2015.2019. The market value of shares or units of stock not vested was determined by multiplying the number of unvested restricted shares at year end by the closing price of our common stock on the NYSE of $24.47 on December 31, 2019. | | | | Option Awards | | Stock Awards | | | | | | | Number of | | Number of | | | | | | | | | | | | | | | Securities | | Securities | | | | | | | Number of | | | | | | | | | Underlying | | Underlying | | | | | | | Shares | | Market Value | | | | | | | Unexercised | | Unexercised | | Option | | | | | or Units | | of Shares | | | | | | | Options | | Options | | Exercise | | Option | | | of Stock | | or Units of Stock | | | | | | | (#) | | (#) | | Price | | Expiration | | | Not Vested | | Not Vested | | | | Option Awards | | Stock Awards | Name | | Grant Date | | | Exercisable | | Unexercisable | | ($) | | Date | | | (#) | | ($) | | Grant Date | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock Not Vested (#) | | Market Value of Shares or Units of Stock Not Vested ($) | David J. Lesar(1) | | 12/6/2006 | | – | | – | | | | | | 8,438 | | 287,230 | | | | 12/1/2010 | | 108,000 | | – | | 39.19 | | 12/1/2020 | | – | | – | | | | 12/6/2011 | | 141,900 | | – | | 35.57 | | 12/6/2021 | | 22,000 | | 748,880 | | | | 12/5/2012 | | 208,900 | | – | | 33.50 | | 12/5/2022 | | 60,360 | | 2,054,654 | | | | 12/4/2013 | | 91,934 | | 45,966 | | 50.62 | | 12/4/2023 | | 56,820 | | 1,934,153 | | | | 12/3/2014 | | 59,367 | | 118,733 | | 40.75 | | 12/3/2024 | | 76,800 | | 2,614,272 | | | | 12/2/2015 | | | – | | 176,900 | | 38.95 | | 12/2/2025 | | | 99,300 | | 3,380,172 | | TOTAL | | | | | 610,101 | | 341,599 | | | | | | | 323,718 | | 11,019,361 | | Christian A. Garcia(2) | | 1/3/2007 | | – | | – | | | | | | 780 | | 26,551 | | Jeffrey A. Miller(1) | | | 12/4/2013 | | 55,700 | | – | | 50.62 | | 12/4/2023 | | – | | – | | | 1/2/2009 | | 13,500 | | – | | 19.45 | | 1/2/2019 | | – | | – | | 12/3/2014 | | 115,100 | | – | | 40.75 | | 12/3/2024 | | – | | – | | | 3/8/2011 | | – | | – | | | | | | 2,000 | | 68,080 | | 12/2/2015 | | 99,200 | | – | | 38.95 | | 12/2/2025 | | 11,140 | | 272,596 | | | 12/6/2011 | | 1,933 | | – | | 35.57 | | 12/6/2021 | | 900 | | 30,636 | | 12/7/2016 | | 69,500 | | – | | 53.54 | | 12/7/2026 | | 16,720 | | 409,138 | | | 12/5/2012 | | 4,999 | | – | | 33.50 | | 12/5/2022 | | 2,160 | | 73,526 | | 6/1/2017 | | – | | – | | | 150,000 | | 3,670,500 | | | 12/4/2013 | | 3,934 | | 1,966 | | 50.62 | | 12/4/2023 | | 4,200 | | 142,968 | | 12/6/2017 | | 85,667 | | 42,833 | | 43.38 | | 12/6/2027 | | 46,260 | | 1,131,982 | | | 12/3/2014 | | 2,901 | | 5,799 | | 40.75 | | 12/3/2024 | | 8,000 | | 272,320 | | 12/5/2018 | | 57,067 | | 114,133 | | 31.44 | | 12/5/2028 | | 79,840 | | 1,953,685 | | | 12/2/2015 | | | – | | 32,100 | | 38.95 | | 12/2/2025 | | | 18,000 | | 612,720 | | 12/4/2019 | | – | | – | | | | 166,934 | | 4,084,875 | TOTAL | | | | | 27,267 | | 39,865 | | | | | | | 36,040 | | 1,226,801 | | | | 482,234 | | 156,966 | | | 470,894 | | 11,522,776 | James S. Brown(3) | | 1/3/2007 | | – | | – | | | | | | 2,600 | | 88,504 | | | | 12/2/2008 | | – | | – | | | | | | 58,365 | | 1,986,745 | | Lance Loeffler(2) | | | 1/2/2015 | | 15,594 | | – | | 39.49 | | 1/2/2025 | | 1,646 | | 40,278 | | | 12/1/2010 | | 26,100 | | – | | 39.19 | | 12/1/2020 | | – | | – | | 5/1/2015 | | – | | – | | | 203 | | 4,967 | | | 5/18/2011 | | – | | – | | | | | | 106,474 | | 3,624,375 | | 1/4/2016 | | 27,912 | | – | | 34.48 | | 1/4/2026 | | 4,176 | | 102,187 | | | 12/6/2011 | | 43,700 | | – | | 35.57 | | 12/6/2021 | | 6,780 | | 230,791 | | 1/3/2017 | | 11,119 | | 5,559 | | 55.68 | | 1/3/2017 | | 3,889 | | 95,164 | | | 12/5/2012 | | 56,900 | | – | | 33.50 | | 12/5/2022 | | 16,440 | | 559,618 | | 5/3/2017 | | – | | – | | | 8,840 | | 216,315 | | | 12/4/2013 | | 30,334 | | 15,166 | | 50.62 | | 12/4/2023 | | 18,720 | | 637,229 | | 1/2/2018 | | 6,806 | | 13,610 | | 49.61 | | 1/2/2028 | | 6,128 | | 149,952 | | | 12/3/2014 | | 19,834 | | 39,666 | | 40.75 | | 12/3/2024 | | 25,600 | | 871,424 | | 12/5/2018 | | 17,034 | | 34,066 | | 31.44 | | 12/5/2028 | | 23,840 | | 583,365 | | | 12/2/2015 | | | – | | 58,700 | | 38.95 | | 12/2/2025 | | | 32,900 | | 1,119,916 | | 12/4/2019 | | – | | – | | | | 41,400 | | 1,013,058 | TOTAL | | | | | 176,868 | | 113,532 | | | | | | | 267,879 | | 9,118,602 | | | | 78,465 | | 53,235 | | | 90,122 | | 2,205,286 | Jeffrey A. Miller(4) | | 1/3/2007 | | – | | – | | | | | | 600 | | 20,424 | | | | 1/1/2011 | | – | | – | | | | | | 2,500 | | 85,100 | | | | 9/27/2011 | | – | | – | | | | | | 50,000 | | 1,702,000 | | Eric J. Carre(3) | | | 1/2/2014 | | 8,300 | | – | | 50.01 | | 1/2/2024 | | – | | – | | | 1/3/2012 | | 3,833 | | – | | 34.15 | | 1/3/2022 | | 3,600 | | 122,544 | | 1/2/2015 | | 24,750 | | – | | 39.49 | | 1/2/2025 | | 3,495 | | 85,523 | | | 9/19/2012 | | – | | – | | | | | | 50,000 | | 1,702,000 | | 1/4/2016 | | 9,534 | | – | | 34.48 | | 1/4/2026 | | 6,682 | | 163,509 | | | 12/5/2012 | | 51,466 | | – | | 33.50 | | 12/5/2022 | | 22,320 | | 759,773 | | 5/1/2016 | | – | | – | | | 40,000 | | 978,800 | | | 12/4/2013 | | 37,134 | | 18,566 | | 50.62 | | 12/4/2023 | | 22,920 | | 780,197 | | 12/7/2016 | | 30,100 | | – | | 53.54 | | 12/7/2026 | | 7,240 | | 177,163 | | | 8/1/2014 | | – | | – | | | | | | 45,300 | | 1,542,012 | | 12/6/2017 | | 22,951 | | 11,474 | | 43.38 | | 12/6/2027 | | 12,420 | | 303,917 | | | 12/3/2014 | | 38,367 | | 76,733 | | 40.75 | | 12/3/2024 | | 49,600 | | 1,688,384 | | 12/5/2018 | | 16,701 | | 33,399 | | 31.44 | | 12/5/2028 | | 23,360 | | 571,619 | | | 12/2/2015 | | | – | | 99,200 | | 38.95 | | 12/2/2025 | | | 55,700 | | 1,896,028 | | 12/4/2019 | | – | | – | | | | 39,500 | | 966,565 | TOTAL | | | | | 130,800 | | 194,499 | | | | | | | 302,540 | | 10,298,462 | | | | 112,336 | | 44,873 | | | 132,697 | | 3,247,096 | Joe D. Rainey(5) | | 1/3/2007 | | – | | – | | | | | | 600 | | 20,424 | | | | 12/6/2011 | | 14,566 | | – | | 35.57 | | 12/6/2021 | | 56,780 | | 1,932,791 | | | | 12/5/2012 | | 37,933 | | – | | 33.50 | | 12/5/2022 | | 16,440 | | 559,618 | | | | 12/4/2013 | | 30,334 | | 15,166 | | 50.62 | | 12/4/2023 | | 18,720 | | 637,229 | | | | 12/3/2014 | | 19,834 | | 39,666 | | 40.75 | | 12/3/2024 | | 25,600 | | 871,424 | | | | 12/2/2015 | | | – | | 58,700 | | 38.95 | | 12/2/2025 | | | 32,900 | | 1,119,916 | | TOTAL | | | | | 102,667 | | 113,532 | | | | | | | 151,040 | | 5,141,402 | |
www.halliburton.com | | HALLIBURTON | - 2016 2020Proxy Statement | 4246 |
| | | | Option Awards | | Stock Awards | Name | | Grant Date | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock Not Vested (#) | | Market Value of Shares or Units of Stock Not Vested ($) | Joe D. Rainey(4) | | 12/6/2011 | | 14,566 | | – | | 35.57 | | 12/6/2021 | | – | | – | | | 12/5/2012 | | 37,933 | | – | | 33.50 | | 12/5/2022 | | – | | – | | | 12/4/2013 | | 45,500 | | – | | 50.62 | | 12/4/2023 | | – | | – | | | 12/3/2014 | | 59,500 | | – | | 40.75 | | 12/3/2024 | | – | | – | | | 12/2/2015 | | 58,700 | | – | | 38.95 | | 12/2/2025 | | 6,580 | | 161,013 | | | 12/7/2016 | | 40,100 | | – | | 53.54 | | 12/7/2026 | | 9,680 | | 236,870 | | | 5/17/2017 | | – | | – | | | | | | 54,089 | | 1,323,558 | | | 12/6/2017 | | 30,601 | | 15,299 | | 43.38 | | 12/6/2027 | | 16,560 | | 405,223 | | | 12/5/2018 | | 22,267 | | 44,533 | | 31.44 | | 12/5/2028 | | 31,120 | | 761,506 | | | 12/4/2019 | | – | | – | | | | | | 52,600 | | 1,287,122 | TOTAL | | | | 309,167 | | 59,832 | | | | | | 170,629 | | 4,175,292 | Mark J. Richard(5) | | 1/5/2010 | | 7,000 | | – | | 31.65 | | 1/5/2020 | | – | | – | | | 1/1/2011 | | 4,600 | | – | | 40.83 | | 1/1/2021 | | – | | – | | | 1/3/2012 | | 6,400 | | – | | 34.15 | | 1/3/2022 | | – | | – | | | 1/3/2013 | | 13,900 | | – | | 36.31 | | 1/3/2023 | | – | | – | | | 1/2/2014 | | 7,900 | | – | | 50.01 | | 1/2/2024 | | – | | – | | | 1/2/2015 | | 14,807 | | – | | 39.49 | | 1/2/2025 | | 2,091 | | 51,167 | | | 10/27/2015 | | – | | – | | | | | | 2,134 | | 52,219 | | | 1/4/2016 | | 28,604 | | – | | 34.48 | | 1/4/2026 | | 6,682 | | 163,509 | | | 1/3/2017 | | 11,413 | | 5,706 | | 55.68 | | 1/3/2027 | | 6,245 | | 152,815 | | | 1/2/2018 | | 8,007 | | 16,012 | | 49.61 | | 1/2/2028 | | 11,288 | | 276,217 | | | 12/20/2018 | | 14,642 | | 29,282 | | 27.14 | | 12/20/2028 | | 20,633 | | 504,890 | | | 12/4/2019 | | – | | – | | | | | | 52,600 | | 1,287,122 | TOTAL | | | | 117,273 | | 51,000 | | | | | | 101,673 | | 2,487,939 |
(1) | Mr. Lesar’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the December 6, 2006 award, which vests in equal amounts over ten years. | (2) | Mr. Garcia’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the January 3, 2007 award, which vests in equal amounts over ten years. | (3) | Mr. Brown’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the January 3, 2007 award, which vests in equal amounts over ten years, the December 2, 2008 restricted stock award, which began vesting on the sixth anniversary of the award, and vests 20% annually through year ten, and the May 18, 2011 restricted stock award, which vests 100% on May 30, 2016. | (4) | Mr. Miller’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the January 3, 2007June 1, 2017, award, which vests in equal amounts over ten years, and the September 27, 2011, September 19, 2012, and August 1, 2014 awards, which eachwill vest 100% five years from the date of grant. | (5)(2) | Mr. Loeffler’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the May 3, 2017, award, which will vest 100% three years from the date of grant. | (3) | Mr. Carre’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the May 1, 2016, award, which will vest 100% five years from the date of grant. | (4) | Mr. Rainey’s stock option awards vest annually in equal amounts over three-year vesting schedules. His restricted stock awards vest in equal amounts over each grant’s five-year vesting schedule, except for the January 3, 2007May 17, 2017, award, which vestswill vest 100% five years from the date of grant. | (5) | Mr. Richard’s stock option awards vest annually in equal amounts over ten years, and the December 6, 2011three-year vesting schedules. His restricted stock award of 50,000 shares, whichawards vest 100% on December 6, 2016.in equal amounts over each grant’s five-year vesting schedule. |
| HALLIBURTON | 2020Proxy Statement | 47 |
The nonqualified stock option awards listed under
2019 Option Awards include outstanding awards, exercisableExercises and unexercisable, as of December 31, 2015. The restricted stock awards under Stock Awards are the number of shares not vested as of December 31, 2015. The market value shown was determined by multiplying the number of unvested restricted shares at year end by the closing price of our common stock on the NYSE of $34.04 on December 31, 2015.
The Equity Incentive Plan Awards columns are omitted as we do not utilize this type of award at this time.
The narratives under the Summary Compensation Table and the Grants of Plan-Based Awards in Fiscal 2015 table contain additional information on stock option and restricted stock awards.
2015 OPTION EXERCISES AND STOCK VESTEDVested
The following table represents stock options exercised and restricted shares that vested during fiscal year 20152019 for our NEOs. | | | Option Awards | | | | Stock Awards | | | | | | Number of Shares | | | | Value Realized | | | | Number of Shares | | | | Value Realized | | | | | | Acquired on Exercise | | | | on Exercise | | | | Acquired on Vesting | | | | on Vesting | | | Option Awards | | Stock Awards | Name | | | (#) | | | | ($) | | | | (#) | | | | ($) | | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) | David J. Lesar | | | 0 | | | | 0 | | | | 118,017 | | | | 4,391,662 | | | Christian A. Garcia | | | 0 | | | | 0 | | | | 11,690 | | | | 457,381 | | | James S. Brown | | | 0 | | | | 0 | | | | 53,055 | | | | 2,045,641 | | | Jeffrey A. Miller | | | 0 | | | | 0 | | | | 39,600 | | | | 1,514,552 | | | – | | – | | 112,580 | | 2,434,715 | Lance Loeffler | | | – | | – | | 13,726 | | 333,642 | Eric J. Carre | | | – | | – | | 46,596 | | 1,149,906 | Joe D. Rainey | | | 0 | | | | 0 | | | | 36,360 | | | | 1,396,209 | | | – | | – | | 31,120 | | 671,131 | Mark J. Richard | | | – | | – | | 68,730 | | 1,970,666 |
The value realized for vested restricted stock awards was determined by multiplying the fair market value of the shares (closing price of our common stock on the NYSE on the vesting date) by the number of shares that vested. Shares vested on various dates throughout the year; therefore, theyear. The value listed represents the aggregate value of all shares that vested for each NEO in 2015.2019. HALLIBURTON - 2016 Proxy Statement
| 43 |
2015 NONQUALIFIED DEFERRED COMPENSATION2019 Nonqualified Deferred Compensation
The 20152019 Nonqualified Deferred Compensation table reflects balances in our nonqualified plans as of January 1, 2015,2019, contributions made by the NEO and us during 2015, any2019, earnings (the net of the gains and losses on funds, as applicable), distributions, and the ending balance as of December 31, 2015.2019. The plans are described in the Compensation Discussion and Analysis or the narratives to the Summary Compensation Table, and brief summaries are provided below.Analysis. Name | | Plan | | | 01/01/15 Balance ($) | | | | Executive Contributions In Last Fiscal Year ($) | | | | Registrant Contributions In Last Fiscal Year ($) | | | | Aggregate Earnings In Last Fiscal Year ($) | | | | Aggregate Withdrawals/ Distribution ($) | | | | Aggregate Balance At Last Fiscal Year End ($) | | David J. Lesar | | SERP | | | 9,820,754 | | | | 0 | | | | 1,133,000 | | | | 490,924 | | | | 0 | | | | 11,444,678 | | | | Benefit Restoration | | | 3,023,018 | | | | 0 | | | | 125,550 | | | | 188,548 | | | | 0 | | | | 3,337,116 | | | | Elective Deferral | | | 1,213,807 | | | | 8,154,450 | | | | 0 | | | | 399,564 | | | | 0 | | | | 9,767,821 | | | | TOTAL | | | 14,057,579 | | | | 8,154,450 | | | | 1,258,550 | | | | 1,079,036 | | | | 0 | | | | 24,549,615 | | Christian A. Garcia | | SERP | | | 387,074 | | | | 0 | | | | 285,000 | | | | 19,325 | | | | 0 | | | | 691,399 | | | | Benefit Restoration | | | 32,551 | | | | 0 | | | | 15,739 | | | | 2,298 | | | | 0 | | | | 50,588 | | | | TOTAL | | | 419,625 | | | | 0 | | | | 300,739 | | | | 21,623 | | | | 0 | | | | 741,987 | | James S. Brown | | SERP | | | 3,582,472 | | | | 0 | | | | 1,000,000 | | | | 179,019 | | | | 0 | | | | 4,761,491 | | | | Benefit Restoration | | | 307,051 | | | | 0 | | | | 55,328 | | | | 21,117 | | | | 0 | | | | 383,496 | | | | Elective Deferral | | | 929,911 | | | | 0 | | | | 0 | | | | 52,661 | | | | 0 | | | | 982,572 | | | | TOTAL | | | 4,819,434 | | | | 0 | | | | 1,055,328 | | | | 252,797 | | | | 0 | | | | 6,127,559 | | Jeffrey A. Miller | | SERP | | | 1,291,586 | | | | 0 | | | | 651,000 | | | | 64,494 | | | | 0 | | | | 2,007,080 | | | | Benefit Restoration | | | 117,988 | | | | 0 | | | | 64,125 | | | | 10,240 | | | | 0 | | | | 192,353 | | | | TOTAL | | | 1,409,574 | | | | 0 | | | | 715,125 | | | | 74,734 | | | | 0 | | | | 2,199,433 | | Joe D. Rainey | | SERP | | | 2,056,444 | | | | 0 | | | | 709,000 | | | | 102,741 | | | | 0 | | | | 2,868,185 | | | | Benefit Restoration | | | 188,515 | | | | 0 | | | | 49,609 | | | | 14,005 | | | | 0 | | | | 252,129 | | | | Elective Deferral | | | 2,367,819 | | | | 788,000 | | | | 0 | | | | 133,718 | | | | 0 | | | | 3,289,537 | | | | TOTAL | | | 4,612,778 | | | | 788,000 | | | | 758,609 | | | | 250,464 | | | | 0 | | | | 6,409,851 | |
Halliburton Company Supplemental Executive Retirement Plan.The SERP provides a competitive level of pay replacement for key executives upon retirement. The current pay replacement target is 75% of final base salary at age 65 with 25 years of service. Several assumptions are made annually and include a base salary increase percentage, qualified and nonqualified plan contributions, qualified and nonqualified plan investment earnings, and an annuity rate.
Allocations under the SERP can be made once a year and are approved by the Compensation Committee at their discretion. The material factors and guidelines considered in making an allocation include:
• | Retirement benefits provided from our other programs, both qualified and nonqualified; | | | • | Current compensation; | | | • | Length of service; and | | | • | Years of service to normal retirement. |
All of the NEOs are fully vested in their respective account balances. Balances earn interest at an annual rate of 5%.
SERP amounts shown in the Registrant Contributions in Last Fiscal Year column are included in the Summary Compensation Table under All Other Compensation.
Halliburton Company Benefit Restoration Plan.The Halliburton Company Benefit Restoration Plan provides a vehicle to restore qualified plan benefits which are reduced as a result of limitations on contributions imposed under the Internal Revenue Code or due to participation in other plans we sponsor and to defer compensation that would otherwise be treated as excessive remuneration within the meaning of Section 162(m) of the Internal Revenue Code. Awards are made annually to those who meet these criteria and earned interest at an annual rate as defined by the plan document. Awards and corresponding interest balances are 100% vested and distributed upon separation.
In accordance with the plan document, participants earn monthly interest at the 120% AFR rate, provided the interest rate shall be no less than 6% per annum or greater than 10% per annum. Because the 120% AFR rate was below the 6% minimum interest threshold, plan participants earned interest at an annual rate of 6% in 2015.
Benefit Restoration amounts shown in the Registrant Contributions in Last Fiscal Year column are included in the Summary Compensation Table under All Other Compensation.
Halliburton Company Elective Deferral Plan.The Halliburton Company Elective Deferral Plan allows participants to save for retirement utilizing eligible pre-tax base and/or eligible incentive compensation.
Name | | Plan | | 01/01/19 Balance ($) | | Executive Contributions In Last Fiscal Year ($) | | Registrant Contributions In Last Fiscal Year ($) | | Aggregate Earnings In Last Fiscal Year ($) | | Aggregate Distributions ($) | | Aggregate Balance At Last Fiscal Year End ($) | Jeffrey A. Miller | | SERP | | 4,956,791 | | 0 | | 1,205,000 | | 247,700 | | 0 | | 6,409,491 | | | Benefit Restoration | | 477,957 | | 0 | | 85,400 | | 28,556 | | 0 | | 591,913 | | | TOTAL | | 5,434,748 | | 0 | | 1,290,400 | | 276,256 | | 0 | | 7,001,404 | Lance Loeffler | | SERP | | 159,000 | | 0 | | 332,000 | | 7,927 | | 0 | | 498,927 | | | Benefit Restoration | | 21,366 | | 0 | | 25,900 | | 1,275 | | 0 | | 48,541 | | | TOTAL | | 180,366 | | 0 | | 357,900 | | 9,202 | | 0 | | 547,468 | Eric J. Carre | | SERP | | 1,526,623 | | 0 | | 592,000 | | 76,262 | | 0 | | 2,194,885 | | | Benefits Restoration | | 222,110 | | 0 | | 36,400 | | 13,272 | | 0 | | 271,782 | | | TOTAL | | 1,748,733 | | 0 | | 628,400 | | 89,534 | | 0 | | 2,466,667 | Joe D. Rainey | | SERP | | 5,338,166 | | 0 | | 983,000 | | 266,825 | | 0 | | 6,587,991 | | | Benefit Restoration | | 468,779 | | 0 | | 44,100 | | 28,025 | | 0 | | 540,904 | | | Elective Deferral | | 3,854,001 | | 0 | | 0 | | 358,073 | | 0 | | 4,212,074 | | | TOTAL | | 9,660,946 | | 0 | | 1,027,100 | | 652,923 | | 0 | | 11,340,969 | Mark J. Richard | | SERP | | 0 | | 0 | | 1,129,000 | | 0 | | 0 | | 1,129,000 | | | Benefit Restoration | | 132,636 | | 0 | | 30,567 | | 7,924 | | 0 | | 171,127 | | | Elective Deferral | | 1,450,417 | | 0 | | 0 | | 120,542 | | 0 | | 1,570,959 | | | TOTAL | | 1,583,053 | | 0 | | 1,159,567 | | 128,466 | | 0 | | 2,871,086 |
HALLIBURTON - 2016 Proxy Statementwww.halliburton.com | 44 | HALLIBURTON | 2020Proxy Statement | 48 |
Participants may elect to defer up to 75% of their annual base salary and up to 75% of their incentive compensation into the plan. Deferral elections must be made on an annual basis, including the type and timing of distribution. Plan earnings are based on the NEO’s choice of up to 12 investment options with varying degrees of risk, including the risk of loss. Investment options may be changed by the NEO daily. The amounts shown in the Aggregate Earnings in Last Fiscal Year column reflect the aggregate of all gains and losses on outstanding balances in 2015. Only the above-market interest is shown in the Summary Compensation Table, under Change in Pension Value and NQDC Earnings.Contents
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTSEmployment Contracts and Change-in-Control Arrangements
Employment Contracts Messrs. Lesar, Garcia, Brown, Miller, and RaineyAll of our NEOs have employment agreements with us. Underus that contain substantial non-compete and non-solicitation provisions post separation.
The employment agreements provide that if the terms of Mr. Lesar’s agreement a terminationis terminated by the employee for causegood reason or by death, disability, or retirement or his employment is a termination for (i) gross negligence or willful misconduct interminated by the performance of his duties and responsibilities, or (ii) a conviction of a felony. In the event we terminate Mr. LesarCompany for any reason other than cause or a fiduciary violation, all restrictions on restricted stock and units will lapse. In addition, in the case of a termination by the employee for cause, we are obligated to pay Mr. Lesar a severance payment equal to (i)good reason or termination by the value of any restricted shares that are forfeited because of termination, and (ii) five times his annual base salary. Under the terms of the agreements with Messrs. Garcia, Brown, Miller, and Rainey, the reasons for termination of employment (other than death) are defined as follows:
(i) | Retirement means either (a) retirement at or after normal retirement at age 65 (either voluntarily or under our retirement policy), or (b) voluntary termination of employment in accordance with our early retirement policy for other than a Good Reason. “Good Reason” means a termination of employment by employee because of (a) our material breach of any material provision of the employment agreement, or (b) a material reduction in employee’s rank or responsibility with us, provided that (i) employee provides written notice to us of the circumstances employee claims constitute “Good Reason” within 90 calendar days of the first to occur of such circumstances, (ii) such breach remains uncorrected for 30 calendar days following written notice, and (iii) employee’s termination occurs within 180 calendar days after the date that the circumstances employee claims constitute Good Reason first occurred. | | | (ii) | Permanent disability means the employee’s physical or mental incapacity to perform his or her usual duties with such condition likely to remain continuously and permanently as reasonably determined by the Compensation Committee in good faith. | | | (iii) | Voluntary termination means a termination of employment in the sole discretion and at the election of the employee for other than Good Reason. | | | (iv) | Termination for cause means our termination of employee’s employment for Cause. “Cause” means any of the following: (a) employee’s gross negligence or willful misconduct in the performance of the duties and services required of the employee; (b) employee’s final conviction of a felony; (c) a material violation of our Code of Business Conduct; or (d) employee’s material breach of any material provision of his or her employment agreement which remains uncorrected for 30 days following our written notice of such breach to employee. |
If the employment of Mr. Garcia terminatesCompany for any reason other than death, retirement (either at age 65cause or voluntarily priora fiduciary violation, the employee will receive a lump sum cash payment equal to age 65), permanent disability, voluntary termination, or termination for cause, he is entitled to eachtwo years of the following:his base salary then in effect.
• | A payment equal to one year’s base salary; and | | | • | A single lump sum cash payment equal to the value of any restricted shares that are forfeited because of termination. The payout is contingent upon compliance with a non-compete agreement and subject to vesting restrictions. |
If the employment of Mr. Brown terminates for any reason other than death, retirement (either at age 65 or voluntarily prior to age 65), permanent disability, voluntary termination or termination for cause, he is entitled to each of the following:
• | A payment equal to two years’ base salary; | | | • | At the Compensation Committee’s election, either the retention of all restricted shares following termination or a payment equal to the value of any restricted shares that are forfeited because of termination; | | | • | Any unpaid amounts earned under the Annual Performance Pay Plan in prior years; and | | | • | Any amount payable for the year under the Annual Performance Pay Plan in which his employment is terminated, determined as if he had remained employed for the full year. |
If the employment of Messrs. Miller or Rainey terminates for any reason other than death, retirement (either at age 65 or voluntarily prior to age 65), permanent disability, voluntary termination or termination for cause, the executive is entitled to each of the following:
• | A payment equal to two years’ base salary; and | | | • | A single lump sum cash payment equal to the value of any restricted shares that are forfeited because of termination. The payout is contingent upon compliance with a non-compete agreement and subject to vesting restrictions. |
Change-In-Control Arrangements We do not maintain individual change-in-control agreements or provide for excise tax gross-ups on any payments associated with a change-in-control. Some of our compensation plans, however, contain change-in-control provisions, which could result in payment of specific benefits. HALLIBURTON - 2016 Proxy Statement | 45 |
Under the Stock and Incentive Plan, in the event of a change-in-control, awards granted after February 13, 2019, are subject to double-trigger vesting, such that, if a participant is terminated due to involuntary termination without cause, death, disability, good reason (as defined in an employment agreement, or a similar constructive termination event, in each case, only if a severance benefit is payable upon termination of employment due to such event pursuant to an employment agreement) or other event as specified in the participant’s award document within the period beginning on the date of the public announcement of a transaction that, if consummated, would constitute a corporate change and ending on the date that is the earlier of the announcement of the termination of the proposed transaction or two years after the consummation of the transaction (a Qualifying Termination), the following will occur automatically: • | any outstanding options and stock appreciation rights shall become immediately vested and fully exercisable; | | exercisable for the full term thereof; | • | any restrictions on restricted stock awards shall immediately lapse; | | | • | all performance measures upon which an outstanding performance award is contingent are deemed achieved and the holder receivesshall receive a payment equal to the maximumtarget amount of the award he or she would have been entitled to receive, pro-rated to the effective date;receive; and | | | • | any outstanding cash awards, including stock value equivalent awards, immediately vest and are paid based on the vested value of the award. |
Under the Annual Performance Pay Plan: • | in the event of a change-in-control during a plan year, a participant experiencing a Qualifying Termination will be entitled to an immediate cash payment equal to the maximum dollartarget amount of the award he or she would have been entitled to for the year, prorated through the date of the change-in-control;receive, without proration; and | | | • | in the event of a change-in-control after the end of a plan year but before the payment date, a participant will be entitled to an immediate cash payment equal to the incentive earned for the plan year. |
Under the Performance Unit Program: • | in the event of a change-in-control during a performance cycle, a participant experiencing a Qualifying Termination will be entitled to an immediate cash payment equal to the maximumtarget amount of the award he or she would have been entitled to receive, for the performance cycle, pro-rated to the date of the change-in-control;without proration; and | | | • | in the event of a change-in-control after the end of a performance cycle but before the payment date, a participant will be entitled to an immediate cash payment equal to the incentiveaward earned for that performance cycle. |
Under the Employee Stock Purchase Plan, in the event of a change-in-control, unless the successor corporation assumes or substitutes new stock purchase rights: • | the purchase date for the outstanding stock purchase rights will be accelerated to a date fixed by the Compensation Committee prior to the effective date of the change-in-control; and | | | • | upon such effective date, any unexercised stock purchase rights will expire and we will refund to each participant the amount of his or her payroll deductions made for purposes of the Employee Stock Purchase Plan that have not yet been used to purchase stock. |
| HALLIBURTON | 2020Proxy Statement | 49 |
POST-TERMINATION OR CHANGE-IN-CONTROL PAYMENTSPost-Termination or Change-in-Control Payments
The following tables and narratives represent the impact of certain termination events or a change-in-control on each element of compensation for NEOs as of December 31, 2015.2019. | | | | | Termination Event | | | | | | Name | | | Payments | | | Resignation ($) | | | | Early Retirement w/o Approval ($) | | | | Early Retirement w/Approval ($) | | | | Normal Retirement ($) | | | | Term for Cause ($) | | | | Term w/o Cause ($) | | | | Change in Control ($) | | David J. Lesar | | | Severance | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 8,150,000 | | | | 0 | | | | | Annual Perf. Pay Plan | | | 0 | | | | 0 | | | | 5,250,000 | | | | 5,250,000 | | | | 0 | | | | 5,250,000 | | | | 5,250,000 | | | | | Restricted Stock | | | 0 | | | | 0 | | | | 11,019,361 | | | | 11,019,361 | | | | 0 | | | | 11,019,361 | | | | 11,019,361 | | | | | Stock Options | | | 112,806 | | | | 112,806 | | | | 112,806 | | | | 112,806 | | | | 112,806 | | | | 112,806 | | | | 112,806 | | | | | Performance Units | | | 0 | | | | 0 | | | | 9,980,213 | | | | 9,980,213 | | | | 0 | | | | 0 | | | | 9,980,213 | | | | | Nonqualified Plans | | | 24,549,615 | | | | 24,549,615 | | | | 24,549,615 | | | | 24,549,615 | | | | 24,549,615 | | | | 24,549,615 | | | | 0 | | | | | Health Benefits | | | 0 | | | | 12,000 | | | | 12,000 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | TOTAL | | | 24,662,421 | | | | 24,674,421 | | | | 50,923,995 | | | | 50,911,995 | | | | 24,662,421 | | | | 49,081,782 | | | | 26,362,380 | | Christian A. Garcia | | | Severance | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 436,500 | | | | 0 | | | | | Annual Perf. Pay Plan | | | 0 | | | | 0 | | | | 675,000 | | | | 675,000 | | | | 0 | | | | 675,000 | | | | 675,000 | | | | | Restricted Stock | | | 0 | | | | 0 | | | | 1,226,801 | | | | 1,226,801 | | | | 0 | | | | 1,226,801 | | | | 1,226,801 | | | | | Stock Options | | | 199,664 | | | | 199,664 | | | | 199,664 | | | | 199,664 | | | | 199,664 | | | | 199,664 | | | | 199,664 | | | | | Performance Units | | | 0 | | | | 0 | | | | 449,023 | | | | 449,023 | | | | 0 | | | | 0 | | | | 449,023 | | | | | Nonqualified Plans | | | 741,987 | | | | 741,987 | | | | 741,987 | | | | 741,987 | | | | 741,987 | | | | 741,987 | | | | 0 | | | | | Health Benefits | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | TOTAL | | | 941,651 | | | | 941,651 | | | | 3,292,475 | | | | 3,292,475 | | | | 941,651 | | | | 3,279,952 | | | | 2,550,488 | | James S. Brown | | | Severance | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 1,746,000 | | | | 0 | | | | | Annual Perf. Pay Plan | | | 0 | | | | 0 | | | | 1,980,000 | | | | 1,980,000 | | | | 0 | | | | 1,980,000 | | | | 1,980,000 | | | | | Restricted Stock | | | 0 | | | | 0 | | | | 9,118,602 | | | | 9,118,602 | | | | 0 | | | | 9,118,602 | | | | 9,118,602 | | | | | Stock Options | | | 30,726 | | | | 30,726 | | | | 30,726 | | | | 30,726 | | | | 30,726 | | | | 30,726 | | | | 30,726 | | | | | Performance Units | | | 0 | | | | 0 | | | | 3,311,570 | | | | 3,311,570 | | | | 0 | | | | 0 | | | | 3,311,570 | | | | | Nonqualified Plans | | | 6,127,559 | | | | 6,127,559 | | | | 6,127,559 | | | | 6,127,559 | | | | 6,127,559 | | | | 6,127,559 | | | | 0 | | | | | Health Benefits | | | 0 | | | | 12,000 | | | | 12,000 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | TOTAL | | | 6,158,285 | | | | 6,158,285 | | | | 20,580,457 | | | | 20,568,457 | | | | 6,158,285 | | | | 19,002,887 | | | | 14,440,898 | |
| | Termination Event | | Name | Payments | | Resignation ($) | | Early Retirement w/o Approval ($) | | Early Retirement w/Approval ($) | | Normal Retirement ($) | | Term for Cause ($) | | Term w/o Cause ($) | | Change in Control ($) | Jeffrey A. Miller | Severance | | 0 | | 0 | | 0 | | 0 | | 0 | | 3,000,000 | | 0 | Annual Perf. Pay Plan | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | Restricted Stock | | 0 | | 0 | | 11,522,776 | | 11,522,776 | | 0 | | 11,522,776 | | 7,437,901 | | Stock Options | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Performance Units | | 0 | | 0 | | 9,515,164 | | 9,515,164 | | 0 | | 0 | | 12,034,989 | | Nonqualified Plans | | 7,001,404 | | 7,001,404 | | 7,001,404 | | 7,001,404 | | 7,001,404 | | 7,001,404 | | 0 | | Health Benefits | | 0 | | 12,000 | | 12,000 | | 0 | | 0 | | 0 | | 0 | | TOTAL | | 7,001,404 | | 7,013,404 | | 28,051,344 | | 28,039,344 | | 7,001,404 | | 21,524,180 | | 19,472,890 | Lance Loeffler | Severance | | 0 | | 0 | | 0 | | 0 | | 0 | | 1,300,000 | | 0 | Annual Perf. Pay Plan | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Restricted Stock | | 0 | | 0 | | 2,205,286 | | 2,205,286 | | 0 | | 2,205,286 | | 1,192,228 | | Stock Options | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Performance Units | | 0 | | 0 | | 959,651 | | 959,651 | | 0 | | 0 | | 0 | | Nonqualified Plans | | 48,541 | | 48,541 | | 48,541 | | 48,541 | | 48,541 | | 48,541 | | 0 | | Health Benefits | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | TOTAL | | 48,541 | | 48,541 | | 3,213,478 | | 3,213,478 | | 48,541 | | 3,553,827 | | 1,192,228 | Eric J. Carre | Severance | | 0 | | 0 | | 0 | | 0 | | 0 | | 1,600,000 | | 0 | | Annual Perf. Pay Plan | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Restricted Stock | | 0 | | 0 | | 3,247,096 | | 3,247,096 | | 0 | | 3,247,096 | | 2,280,531 | | Stock Options | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Performance Units | | 0 | | 0 | | 2,628,527 | | 2,628,527 | | 0 | | 0 | | 4,174,520 | | Nonqualified Plans | | 2,466,667 | | 2,466,667 | | 2,466,667 | | 2,466,667 | | 2,466,667 | | 2,466,667 | | 0 | | Health Benefits | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | TOTAL | | 2,466,667 | | 2,466,667 | | 8,342,290 | | 8,342,290 | | 2,466,667 | | 7,313,763 | | 6,455,051 | Joe D. Rainey | Severance | | 0 | | 0 | | 0 | | 0 | | 0 | | 1,820,000 | | 0 | | Annual Perf. Pay Plan | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Restricted Stock | | 0 | | 0 | | 4,175,292 | | 4,175,292 | | 0 | | 4,175,292 | | 2,888,170 | | Stock Options | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Performance Units | | 0 | | 0 | | 3,505,453 | | 3,505,453 | | 0 | | 0 | | 5,560,452 | | Nonqualified Plans | | 11,340,969 | | 11,340,969 | | 11,340,969 | | 11,340,969 | | 11,340,969 | | 11,340,969 | | 0 | | Health Benefits | | 0 | | 12,000 | | 12,000 | | 0 | | 0 | | 0 | | 0 | | TOTAL | | 11,340,969 | | 11,352,969 | | 19,033,714 | | 19,021,714 | | 11,340,969 | | 17,336,261 | | 8,448,622 | Mark J. Richard | Severance | | 0 | | 0 | | 0 | | 0 | | 0 | | 1,450,000 | | 0 | Annual Perf. Pay Plan | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | Restricted Stock | | 0 | | 0 | | 2,487,939 | | 2,487,939 | | 0 | | 2,487,939 | | 1,200,817 | | Stock Options | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Performance Units | | 0 | | 0 | | 2,586,258 | | 2,586,258 | | 0 | | 0 | | 2,989,333 | | Nonqualified Plans | | 2,871,086 | | 2,871,086 | | 2,871,086 | | 2,871,086 | | 2,871,086 | | 2,871,086 | | 0 | | Health Benefits | | 0 | | 12,000 | | 12,000 | | 0 | | 0 | | 0 | | 0 | | TOTAL | | 2,871,086 | | 2,883,086 | | 7,957,283 | | 7,945,283 | | 2,871,086 | | 6,809,025 | | 4,190,150 |
HALLIBURTON - 2016 Proxy Statementwww.halliburton.com | 46 | HALLIBURTON | 2020Proxy Statement | 50 |
| | | | | Termination Event | | | | | | Name | | | Payments | | | Resignation ($) | | | | Early Retirement w/o Approval ($) | | | | Early Retirement w/Approval ($) | | | | Normal Retirement ($) | | | | Term for Cause ($) | | | | Term w/o Cause ($) | | | | Change in Control ($) | | Jeffrey A. Miller | | | Severance | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 1,940,000 | | | | 0 | | | | | Annual Perf. Pay Plan | | | 0 | | | | 0 | | | | 2,500,000 | | | | 2,500,000 | | | | 0 | | | | 2,500,000 | | | | 2,500,000 | | | | | Restricted Stock | | | 0 | | | | 0 | | | | 10,298,462 | | | | 10,298,462 | | | | 0 | | | | 10,298,462 | | | | 10,298,462 | | | | | Stock Options | | | 27,792 | | | | 27,792 | | | | 27,792 | | | | 27,792 | | | | 27,792 | | | | 27,792 | | | | 27,792 | | | | | Performance Units | | | 0 | | | | 0 | | | | 4,802,823 | | | | 4,802,823 | | | | 0 | | | | 0 | | | | 4,802,823 | | | | | Nonqualified Plans | | | 2,199,433 | | | | 2,199,433 | | | | 2,199,433 | | | | 2,199,433 | | | | 2,199,433 | | | | 2,199,433 | | | | 0 | | | | | Health Benefits | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | TOTAL | | | 2,227,225 | | | | 2,227,225 | | | | 19,828,510 | | | | 19,828,510 | | | | 2,227,225 | | | | 16,965,687 | | | | 17,629,077 | | Joe D. Rainey | | | Severance | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 1,619,900 | | | | 0 | | | | | Annual Perf. Pay Plan | | | 0 | | | | 0 | | | | 1,837,000 | | | | 1,837,000 | | | | 0 | | | | 1,837,000 | | | | 1,837,000 | | | | | Restricted Stock | | | 0 | | | | 0 | | | | 5,141,402 | | | | 5,141,402 | | | | 0 | | | | 5,141,402 | | | | 5,141,402 | | | | | Stock Options | | | 20,484 | | | | 20,484 | | | | 20,484 | | | | 20,484 | | | | 20,484 | | | | 20,484 | | | | 20,484 | | | | | Performance Units | | | 0 | | | | 0 | | | | 3,311,570 | | | | 3,311,570 | | | | 0 | | | | 0 | | | | 3,311,570 | | | | | Nonqualified Plans | | | 6,409,851 | | | | 6,409,851 | | | | 6,409,851 | | | | 6,409,851 | | | | 6,409,851 | | | | 6,409,851 | | | | 0 | | | | | Health Benefits | | | 0 | | | | 12,000 | | | | 12,000 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | TOTAL | | | 6,430,335 | | | | 6,442,335 | | | | 16,732,307 | | | | 16,720,307 | | | | 6,430,335 | | | | 15,028,637 | | | | 10,310,456 | |
Resignation.Resignation is defined as leaving employment with us voluntarily, without having attained early or normal retirement status (see the applicable sections below for information on what constitutes these statuses). Upon resignation, the following actions will occur for athe NEO’s various elements of compensation: • | Severance Pay.No severance would be paid to the NEO. | | | • | Annual Performance Pay Plan.No payment would be made to the NEO under the Performance Pay Plan. | | | • | Restricted Stock.Any restricted stock holdings would be forfeited upon the date of resignation. Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 20152019 table. | | | • | Stock Options.The NEO must exercise outstanding, vested options within 30-9030 - 90 days after the NEO’s resignation or the options will be forfeited as per the terms of the stock option agreements. Any unvested stock options would be forfeited. Stock option information can be found in the Outstanding Equity Awards at Fiscal Year End 20152019 table. | | | • | Performance Units.The NEO would not be eligible to receive payments under the Performance Unit Program. | | | • | Nonqualified Plans.Under all circumstances, the The NEO is entitled to any vested benefits under the applicable nonqualified plans as shown in the 20152019 Nonqualified Deferred Compensation table. Payments from the Halliburton Company Supplemental Executive Retirement Plan and Halliburton Company Benefit Restoration Plan are paid out of an irrevocable grantor trust held at State Street Bank and Trust Company.trust. The principal and income of the trust are treated as our assets and income for federal income tax purposes and are subject to the claims of our general creditors to the extent provided in the plan. The Halliburton Elective Deferral Plan is unfunded and we make payments from our general assets. Payments from these plans may be paid in a lump sum or in annual installments for a maximum ten-year period. | | | • | Health Benefits.The NEO wouldis not be eligible for the $12,000 credit to assist in paying for retiree medical costs because the NEO resigned from employment with us.costs. |
Early Retirement.Retirement.A NEO becomes eligible for early retirement by either attainingwhen the NEO has attained age 50 or by attaining 70 points via a combination of age plus55 with ten years of service.service or when the NEO’s age and years of service equals 70 points. Eligibility for early retirement does not guarantee retention of stock awards (lapse of forfeiture restrictions on restricted stock and ability to exercise outstanding options for the remainder of the stated term). Early retirement eligibility is a condition that must be met before the Compensation Committee will consider retention of stock awards upon separation from employment. For example, if a NEO is eligible for early retirement but is leaving us to go to work for a competitor, then the NEO’s stock awards would not be considered for retention. Early Retirement (Without Approval).The following actions will occur for aimpact on the NEO’s various elements of compensation:compensation is the same as described under Resignation except as follows: • | Severance Pay.No severance would be paid to the NEO. | | | • | Annual Performance Pay Plan.No payment would be made to the NEO under the Performance Pay Plan. | | | • | Restricted Stock.Any restricted stock holdings would be forfeited upon the date of early retirement. Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 2015 table. | | | • | Stock Options.The NEO must exercise outstanding, vested options within 30-90 days after the NEO’s early retirement or the options will be forfeited as per the terms of the stock option agreements. Any unvested stock options would be forfeited. Stock option information can be found in the Outstanding Equity Awards at Fiscal Year End 2015 table. | | | • | Performance Units.The NEO would not be eligible to receive payments under the Performance Unit Program. | | | • | Nonqualified Plans.Under all circumstances, the NEO is entitled to any vested benefits under the applicable nonqualified plans as shown in the 2015 Nonqualified Deferred Compensation table. Refer to theResignationsection for more information on Nonqualified Plans. | | | • | Health Benefits.A NEO that was age 40 or older as of December 31, 2004, and qualifies for early retirement under our health and welfare |
HALLIBURTON - 2016 Proxy Statement | 47 |
| plans, which requiresrequire that the NEO has attained age 55 with ten years of service or that the NEO’s age and years of service equals 70 points with a minimum of ten years of service, is eligible for a $12,000 credit toward retiree medical costs incurred prior to age 65. The credit is only applicable if the NEO chooses Halliburton retiree medical coverage. This benefit is amortized as a monthly credit applied to the cost of retiree medical coverage based on the number of months from the time of early retirement to age 65. For example, if a NEO is 10 years or 120 months away from age 65 at the time of the NEO’s early retirement, the NEO will receive a monthly credit in the amount of $100 ($12,000/120 months). Should the NEO choose not to elect coverage with Halliburton after the NEO’s separation, the NEO would not receive any cash in lieu of the credit. |
Early Retirement (With Approval).The following actions will occur for athe NEO’s various elements of compensation: • | Severance Pay.No severance would be paid to the NEO. | | | • | Annual Performance Pay Plan. If any of the NEOs were to retire prior to the end of the plan year for any reason other than death or disability, he would forfeit any payment due under the plan, unless the Compensation Committee determines that the payment should be prorated for the partial plan year. These payments usually occur no later than the end of February in the year following the plan year. | | | • | Restricted Stock.Any stock holdings restrictions would lapse upon the date of early retirement. Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 20152019 table. | | | • | Stock Options.The NEO will be granted retention of the NEO’s option awards. The unvested awards will continue to vest per the vesting schedule outlined in the NEO stock option agreements and any vested options will not expire until 10 years from the grant award date. Stock option information can be found in the Outstanding Equity Awards at Fiscal Year End 20152019 table. | | | • | Performance Units.The NEO will participate on a pro-ratedprorated basis for any Performance Unit Program cycles that have not been completed at the time of the NEO’s early retirement. These payments, if earned, are paid out and the NEO would receive payments at the same time as other participants, which is usually no later than March of the year following the close of the cycle. | | | • | Nonqualified Plans.Under all circumstances, the The NEO is entitled to any vested benefits under the applicable nonqualified plans as shown in the 20152019 Nonqualified Deferred Compensation table. Refer above to theResignationsection for more information on Nonqualified Plans. | | | • | Health Benefits.A NEO that was age 40 or older Same as of December 31, 2004 and qualifies for early retirementdescribed under our health and welfare plans is eligible for a $12,000 credit toward retiree medical costs. Refer to theEarly Retirement (Without Approval)section for more information on Health Benefits.. |
Normal Retirement.A NEO would be eligible for normal retirement should the NEO cease employment at age 65 or later. The following actions will occur for aimpact on the NEO’s various elements of compensation:compensation is the same as described under Early Retirement (With Approval) except as follows: • | Severance Pay.No severance would be paid to the NEO. | | | • | Annual Performance Pay Plan.If any of the NEOs were to retire prior to the end of the plan year for any reason other than death or disability, he would forfeit any payment due under the plan, unless the Compensation Committee determines that the payment should be prorated for the partial plan year. These payments usually occur no later than the end of February in the year following the plan year. | | | • | Restricted Stock.Any restricted stock holdings would vest upon the date of normal retirement. Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 2015 table. | | | • | Stock Options.The NEO will be granted retention of the NEO’s outstanding option awards. The unvested awards will continue to vest per the vesting schedule outlined in the NEO’s stock option agreements and any vested options will not expire until 10 years from the grant award date. Stock option information can be found in the Outstanding Equity Awards at Fiscal Year End 2015 table. | | | • | Performance Units.The NEO will participate on a pro-rated basis for any Performance Unit Program cycles that have not been completed at the time of the NEO’s normal retirement. These payments, if earned, are paid out and the NEO would receive payments at the same time as other participants, which is usually no later than March following the close of the cycle. | | | • | Nonqualified Plans.Under all circumstances, the NEO is entitled to any vested benefits under the applicable nonqualified plans as shown in the 2015 Nonqualified Deferred Compensation table. Refer to theResignationsection for more information on Nonqualified Plans. | | | • | Health Benefits.The NEO wouldis not be eligible for the $12,000 credit as the NEO would be age 65 or older at the time of normal retirement.to assist in paying for retiree medical costs. |
Termination (For Cause).Should we terminate thea NEO for cause, such as violating our Code of Business Conduct, the following actions will occur forimpact on the NEO’s various elements of compensation:compensation is the same as described under Resignation. • | Severance Pay.No severance would be paid to the NEO. | | | • | Annual Performance Pay Plan.No payment would be paid to the NEO under the Performance Pay Plan. | | | • | Restricted Stock.Any restricted stock holdings would be forfeited upon the date of termination. Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 2015 table. | | | • | Stock Options.The NEO must exercise outstanding, vested options within 30-90 days after the NEO’s termination or the options will be forfeited as per the terms of the stock option agreements. Any unvested stock options would be forfeited. Stock option information can be found in the Outstanding Equity Awards at Fiscal Year End 2015 table. | | | • | Performance Units.No payment would be paid to the NEO under the Performance Unit Program. | | | • | Nonqualified Plans.Under all circumstances, the NEO is entitled to any vested benefits under the applicable nonqualified plans as shown in the 2015 Nonqualified Deferred Compensation table. Refer to theResignationsection for more information on Nonqualified Plans. |
HALLIBURTON | - 2016 2020Proxy Statement | 4851 |
• | Health Benefits.The NEO would not be eligible for the $12,000 credit to assist in paying for retiree medical costs. |
Termination (Without Cause).Should we terminate a NEO with an employment agreement be terminated without cause, by us, such as termination at our convenience, then the provisions of the NEO’s employment agreement related to severance payments annual performance pay plan (if applicable), and lapsing of stock restrictions would apply. In the case of Messrs. Garcia, Brown, Miller, and Rainey, paymentsPayments for these items are conditioned on a release agreement being executed by the NEO. The following actions will occur forimpact on the NEO’s various elements of compensation:compensation is the same as described under Normal Retirement except as follows: • | Severance Pay.Severance is paid according to terms of the applicable employment agreement. Mr. Lesar’s severance multiple is five times base salary at the time of termination. Messrs. Brown, Miller, and RaineyEach NEO would receive severance in the amount of two times base salary at the time of termination, and Mr. Garcia would receive severance in the amount of one times base salary at the time of termination. Severance paid under the terms of the employment agreement fully satisfies any and all other claims for severance under our plans or policies. | | | • | Annual Performance Pay Plan.For Mr. Brown, participation is continued for the full year of separation and at the existing participation level at separation; however, any payments are made at the time all other participants receive payment and only if our performance yields a payment under the terms of the plan. If Messrs. Lesar, Garcia, Miller, or Rainey were terminated prior to the end of the plan year for any reason other than death or disability, he would forfeit any payment due under the plan, unless the Compensation Committee determines that a payment should be prorated for the partial plan year. These payments usually occur no later than the end of February in the year following the plan year. | | | • | Restricted Stock.For Messrs. Lesar and Brown, restricted shares under the Stock and Incentive Plan are automatically vested or are forfeited and an equivalent value is paid to the NEO at the Compensation Committee’s discretion. Messrs. Garcia, Miller and Rainey entered into non-compete agreements with us, and Messrs. Miller and Rainey agreed not to work for a competitor of ours for two years following separation and Mr. Garcia for one year following separation. If they comply with the terms of their agreements, they will receive a single lump sum payment equal to the value of any unvested restricted shares that were forfeited because of termination. Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 2015 table. | | | • | Stock Options.The NEO will be granted retention of the NEO’s outstanding option awards. The unvested awards will continue to vest per the vesting schedule outlined in the NEO’s stock option agreements and any vested options will not expire until 10 years from the grant award date. Stock option information can be found in the Outstanding Equity Awards at Fiscal Year End 2015 table. | | | • | Performance Units.No payment would be paid to the NEO under the Performance Unit Program. | | | • | Nonqualified Plans.Under all circumstances, the NEO is entitled to any vested benefits under the applicable nonqualified plans as shown in the 2015 Nonqualified Deferred Compensation table. Refer to theResignationsection for more information on Nonqualified Plans. | | | • | Health Benefits.The NEO would not be eligible for the $12,000 credit to assist in paying for retiree medical costs. |
Change-in-Control.Should a change-in-control take place, the following actions will occur for athe NEO’s various elements of compensation: • | Annual Performance Pay Plan.PlanIn the event of. A NEO experiencing a change-in-control during a plan year, a plan participant isQualifying Termination will be entitled to an immediate cash payment equal to the maximum dollartarget amount of the award he or she would have been entitled to for the year, pro-rated through the date of the change-in-control.receive, without proration. In the event of a change-in-control after the end of a plan year but before the payment date, the plan participantNEO is entitled to an immediate cash payment equal to the incentive earned for the plan year. | | | • | Restricted Stock.Stock. Restricted shares granted under the Stock and Incentive Plan prior to February 13, 2019, are automatically vested. Restricted shares granted on or after February 13, 2019, only vest in the event of a Qualifying Termination. Restricted stock holdings information can be found in the Outstanding Equity Awards at Fiscal Year End 20152019 table. | • | | • | Stock Options.Any outstanding options granted under the Stock and Incentive Plan prior to February 13, 2019, shall become immediately vested and fully exercisable by the NEO. No stock options were granted to NEOs in 2019. Stock option information can be found in the Outstanding Equity Awards at Fiscal Year End 20152019 table. | | | • | Performance Units.In For performance cycles beginning prior to 2019, in the event of a change-in-control during a performance cycle, NEOsthe NEO will be entitled to an immediate cash payment equal to the maximum amount he or she would have been entitled to receive for the performance cycle, pro-rated toprorated through the date of the change-in-control. For the 2019 performance cycle, a NEO experiencing a Qualifying Termination will be entitled to payment equal to the target amount of the award he or she would have been entitled to receive, without proration. In the event of a change-in-control after the end of a performance cycle but before the payment date, NEOs will bethe NEO is entitled to an immediate cash payment equal to the incentive earned for that performance cycle. |
HALLIBURTON - 2016 Proxy Statementwww.halliburton.com | 49 | HALLIBURTON | 2020Proxy Statement | 52 |
EQUITY COMPENSATION PLAN INFORMATIONEquity Compensation Plan Information
The following table provides certain information, as of December 31, 2015,2019, with respect to our equity compensation plans. Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | Equity compensation plans approved by security holders | | | 20,022,753 | | | | $43.90 | | | | 52,972,505 | | | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | | Equity compensation plans approved bysecurity holders | | | 25,320,569 | | $ | 41.58 | | 37,442,196 | Equity compensation plans not approvedby security holders | | | — | | — | | — | TOTAL | | | 20,022,753 | | | | $43.90 | | | | 52,972,505 | | | 25,320,569 | | $ | 41.58 | | 37,442,196 |
CEO Pay Ratio For 2019, the annual total compensation of our CEO was 146 times the median of the annual total compensation of all employees, based on annual total compensation of $12,770,467 for the CEO and $87,289 for the median employee. There was no material change in our employee demographics and compensation structure; therefore, the median employee identified in 2017 was utilized in our 2019 analysis. What follows is a description of the methodology used from 2017. This disclosure is based on an October 1, 2017, employee population of 52,833, of which 21,862 were U.S. employees and 30,971 were non-U.S. employees. We excluded from this employee population 2,637 non-U.S. employees from 47 countries as the total number of employees from these non-U.S. jurisdictions was less than 5% of our total employee population. After applying the exclusion, the total employee population was 50,196. Non-U.S. Employee Country Exclusions | Country | Headcount | | Country | Headcount | | Country | Headcount | | Country | Headcount | Ecuador | 442 | | Cameroon | 55 | | Chile | 17 | | Ukraine | 4 | Azerbaijan | 417 | | Panama | 51 | | Spain | 14 | | Hungary | 3 | Kazakhstan | 378 | | Poland | 48 | | Belgium | 11 | | Kenya | 3 | Congo | 158 | | Romania | 46 | | Philippines | 11 | | Uganda | 3 | Germany | 113 | | France | 35 | | Mozambique | 10 | | Switzerland | 2 | Italy | 113 | | Papua New Guinea | 31 | | Turkmenistan | 7 | | Equatorial Guinea | 2 | Netherlands | 110 | | Bangladesh | 28 | | Tanzania | 7 | | Turkey | 2 | Bolivia | 109 | | Denmark | 27 | | Austria | 6 | | South Africa | 2 | Trinidad & Tobago | 84 | | Peru | 23 | | Cyprus | 6 | | Albania | 1 | Ghana | 64 | | Suriname | 23 | | Israel | 5 | | Bulgaria | 1 | New Zealand | 59 | | Cote d’Ivoire | 21 | | South Korea | 4 | | Gabon | 1 | Vietnam | 57 | | Japan | 19 | | Myanmar | 4 | | | |
The median employee was identified using base pay, overtime pay, bonuses, allowances, and premiums. We used the total gross wages of all employees as of our determination date of October 1, 2017, as a reasonable estimate of the median total gross wages for the employee population and identified all employees within 1% of the median total gross wages. From this group we selected an employee as a reasonable representative of our median employee. Annual total compensation for both the CEO and the median employee was calculated in accordance with Item 402(c)(2)(x) of Regulation S-K. The annual total compensation for our CEO includes both the amount reported in the “Total” column of our 2019 Summary Compensation Table, $12,753,614, and the estimated value of our CEO’s health and welfare benefits, $16,853. Due to the flexibility afforded in calculating the CEO pay ratio, the ratio may not be comparable to CEO pay ratios presented by other companies. | HALLIBURTON | 2020Proxy Statement | 53 |
Proposal No. 4 Proposal to Amend and Restate the Halliburton Company Stock and Incentive Plan Introduction The Halliburton Company Stock and Incentive Plan was last approved by shareholders at the 2019 annual meeting and reserved 33,020,801 shares for issuance thereunder. The proposed amendment and restatement of the Stock and Incentive Plan replenishes the pool of shares of Halliburton common stock available for issuance under the Stock and Incentive Plan by adding 16,000,000 shares. This proposal also adds net operating profit after taxes and asset turns as potential performance criteria with respect to performance awards. The Stock and Incentive Plan is the only active plan used to grant awards of the types described in this proposal. Our Board is requesting that shareholders approve the amendment and restatement of the Stock and Incentive Plan which amendment and restatement was adopted by the Board on February 11, 2020, subject to shareholder approval. General In order to give Halliburton the flexibility to responsibly address its future equity compensation needs, Halliburton is requesting that shareholders approve the amendment and restatement which adds 16,000,000 shares to the Stock and Incentive Plan (the “Plan”). In addition, the amendment and restatement adds net operating profit after taxes and asset turns as potential performance criteria with respect to performance awards to accommodate the 2020 changes to the Annual Performance Pay Plan discussed under Board Responsiveness to Shareholder Feedback. The Plan contains the following important features: • | All awards under the Plan are subject to a one-year minimum vesting period, with the exception of 5% of shares available for awards; | • | The Plan contains a prohibition against “liberal share counting” or “liberal share recycling” with respect to shares available for awards under the Plan; | • | The Plan provides that all shares available for award are available for awards of incentive stock options; | • | Repricing of stock options and stock appreciation rights is prohibited unless prior shareholder approval is obtained; | • | Stock options and stock appreciation rights must be granted with an exercise price that is not less than 100% of the fair market value on the date of grant; | • | The ability to automatically receive replacement stock options when a stock option is exercised with previously acquired shares of Halliburton common stock, or so-called “stock option reloading”, is not permitted; | • | In any single calendar year, the value of awards granted under the Plan when added to any cash or other compensation paid to a non-management Director outside of the Plan may not exceed $750,000; and | • | For awards granted on or after February 13, 2019, a “double-trigger” change-of-control provision has been implemented. |
The 16,000,000 shares to be added under the Plan pursuant to the amendment and restatement of the Plan, in combination with the remaining authorized shares and shares added back into the Plan from forfeitures, are expected to satisfy Halliburton’s equity compensation needs through the 2021 annual meeting of shareholders. This being the case, if the amendment and restatement is approved, Halliburton anticipates seeking the authorization of additional shares under the Plan in 2021. HALLIBURTON Share Reserve(adjusted for 1997 and 2006 stock splits where applicable) | | | Shares authorized under the Stock and Incentive Plan | | 231,199,680 | Shares granted (less available cancellations and shares expired) from 1993 through March 1, 2020, from the Plan(1) | | 217,409,419 | Remaining shares available for grant as of March 1, 2020 | | 13,790,261 | Additional shares being requested under the amendment and restatement of the Plan | | 16,000,000 | Total shares available for grant under the amended and restated Stock and Incentive Plan | | 29,790,261 |
- 2016 Proxy Statement(1) | As of March 1, 2020, Halliburton had total outstanding awards of 27,360,812 options with a weighted average exercise price of $40.25 and a weighted average life of 6.14 years, and 18,454,010 full value awards. |
www.halliburton.com | 50 | HALLIBURTON | 2020Proxy Statement | 54 |
If the amendment and restatement of the Plan is approved by shareholders, the aggregate number of shares of Halliburton common stock that will be available for issuance under the Plan would increase to 29,790,261 shares, based on the estimates set forth above, all of which shall be available for awards of incentive stock options. Each share issued as restricted stock (or pursuant to the vesting of a stock unit or a performance share award) will count as the issuance of 1.60 shares reserved under the Plan, while each share granted as a stock option or stock appreciation right will count as the issuance of 1.0 share reserved under the Plan. If awards granted under the Plan are forfeited or terminate before being exercised, then the shares underlying those awards will again become available for awards under the Plan. The Plan does not provide for “liberal share counting” or “liberal share recycling”. Liberal share counting or liberal share recycling refers to circumstances where shares granted and exercised may be added back to an incentive plan for future issuance, including the following situations: • | Shares tendered or withheld in payment of an exercise price; | • | Shares tendered or withheld to satisfy tax withholding obligations; | • | Shares reacquired by an issuer with the proceeds of an option exercise price; and | • | Shares that are not issued due to a net settlement of an award. |
In each of the situations above, such shares are no longer available for awards under the Plan. For example, shares withheld from an award to satisfy tax withholding obligations are no longer available for awards under the Plan, and a stock appreciation right or option will be counted in full against the number of shares available for issuance under the Plan, regardless of whether a net settlement occurs resulting in a fewer number of shares issued than are covered by the stock appreciation right or option. The number of stock option shares or stock appreciation rights, singly or in combination, together with shares or share equivalents under performance awards granted to any individual who is an employee in any one calendar year, shall not in the aggregate exceed 1,000,000. The cash value determined as of the date of grant of any performance award not denominated in common stock granted to any individual who is an employee for any one calendar year shall not exceed $30,000,000. The amendment and restatement of the Plan provides that the value of awards (based on fair market value determined as of the date of grant) granted to a non-management Director in any single calendar year, when added to any cash or other compensation payable to such Director in the same calendar year, shall not exceed $750,000. In the event of any recapitalization, reorganization, merger, consolidation, combination, exchange, stock dividend, stock split, extraordinary dividend or divestiture (including a spin-off), or any other change in the corporate structure or shares of common stock occurring after the date of the grant of an award, the Compensation Committee shall make appropriate adjustments to the number and price of shares of common stock or other consideration subject to such awards and the award limits set forth in the preceding paragraph. The Stock and Incentive Plan Types of Awards The Plan provides for the grant of any or all of the following types of awards: • | stock options, including incentive stock options and nonqualified stock options; | • | stock appreciation rights, either independent of, or in connection with, stock options; | • | restricted stock; | • | restricted stock units; | • | performance awards; and | • | stock value equivalent awards. |
Term The Plan has an indefinite term. Any stock option granted in the form of an incentive stock option must satisfy the requirements of Section 422 of the Internal Revenue Code (IRC). 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 Compensation Committee. To date, only awards of nonqualified stock options, restricted stock, restricted stock units, and performance awards have been made under the Plan. | HALLIBURTON | 2020Proxy Statement | 55 |
Administration The Board has appointed the Compensation Committee to administer the Plan. Subject to the terms of the Plan, and to any approvals and other authority as the Board may reserve to itself from time to time, the Compensation Committee, consistent with the terms of the Plan, will have authority to: • | select the individuals to Contentsreceive awards and determine the timing, form, amount or value, and term of grants and awards, including providing for terms regarding the accelerated vesting of an award otherwise subject to minimum vesting provisions, and the conditions and restrictions, if any, subject to which grants and awards will be made and become payable under the Plan; | • | construe the Plan and prescribe rules and regulations for the administration of the Plan; and | • | make any other determinations authorized under the Plan as the Compensation Committee deems necessary or appropriate. |
Eligibility A broad group of our employees and employees of our affiliates are eligible to participate in the Plan. The selection of participants from eligible employees is within the discretion of the Compensation Committee. Non-management Directors are eligible to participate in the Plan. As of January 1, 2020, approximately 14,000 employees (including employees and executive officers) and nine non-management Directors were eligible for awards under the Plan as determined by the Compensation Committee. Stock Options Under the Plan, the Compensation Committee may grant awards in the form of stock options to purchase shares of common stock. The Compensation Committee will determine the number of shares subject to an option, the manner and time of the option’s exercise, and the exercise price per share of stock subject to the option. Options may not become exercisable in less than one year from the date of grant, provided that up to 5% of the shares available for grant under the Plan may be awarded without regard to the minimum one-year vesting period. The term of an option may not exceed ten years. We do not receive any consideration for granting stock options. 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. Repricing of stock options and reloading of stock options are prohibited unless prior shareholder approval is obtained. The Compensation Committee will designate each option as a nonqualified or an incentive stock option. The option exercise price may, at the discretion of the Compensation Committee, be paid by a participant in cash, shares of common stock, or a combination of cash and common stock. Stock Appreciation Rights The Plan also authorizes the Compensation Committee to grant stock appreciation rights either independent of, or in connection with, a stock option. The exercise price of a stock appreciation right will not be less than the fair market value of the common stock on the date the stock appreciation right is granted. If granted with a stock option, 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. Upon exercising a stock appreciation right, the holder receives for each share for which the stock appreciation right is exercised, an amount equal to the difference between the exercise price and the fair market value of the common stock on the date of exercise. Payment of that amount may be made in shares of common stock, cash, or a combination of cash and common stock, as determined by the Compensation Committee. Stock appreciation rights may not become exercisable in less than one year from the date of grant, provided that up to 5% of the shares available for grant under the Plan may be awarded without regard to the minimum one-year vesting period. The term of a stock appreciation right grant may not exceed ten years. Repricing of stock appreciation rights and reloading of stock appreciation rights are prohibited unless prior shareholder approval is obtained. We do not receive any consideration for granting stock appreciation rights. Restricted Stock The Plan provides that shares of common stock subject to specific restrictions may be awarded to eligible individuals as determined by the Compensation Committee. The Compensation Committee will determine the nature and extent of the restrictions on the shares, the duration of the restrictions, and any circumstance under which restricted shares will be forfeited. The restriction period may not be less than one year from the date of grant, provided that up to 5% of the shares available for grant under the Plan may be awarded without regard to the minimum one-year vesting period. During the period of restriction, recipients will have the right to receive dividends and the right to vote the shares. www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | 56 |
Restricted Stock Units The Plan authorizes the Compensation Committee to grant restricted stock units. A restricted stock unit is a unit evidencing the right to receive one share of common stock or an equivalent cash value equal to the fair market value of a share of common stock. The Compensation Committee will determine the nature and extent of the restrictions on the restricted stock units, the duration of the restrictions, and any circumstance under which restricted stock units will be forfeited. The restriction period may not be less than one year from the date of grant, provided that up to 5% of the shares available for grant under the Plan may be awarded without regard to the minimum one-year vesting period. The Compensation Committee may provide for the payment of dividend equivalents during the period of restriction, but recipients will not have the right to receive actual dividends or to vote the shares underlying the restricted stock units. Performance Awards The Plan permits the Compensation Committee to grant performance awards to eligible individuals. Performance awards are awards that are contingent, in whole or in part, on the achievement of one or more performance measures. Performance awards may be settled in cash or stock, as determined by the Compensation Committee. The number of shares or share equivalents under performance awards, singly or in combination, together with the number of stock option shares or stock appreciation rights, granted to any individual in any one calendar year, shall not in the aggregate exceed 1,000,000. The cash value (determined as of the date of grant) of any performance award that is not denominated in stock granted to any one participant in a calendar year may not exceed $30,000,000. The vesting period of a performance award may not be less than one year from the date of grant, provided that up to 5% of the shares available for grant under the Stock and Incentive Plan may be awarded without regard to the minimum one-year vesting period. The performance criteria that may be used by the Compensation Committee in granting performance awards consist of objective tests based on the following: • | earnings | • | cash flow | • | customer satisfaction | • | revenues | • | financial return ratios | • | profit return and margins | • | market share | • | working capital | • | net operating profit after-taxes | • | asset turns | • | cash value added performance | • | return on capital | • | shareholder return and/or value | • | operating profits (including EBITDA) | • | net profits | • | earnings per share | • | stock price | • | cost reduction goals | • | debt to capital ratio | • | any other criteria as determined by the Compensation Committee. |
The Compensation Committee may select one criterion or multiple criteria for measuring performance. The measurement may be based on our overall corporate performance, subsidiary or business unit performance, or comparative performance with other companies or other external measures of selected performance criteria. The Compensation Committee will also determine the length of time over which performance will be measured and the effect of a recipient’s death, disability, retirement, or other termination of service during the performance period. Stock Value Equivalent Awards The Plan permits the Compensation Committee to grant stock value equivalent awards to eligible individuals. 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 of the shares, over a specified period of time, pursuant to a vesting schedule, all as determined by the Compensation Committee. Stock value equivalent awards may not vest earlier than one year from the date of grant, provided that up to 5% of the shares available for grant under the Plan may be awarded without regard to the minimum one-year vesting period. 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 Compensation Committee will also determine the effect of a recipient’s death, disability, retirement, or other termination of service during the applicable period. | HALLIBURTON | 2020Proxy Statement | 57 |
Amendment The Plan provides that the Board may at any time terminate or amend the Plan. However, the Board may not, without approval of the shareholders, amend the Plan to effect a “material revision” of the Plan, where a “material revision” includes, but is not limited to, a revision that: • | materially increases the benefits accruing to a Holder under the Plan; | • | materially increases the aggregate number of securities that may be issued under the Plan; | • | materially modifies the requirements as to eligibility for participation in the Plan; or | • | changes the types of awards available under the Plan. |
No amendment or termination of the Plan shall, without the consent of the optionee or participant, alter or impair rights under any options or other awards previously granted. The summary of the Plan provided above is a summary of the principal features of the Plan. This summary, however, does not purport to be a complete description of all of the provisions of the Plan. It is qualified in its entirety by references to the full text of the Plan. A copy of the Plan can be found in Appendix A to this proxy statement. Change-in-Control Awards granted on or after February 13, 2019, are subject to double-trigger vesting, such that, if a participant is terminated due to involuntary termination without cause, death, disability, good reason (as defined in an employment agreement, or a similar constructive termination event, in each case, only if a severance benefit is payable upon termination of employment due to such event pursuant to an employment agreement) or other event as specified in the participant’s award document within the period beginning on the date of the public announcement of a transaction that, if consummated, would constitute a corporate change and ending on the date that is the earlier of the announcement of the termination of the proposed transaction or two years after the consummation of the transaction, the following will occur automatically: • | any outstanding options and stock appreciation rights shall become immediately vested and fully exercisable for the full term thereof; | • | any restrictions on restricted stock awards or restricted stock unit awards shall immediately lapse; | • | all performance measures upon which an outstanding performance award is contingent shall be deemed achieved and the holder shall receive a payment equal to the target amount of the award he or she would have been entitled to receive; and | • | any outstanding cash awards, including stock value equivalent awards, shall immediately vest and be paid based on the vested value of the award. |
Plan Benefits All awards to directors, executive officers, and employees are made at the discretion of the Compensation Committee. Therefore, the benefits and amounts that will be received or allocated under the Plan, as amended and restated, are not determinable at this time. Federal Income Tax Treatment The following summarizes the current U.S. federal income tax consequences generally arising for awards under the Plan. 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, we are 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 these circumstances, we will not be entitled to any deduction for federal income tax purposes. If the participant fails to hold the shares for that period, the disposal is treated as a disqualifying disposition. The gain on the 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. Any excess is long-term or short-term capital gain, depending on the holding period. Under these circumstances, we 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 nonqualified stock option does not have taxable income at the time of grant, but does have taxable income at the time of exercise. The income equals the difference between the exercise price of the shares and the market value of the shares on the date of exercise. We are entitled to a corresponding tax deduction for the same amount. The grant of a stock appreciation right will produce no U.S. federal tax consequences for the participant or us. The exercise of a stock appreciation right 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 us. www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | 58 |
A participant who has been granted an award of restricted shares of common stock or an award of restricted stock units will not realize taxable income at the time of the grant. 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 or cash received at that time over the amount, if any, paid for the shares. We will be entitled to a corresponding tax deduction. Dividends on restricted stock and dividend equivalents, if any, on restricted stock units paid to the participant during the restriction period will also be compensation income to the participant and will be deductible as compensation expense by us. A participant who has been granted a performance award will not realize taxable income at the time of the grant, and we will not be entitled to a tax deduction at that 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 we will be entitled to a corresponding tax deduction. The grant of a stock value equivalent award produces no U.S. federal income tax consequences for the participant or us. 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. We are entitled to a corresponding tax deduction for the same amount. In order for Halliburton to deduct the amounts described above, such amounts must constitute reasonable compensation for services rendered or to be rendered and must be ordinary and necessary business expenses. The ability to obtain a deduction for awards under the Plan could also be limited by IRC Section 280G, which provides that certain excess parachute payments made in connection with a change in control of an employer are not deductible. The ability to obtain a deduction for amounts paid under the Plan could also be affected by IRC Section 162(m), which limits the deductibility, for U.S. federal income tax purposes, of compensation paid to certain employees to $1 million during any taxable year. As a result, we may from time to time in the future, make award payments under the Plan to executive officers that are not deductible. We may withhold any taxes required by law to be withheld in connection with any award. IRC Section 409A generally provides that any deferred compensation arrangement which does not meet specific requirements regarding (i) timing of payouts, (ii) advance election of deferrals, or (iii) restrictions on acceleration of payouts will result in immediate taxation of any amounts deferred to the extent not subject to a substantial risk of forfeiture. Failure to comply with Section 409A may result in the early taxation (plus interest) to the holder of deferred compensation and the imposition of a 20% penalty on the holder on such deferred amounts included in the holder’s income. In general, to avoid a Section 409A violation, amounts deferred may only be paid out on separation from service, disability, death, a change-in-control, an unforeseen emergency (other than death), each as defined under Section 409A, or at a specified time. Furthermore, the election to defer generally must be made in the calendar year prior to performance of services, and any provision for accelerated payout, other than for the reasons specified above, may cause the amounts deferred to be subject to early taxation and to the imposition of the excise tax. Based on current guidance, we expect that we will be able to structure future awards in a manner that complies with Section 409A. General/Vote Required The closing price of our common stock on March 20, 2020, as traded on the NYSE, was $5.05 per share. The affirmative vote of the holders of a majority of the shares of Halliburton’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 RECOMMENDS AVOTE FORTHE APPROVAL OF THE PROPOSED AMENDMENT AND RESTATEMENT OF THE HALLIBURTON COMPANY STOCK AND INCENTIVE PLAN. |
| HALLIBURTON | 2020Proxy Statement | 59 |
ADDITIONAL INFORMATIONGeneralInformation
We are providing these proxy materials to you in connection with the solicitation by the Board of Directors of Halliburton Company of proxies to be voted at our 2020 Annual Meeting of Shareholders and at any adjournment or postponement of the meeting. By executing and returning the enclosed proxy, by following the enclosed voting instructions, or by voting via the Internet or by telephone, you authorize the persons named in the proxy to represent you and vote your shares on the matters described in the Notice of Annual Meeting. The Notice of Internet Availability of Proxy Materials is being sent to shareholders on or about April 7, 2020. Our Annual Report on Form 10-K, including financial statements, for the fiscal year ended December 31, 2019, accompanies this proxy statement. The Annual Report on Form 10-K shall not be considered as a part of the proxy solicitation materials or as having been incorporated by reference. Subject to space availability, all shareholders as of the record date, or their duly appointed proxies, may attend the Annual Meeting and each may be accompanied by one guest. Admission to the Annual Meeting will be on a first-come, first-served basis. Registration will begin at 8:00 a.m. and the Annual Meeting will begin at 9:00 a.m. Please note that we will ask you to present valid picture identification, such as a driver’s license or passport, when you check in at the registration desk. If you hold your shares in “street name” (that is, through a broker or other nominee), you must bring a proxy issued in your name from the record holder to the meeting. You may not bring cameras, recording equipment, electronic devices, large bags, briefcases, or packages into the Annual Meeting. If you attend the Annual Meeting, you may vote in person. If you are not present, you can only vote your shares if you have voted via the Internet, by telephone, or returned a properly executed proxy; in these cases, your shares will be voted as you specify. If you return a properly executed proxy and do not specify a vote, your shares will be voted in accordance with the recommendations of the Board. You may revoke the authorization given in your proxy at any time before the shares are voted at the Annual Meeting. We intend to hold our Annual Meeting in person. However, developments regarding the coronavirus (COVID-19) pandemic may change this. We are sensitive to the public health concerns our shareholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. We may also need to change the date or the time of the meeting. Please monitor our website atwww.halliburton.comfor updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date. As always, we encourage you to vote your shares prior to the Annual Meeting. It is important that you retain a copy of the control number found on the proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials, as such number will be required in order for shareholders to gain access to any meeting held solely by means of remote communication. The record date for determination of the shareholders entitled to vote at the Annual Meeting is the close of business on March 20, 2020. Our common stock, par value $2.50 per share, is our only class of capital stock that is outstanding. As of March 20, 2020, there were 873,350,914 shares of our stock outstanding. Each outstanding share of common stock is entitled to one vote on each matter submitted to the shareholders for a vote at the Annual Meeting. We will keep a complete list of shareholders entitled to vote at our principal executive offices for ten days before and will have the list available at the Annual Meeting. Our principal executive offices are located at 3000 N. Sam Houston Parkway East, Administration Building, Houston, Texas 77032. Votes cast by proxy or in person at the Annual Meeting will be counted by the persons we appoint to act as election inspectors for the Annual Meeting. Except as set forth below, the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter will be the act of the shareholders. Shares for which a shareholder has elected to abstain on a matter will count for purposes of determining the presence of a quorum and, except as set forth below, will have the effect of a vote against the matter. Each Director shall be elected by the vote of the majority of the votes cast by holders of shares represented in person or by proxy and entitled to vote in the election of Directors, provided that if the number of nominees exceeds the number of Directors to be elected and all shareholder-proposed nominees have not been withdrawn before the tenth (10th) day preceding the day we mail the Notice of Internet Availability of Proxy Materials to shareholders for the Annual Meeting, the Directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the election of Directors. A majority of the votes cast means that the number of shares voted “for” a Director must exceed the number of votes cast “against” that Director; we will not count abstentions. As a condition to being nominated by the Board for continued service as a Director, each Director nominee has signed and delivered to the Board an irrevocable letter of resignation limited to and conditioned on that Director failing to achieve a majority of the votes cast at an election where Directors are elected by majority vote. For any Director nominee who fails to be elected by a majority of votes cast, where Directors are elected by majority vote, his or her irrevocable letter of resignation will be deemed tendered on the date the election results are certified. Such resignation shall only be effective upon acceptance by the Board. The election inspectors will treat broker non-vote shares, which are shares held in street name that cannot be voted by a broker on specific 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. In determining the outcome of any matter for which the broker does not have discretionary authority to vote, however, those shares will not have any effect on that matter. A broker may be entitled to vote those shares on other matters. In accordance with our confidential voting policy, no particular shareholder’s vote will be disclosed to our officers, Directors, or employees, except: • | as necessary to meet legal requirements and to assert claims for and defend claims against us; | • | when disclosure is voluntarily made or requested by the shareholder; | • | when the shareholder writes comments on the proxy card; or | • | in the event of a proxy solicitation not approved and recommended by the Board. |
The proxy solicitor, the election inspectors, and the tabulators of all proxies, ballots, and voting tabulations are independent and are not our employees. www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | 60 |
AdditionalInformation Involvement in Certain Legal Proceedings There are no legal proceedings to which any of our Directors, or executive officers, or any associate of any of our Directors or executive officers is a party adverse to us or has a material interest adverse to us. Advance Notice Procedures Under our By-laws, no business, including nominations of a person for election as a director,Director, may be brought before an Annual Meeting unless it is specified in the notice of the Annual Meeting or is otherwise brought before the Annual Meeting by or at the direction of the Board or by a stockholdershareholder who meets the requirements specified in our By-laws and has delivered notice to us (containing the information specified in the By-laws). To be timely, a stockholder’sshareholder’s notice for matters to be brought before the Annual Meeting of StockholdersShareholders in 20172021 must be delivered to or mailed and received at our principal executive office specified on page 2 of this proxy statementoffices, 3000 N. Sam Houston Parkway East, Administration Building, Houston, TX 77032, not less than 90 days nor more than 120 days prior to the anniversary date of the 20162020 Annual Meeting of Stockholders,Shareholders, or no later than February 17, 201718, 2021, and no earlier than January 18, 2017.19, 2021. These requirements are separate from and in addition to the SEC’s requirements that a stockholdershareholder must meet in order to have a stockholdershareholder proposal included in our proxy statement. This advance notice requirement does not preclude discussion by any stockholdershareholder of any business properly brought before the Annual Meeting in accordance with these procedures. Proxy Solicitation Costs We are soliciting the proxies accompanying this proxy statement and we will bear the cost of soliciting those proxies. We have retained Georgeson Inc.Innisfree M&A Incorporated to aid in the solicitation of proxies. For these services, we will pay GeorgesonInnisfree a fee of $15,000$17,500 and reimburse it for out-of-pocket disbursements and expenses. Our officers and employees may solicit proxies personally and by telephone or other electronic communications with some stockholdersshareholders if proxies are not received promptly. We will, upon request, reimburse banks, brokers, and others for their reasonable expenses in forwarding proxies and proxy materials to beneficial owners of our stock. StockholderShareholder Proposals for the 20172021 Annual Meeting
StockholdersShareholders interested in submitting a proposal for inclusion in the proxy materials for the Annual Meeting of StockholdersShareholders in 20172021 may do so by following the procedures prescribed in SEC Rule 14a-8. To be eligible for inclusion, stockholdershareholder proposals must be received by our Corporate Secretary at 3000 N. Sam Houston Parkway East, Administration Building, Houston, TX 77032, no later than December 6, 2016.8, 2020. The 20172021 Annual Meeting will be held on May 17, 2017.19, 2021.
| HALLIBURTON | - 2016 2020Proxy Statement | 5161 |
OTHER MATTERSOtherMatters
As of the date of this proxy statement, we know of no business that will be presented for consideration at the Annual Meeting other than the matters described in this proxy statement. If any other matters should properly come before the Annual Meeting for action by stockholders,shareholders, it is intended that proxies will be voted on those matters in accordance with the judgment of the person or persons voting the proxies. By Authority of the Board of Directors,
Robb L. Voyles
Executive Vice President, Secretary and General CounselChief Legal Officer
April 5, 20167, 2020 HALLIBURTON - 2016 Proxy Statementwww.halliburton.com | 52 | HALLIBURTON | 2020Proxy Statement | 62 |
APPENDIX AppendixA
Corporate Governance GuidelinesHalliburton Company Stock and Incentive Plan
RevisedAs Amended and Restated Effective February 11, 2020
The purpose of the Halliburton Company Stock and Incentive Plan (the “Plan”) is to provide a means whereby Halliburton Company, a Delaware corporation (the “Company”), and its Subsidiaries may attract, motivate and retain highly competent employees and to provide a means whereby selected employees can acquire and maintain stock ownership and receive cash awards, thereby strengthening their concern for the long-term welfare of the Company. The Plan is also intended to provide employees with additional incentive and reward opportunities designed to enhance the profitable growth of the Company over the long term. A further purpose of the Plan is to allow awards under the Plan to non-management Directors in order to enhance the Company’s ability to attract and retain highly qualified Directors. Accordingly, the Plan provides for granting Incentive Stock Options, Options which do not constitute Incentive Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards, Stock Value Equivalent Awards, or any combination of the foregoing, as is best suited to the circumstances of the particular employee or non-management Director as provided herein. The Plan was established February 18, 1993, as the Halliburton Company 1993 Stock and Incentive Plan, has been amended from time to time thereafter. The Plan as amended and restated herein was adopted by the Board on February 11, 2020, subject to approval by the Company’s stockholders, and will become effective as of January 1, 2015the date of such approval. The Board of Directors has adopted these Guidelines to assist it infollowing definitions shall be applicable throughout the exercise of its responsibilities. These Guidelines are reviewed annuallyPlan unless specifically modified by the Nominating and Corporate Governance Committee and revised as appropriate.any paragraph: (a) | “Award” means, individually or collectively, any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Award or Stock Value Equivalent Award. | (b) | “Award Document” means the relevant award agreement or other document containing the terms and conditions of an Award. | (c) | “Beneficial Owners” shall have the meaning set forth in Rule 13d-3 promulgated under the Exchange Act. | (d) | “Board” means the Board of Directors of Halliburton Company. | (e) | “Cause” shall have the meaning set forth in the Participant’s Employment Agreement, or, if there is no Employment Agreement or the Employment Agreement does not define “Cause,” “Cause” shall have the meaning set forth in an Award Document, or, if the Award Document does not define “Cause”, “Cause” shall mean: |
| (i) | conduct involving fraud or misuse of the funds or other property of the Company; or | | (ii) | gross negligence or willful misconduct in the performance of duties; or | | (iii) | indictment of a felony, or a misdemeanor involving moral turpitude; or | | (iv) | material violation of Company policy, including the Company’s Code of Business Conduct. |
(f) | “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. | (g) | “Committee” means the committee selected by the Board to administer the Plan in accordance with Paragraph (a) of Article IV of the Plan. | (h) | “Common Stock” means the Common Stock, par value $2.50 per share, of the Company. | (i) | “Company” means Halliburton Company, a Delaware corporation. | (j) | “Corporate Change” shall conclusively be deemed to have occurred on a Corporate Change Effective Date if an event set forth in any one of the following paragraphs shall have occurred: |
| (i) | any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 20% or more of the combined voting power of the Company’s then outstanding securities; or | | (ii) | the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of Directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the Directors then still in office who either were |
The Board believes that the primary responsibility of the Directors is
| HALLIBURTON | 2020Proxy Statement | A-1 |
| | | | A. | EvaluateDirectors on the performance of the Chief Executive Officer and take appropriate action, including removal, when warranted. Specifically:date hereof or whose appointment, election, or nomination for election was previously so approved or recommended; or | | | (iii) | 1. | In an executive session, each year, the Lead Director shall facilitate the discussionthere is consummated a merger or consolidation of the non-management Directors to evaluate the performanceCompany or any direct or indirect Subsidiary of the Chief Executive Officer. In evaluatingCompany with any other corporation, other than (A) a merger or consolidation which would result in the Chief Executive Officer, the non-management Directors shall consider the Chief Executive Officer’s performance in both qualitative and quantitative areas, including: | | | | | | a. | Leadership and vision; | | | | | | | b. | Integrity; | | | | | | | c. | Keeping the Board informed on matters affecting Halliburton and its operating units; | | | | | | | d. | Performancevoting securities of the business (includingCompany outstanding immediately prior to such measurements as total stockholder return, health, safety and environmental performance, and achievement of financial objectives and goals); | | | | | | | e. | Development and implementation of initiativesmerger or consolidation continuing to provide long-term economic benefits to Halliburton; | | | | | | | f. | Accomplishment of strategic objectives; and | | | | | | | g. | Development of management. | | | | | | | | The Lead Director will communicate the evaluation to the Chief Executive Officer. | | | | | | | | While the Lead Director communicates the evaluation to the Chief Executive Officer, the Compensation Committee meets in an independent session to review the performance evaluationrepresent (either by remaining outstanding or by being converted into voting securities of the Chief Executive Officer andsurviving entity or any parent thereof), in combination with the market study conductedownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by an independent, outside compensation consultant. Based upon such review, the Compensation Committee will generate the Chief Executive Officer’s compensation recommendation for the upcoming fiscal year. The Compensation Committee will then present its recommendation to the non-management Directors when they reconvene in an executive session. | | | | | | 2. | The non-management Directors will set the Chief Executive Officer’s compensation for the next year based upon the recommendationPerson any securities acquired directly from the Compensation Committee. | | | | B. | Select, evaluate, and set the compensationCompany or any of executive management of Halliburton. | | | C. | Annually review and evaluate the succession plans and management development programs for all members of executive management, including the Chief Executive Officer. Specifically, the Board will oversee a Chief Executive Officer succession management process, which will: | | | | 1. | Develop criteria for the CEO position that reflects Halliburton’s business strategy; | | | | | 2. | Utilize a formal assessment process to evaluate CEO candidates; | | | | | 3. | Identify and develop internal candidates for the CEO position; | | | | | 4. | Ensure non-emergency CEO planning at least three (3) years before an expected transition; and | | | | | 5. | Develop and maintain an emergency CEO succession plan. | | | | D. | Conduct periodic reviews of and approve strategic and business plans, and monitor corporate performance against such plans. | | | E. | Review: | | | | 1. | Applicable laws and regulations, including periodic updates from management provided to the Health, Safety and Environment Committee regarding health, safety and environmental laws and regulations applicable to Halliburton’s major areas of operation; | | | | | 2. | Updates from management, which shall be provided at least once per year, regarding any political contributions made by Halliburton to U.S. local, state and federal government officials who oversee or regulate Halliburton’s operations, including any expenditures on lobbyists and political action committees, and any contributions to U.S. trade organizations; | | | | | 3. | Maintenance of accounting, financial, disclosure andits affiliates other controls; | | | | | 4. | Adequacy of compliance systems and controls; | | | | | 5. | Policies to govern corporate conduct and compliance, and adopt the same; and | | | | | 6. | Matters of corporate governance. | | | | F. | Conduct an annual evaluation of the overall effectiveness of the Board. | | |
HALLIBURTON - 2016 Proxy Statement | A-1 |
Board Structure
| | | | A. | Chairman of the Board and Chief Executive Officer: The Board believes that, under normal circumstances, the Chief Executive Officer should also serve as the Chairman of the Board. The Chairman of the Board and Chief Executive Officer is responsible to shareholders for the overall management and functioning of Halliburton. Notwithstanding the foregoing, on an annual basis the Board will consider whether it is appropriate that the Chairman of the Board and the Chief Executive Officer be the same individual and, if it determines that it is no longer appropriate, will take the necessary steps to have a different individual appointed to each of the positions. | | | B. | Lead Director: If the offices of Chairman of the Board and Chief Executive Officer are held by the same person, the independent members of the Board will, after considering the recommendation of the Nominating and Corporate Governance Committee, annually elect an independent Director to servethan in a lead capacity. Although elected annually, the Lead Independent Director is generally expected to serve for more than one year. The Lead Director of the Board shall preside at each executive session of the non-management Directors and each executive session of the independent Directors and, in his or her absence, the independent Directors shall select one of their numbers to preside. The Lead Director is responsible for periodically scheduling and conducting separate meetings and coordinating the activities of the non-management and independent Directors, providing input into and approving agendas for Board meetings and performing various other duties as may be appropriate, including advising the Chairman of the Board. | | | C. | Director Independence: The Nominating and Corporate Governance Committee will review the definition of independence and compliance with these guidelines periodically. | | | | 1. | At least three-fourths of the members of the Board shall be independent Directors. In order to be independent, a Director cannot have a material relationshipconnection with the Company. A Director will not be considered independent if he or she: | | | | | | a) | Is or has been employedacquisition by the Company or any of its affiliates of a business) representing 20% or more of the combined voting power of the Company’s then outstanding securities; or | | (iv) | the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale, disposition, lease or exchange by the Company of all or substantially all of the Company’s assets, other than a sale, disposition, lease or exchange by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. |
| Notwithstanding the foregoing, a “Corporate Change” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the Common Stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions. | (k) | “Corporate Change Effective Date” shall mean: |
| (i) | the first date that the direct or indirect ownership of 20% or more combined voting power of the Company’s outstanding securities results in a Corporate Change as described in clause (i) of such definition above; or | | (ii) | the date of the election of Directors that results in a Corporate Change as described in clause (ii) of such definition; or | | (iii) | the date of the merger or consideration that results in a Corporate Change as described in clause (iii) of such definition; or | | (iv) | the date of stockholder approval that results in a Corporate Change as described in clause (iv) of such definition. |
(l) | “Employment Agreement” shall mean a written and active executive agreement between the Company, Halliburton Energy Services, Inc. or Halliburton Worldwide Resources, LLC and a Participant who is an officer, addressing the terms and conditions of the Participant’s employment, and shall include such agreements pertaining to at-will employment. | (m) | “Exchange Act” means the Securities Exchange Act of 1934, as amended. | (n) | “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 or, in the preceding five calendar years,sole discretion of the Committee for purposes of determining the Fair Market Value of the Common Stock at the time of exercise of an Option or a Stock Appreciation Right, such Fair Market Value shall be the prevailing price of the Common Stock as of the time of exercise. If the Common Stock is not then listed or quoted 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. | (o) | “Holder” means an employee or non-management Director of the Company who has been granted an Award. | (p) | “Immediate Family” means, with respect to a particular Holder, the Holder’s spouse, parent, brother, sister, children and grandchildren (including adopted and step children and grandchildren). | (q) | “Incentive Stock Option” means an Option within the meaning of Section 422 of the Code. | (r) | “Minimum Criteria” means a Restriction Period that is not less than one (1) year from the date of grant of an Option, a Stock Appreciation Right, a Restricted Stock Award, Restricted Stock Unit Award, a Performance Award or a Stock Equivalent Award, such that the first time-based vesting event will occur no sooner than the first anniversary of the date of grant. | (s) | “Minimum Criteria Exception” means that 5% of the total number of shares available for Awards under the Plan may have a Restriction Period that is less than the Minimum Criteria. |
www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | A-2 |
(t) | “non-management Director” means a member of the Director’s immediate familyBoard who is not an employee or former employee of the Company or its Subsidiaries. | (u) | “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. | (v) | “Option Agreement” means a written agreement between the Company and a Holder with respect to an Option. | (w) | “Optionee” means a Holder who has been employedgranted an Option. | (x) | “Parent Corporation” shall have the meaning set forth in Section 424(e) of the Code. | (y) | “Performance Award” means an Award granted under Article XI of the Plan. | (z) | “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an Executive Officeremployee benefit plan of the Company or any of its affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. | (aa) | “Plan” means the Halliburton Company Stock and Incentive Plan, as amended and restated. | (bb) | “Protected Period” means the period beginning on the date of the public announcement of a transaction that, if consummated, would result in a Corporate Change and ending on the date that is the earlier of (i) the announcement of the termination of the proposed transaction or (ii) two years after the Corporate Change Effective Date. | (cc) | “Qualifying Termination” means, with respect to an Award granted on or after February 13, 2019, a Holder’s termination of service during a Protected Period due to involuntary termination without Cause, death, disability, Good Reason (as defined in an Employment Agreement, or a similar constructive termination event, in each case, only if a severance benefit is payable upon termination of employment due to such event pursuant to an Employment Agreement) or other event as specified in the preceding five calendar years;Holder’s Award Document. | (dd) | | | “Restricted Stock Award” means an Award granted under Article IX of the Plan. | (ee) | “Restricted Stock Award Agreement” means a written agreement between the Company and a Holder with respect to a Restricted Stock Award. | (ff) | b)“Restricted Stock Unit” means a unit evidencing the right to receive one share of Common Stock or an equivalent value equal to the Fair Market Value of a share of Common Stock (as determined by the Committee) that is restricted or subject to forfeiture provisions. | (gg) | Has received“Restricted Stock Unit Award” means an Award granted under Article X of the Plan. | (hh) | “Restricted Stock Unit Award Agreement” means a written agreement between the Company and a Holder with respect to a Restricted Stock Unit Award. | (ii) | “Restriction Period” means a period of time beginning as of the date upon which an Option, a Stock Appreciation Right, a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Award or a Stock Value Equivalent Award is made pursuant to the Plan and ending as of the date upon which all or a portion of the Option or Stock Appreciation Right becomes exercisable or the Common Stock or cash subject to a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Award or a Stock Value Equivalent Award is issued (if not previously issued), no longer restricted or subject to forfeiture provisions, but shall not include restrictions associated with deferral of vested Awards. | (jj) | “Spread” means, in the current calendar year, incase of a Stock Appreciation Right, an amount equal to the excess, if any, of the immediately preceding three calendar years or during any twelve-month period withinFair Market Value of a share of Common Stock on the last three years, more than $120,000 in direct compensation or personal remuneration fromdate such right is exercised over the exercise price of such Stock Appreciation Right. | (kk) | “Stock Appreciation Right” means an Award granted under Article VIII of the Plan. | (ll) | “Stock Appreciation Rights Agreement” means a written agreement between the Company other than director’s fees, committee fees and pensiona Holder with respect to an Award of Stock Appreciation Rights. | (mm) | “Stock Value Equivalent Award” means an Award granted under Article XII of the Plan. | (nn) | “Subsidiary” means a company (whether a corporation, partnership, joint venture or other formsform of deferred compensation for prior service as a Director (provided such compensation is not contingent in any way on continued service); | | | | | | | c) | Has an immediate family member who has received during any twelve-month period within the last three years, more than $120,000 in direct compensation or personal remuneration from the Company, other than director’s fees, committee fees and pension or other forms of deferred compensation for prior service as a Director (provided such compensation is not contingent in any way on continued service); | | | | | | | d) | (i) is a current partner or employee of the Company’s external auditor or (ii) during the past three years, was a partner or employee of the Company’s external auditor and personally worked on the Company’s audit within that time; | | | | | | | e) | Has an immediate family member who (i) is a current partner of the Company’s external auditor, (ii) is a current employee of the Company’s external auditor and personally works on the Company’s audit or (iii) during the past three years, was a partner or employee of the Company’s external auditor and personally worked on the Company’s audit within that time; | | | | | | | f) | Is a partner, member or officer of, or employed in a similar position with, any entity that provides accounting, consulting, legal, investment banking or financial advisory services to the Company for which such entity receives payments from the Company in excess of $120,000 per year; provided that this provision does not apply to a Director who is a limited partner or non-managing member of, or is employed in a similar position with, such entity and has no active role in providing such services to the Company; | | | | | | | g) | Is a current employee, or has an immediate family member who is a current executive officer, of an entity that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other entity’s consolidated gross revenues; | | | | | | | h) | Is or has been within the preceding three years part of an interlocking directorateentity) in which the Chief Executive OfficerCompany or anothera corporation in which the Company owns a majority of the shares of capital stock, directly or indirectly, owns a greater than 20% 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. | (oo) | “Successor Holder” shall have the meaning given such term in Paragraph (f) of Article XV. |
III. | Effective Date and Duration of the Plan |
The Plan as amended and restated herein was adopted by the Board on February 11, 2020, is subject to approval by the Company’s stockholders and will become effective as of the date of such approval. 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 and Restricted Stock Unit Awards have lapsed and all Performance Awards and Stock Value Equivalent Awards have been satisfied. (a) | Composition of Committee: The Plan shall be administered by a Committee of Directors of the Company which shall be appointed by the Board. |
| HALLIBURTON | 2020Proxy Statement | A-3 |
(b) | Powers: The Committee shall have authority, in its discretion, to determine which eligible individuals 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, Restricted Stock Award and Restricted Stock Unit Award, and the value of each Performance Award and Stock Value Equivalent Award. The Committee shall have the authority, in its discretion, to establish the terms and conditions applicable to any Award, subject to any specific limitations or provisions of the Plan. In making such determinations the Committee may take into account the nature of the services rendered by the respective individuals, their responsibility level, their present and potential contribution to the Company’s success and such other factors as the Committee in its discretion shall deem relevant. Notwithstanding any provision of the Plan to the contrary, the Committee may provide for the acceleration of vesting or exercisability of an Award upon a Corporate Change, upon a termination of employment or service by reason of death, disability, retirement or otherwise or for any other reason. | (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 Award Documents 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 Award Document relating to an Award in the manner and to the extent the Committee shall deem expedient to carry the Award into effect. The determinations of the Committee on the matters referred to in this Article IV shall be conclusive. | (d) | Delegation of Authority. The Committee may delegate some or all of its power to the Chief Executive Officer of the Company serves onas the compensation committeeCommittee deems appropriate; provided, however, that the Committee may not delegate its power with regard to the selection for participation in the Plan of another entity that employs the Director,an officer or an immediate family memberother person subject to Section 16 of the Director,Exchange Act or decisions concerning the timing, pricing or amount of an Award to such an officer or other person and any delegation of the power to grant Awards shall be permitted by applicable law. | (e) | Engagement of an Agent. The Company may, in its discretion, engage an agent to (i) maintain records of Awards and Holders’ holdings under the Plan, (ii) execute sales transactions in shares of Common Stock at the direction of Holders, (iii) deliver sales proceeds as directed by Holders, and (iv) hold shares of Common Stock owned without restriction by Holders, including shares of Common Stock previously obtained through the Plan that are transferred to the agent by Holders at their discretion. Except to the extent otherwise agreed by the Company and the agent, when an individual loses his or her status as an Executive Officer;employee or non-management Director of the Company, the agent shall have no obligation to provide any further services to such person and the shares of Common Stock previously held by the agent under the Plan may be distributed to the person or his or her legal representative. |
V. | Grant of Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards and Stock Value Equivalent Awards; Shares Subject to the Plan |
(a) | | | | | i) | Is or has an immediate family member who is currently a partyAward Limits. The Committee may from time to time grant Awards to one or more personalindividuals 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 29,790,261 shares, all of which shall be available for Awards of Incentive Stock Options. Shares issued as Restricted Stock Awards, Restricted Stock Unit Awards or pursuant to Performance Awards will count against the shares available for issuance under the Plan as 1.60 shares for every 1 share issued in connection with the Award. Notwithstanding anything contained herein to the contrary, the number of Option shares or Stock Appreciation Rights, singly or in combination, together with shares or share equivalents under Performance Awards granted to any Holder who is an employee in any one calendar year, shall not in the aggregate exceed 1,000,000. The cash value determined as of the date of grant of any Performance Award not denominated in Common Stock granted to any Holder who is an employee in any one calendar year shall not exceed $30,000,000. The fair market value, determined as of the date of grant, of Awards granted to a Holder who is a non-management Director in any one calendar year, when added to any cash or other compensation payable to such a Holder in such calendar year, shall not exceed $750,000. Any 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. If Awards are forfeited or are terminated for any other reason before being exercised or settled, then the shares underlying such Awards shall again become available for Awards under the Plan. Notwithstanding the foregoing, the following shares shall not become available for Awards under the Plan: (i) shares tendered by an Optionee or withheld by the Company for payment of an option price, (ii) shares tendered by a Holder or withheld by the Company to satisfy the Company’s tax withholding obligation in connection with an Award, (iii) shares reacquired in the open market or |
www.halliburton.com | | HALLIBURTON | 2020Proxy Statement | A-4 |
| otherwise using cash proceeds from the exercise of Options, and (iv) shares that are not issued to a Holder due to a net settlement of an Award. For purposes of clarity, Stock Appreciation Rights and Options shall be counted in full against the number of shares available for issuance under the Plan, regardless of the number of shares issued upon settlement of the Stock Appreciation Rights and Options. 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 XIII with respect to shares of Common Stock subject to Options then outstanding. The 1,000,000-share limit on Holders who are employees with respect to Stock Options and Stock Appreciation Rights Awards, singly or in combination, together with shares or share equivalents under Performance Awards granted to any Holder who is an employee in any calendar year shall be subject to adjustment in the same manner as provided in Article XIII. 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. | (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 reacquired by the Company. |
Only employees of the Company or any Parent Corporation or Subsidiary of the Company and non-management Directors shall be eligible for Awards under the Plan as determined by the Committee in its sole discretion. Each Award shall be evidenced in such manner and form as may be prescribed by the Committee. (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. | (b) | Restriction Period To Be Established by the Committee. The Committee shall establish the Restriction Period applicable to an Option; provided, however, that such Restriction Period shall not be less than the Minimum Criteria. Notwithstanding the foregoing, Awards of Options may utilize the Minimum Criteria Exception. | (c) | Option Period. The term of each Option shall be as specified by the Committee at the date of grant; provided that, in no case, shall the term of an Option exceed ten (10) years. | (d) | 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. | (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, 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. | (g) | Repricing Prohibited. Except for adjustments pursuant to Article XIII, the purchase price of Common Stock for any outstanding Option granted under the Plan may not be decreased after the date of grant nor may an outstanding Option granted under the Plan be surrendered to the Company as consideration for the grant of a new Option with a lower purchase price, cash or a new Award unless there is prior approval by the Company stockholders. Any other action that is deemed to be a repricing under any applicable rule of the New York Stock Exchange shall be prohibited unless there is prior approval by the Company stockholders. |
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 as determined by the Committee in its sole discretion. |
| HALLIBURTON | 2020Proxy Statement | A-5 |
(b) | Restriction Period To Be Established by the Committee. The Committee shall establish the Restriction Period applicable to a Stock Appreciation Right; provided, however, that such Restriction Period shall not be less than the Minimum Criteria. Notwithstanding the foregoing, Awards of Stock Appreciation Rights may utilize the Minimum Criteria Exception. | (c) | 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. | (d) | Exercise Period. The term of each Stock Appreciation Right shall be as specified by the Committee at the date of grant; provided that, in no case, shall the term of a Stock Appreciation Right exceed ten (10) years. | (e) | 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. | (f) | Repricing Prohibited. Except for adjustments pursuant to Article XIII, the exercise price of a Stock Appreciation Right may not be decreased after the date of grant nor may an outstanding Stock Appreciation Right granted under the Plan be surrendered to the Company as consideration for the grant of a new Stock Appreciation Right with a lower exercise price, cash or a new Award unless there is prior approval by the Company stockholders. Any other action that is deemed to be a repricing under any applicable rule of the New York Stock Exchange shall be prohibited unless there is prior approval by the Company stockholders. |
IX. | Restricted Stock Awards |
(a) | Restriction Period To Be Established by the Committee. The Committee shall establish the Restriction Period applicable to Restricted Stock Awards; provided, however, that such Restriction Period shall not be less than the Minimum Criteria. Notwithstanding the foregoing, Restricted Stock Awards may utilize the Minimum Criteria Exception. | (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. The Committee may, in its sole discretion, prescribe additional terms, conditions or restrictions relating to Restricted Stock Awards as shall be set forth in a Restricted Stock Award Agreement. | (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. |
X. | Restricted Stock Unit Awards |
(a) | Restriction Period To Be Established by the Committee. The Committee shall establish the Restriction Period applicable to Restricted Stock Unit Awards; provided, however, that such Restriction Period shall not be less than the Minimum Criteria. Notwithstanding the foregoing, Restricted Stock Unit Awards may utilize the Minimum Criteria Exception. | (b) | Other Terms and Conditions. The Committee may, in its sole discretion, prescribe additional terms, conditions or restrictions relating to the Restricted Stock Unit Award as shall be set forth in a Restricted Stock Unit Award Agreement. Cash dividend equivalents may be converted into additional Restricted Stock Units or may be paid during, or may be accumulated and paid at the end of, the Restriction Period with respect to a Restricted Stock Unit Award, as determined by the Committee. The Committee, in its sole discretion, may provide for the deferral of a Restricted Stock Unit Award. | (c) | Payment for Restricted Stock Unit. A Holder shall not be required to make any payment for Common Stock received pursuant to a Restricted Stock Unit 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) | Restricted Stock Units in Substitution for Units Granted by Other Corporations. Restricted Stock Unit Awards may be granted under the Plan from time to time in substitution for restricted stock units held by employees of corporations who become, or who became prior to the effective date of the Plan, 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 |
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| 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. |
(a) | Performance Period. The Committee shall establish, with respect to and at the time of each Performance Award, a performance period over which the performance applicable to the Performance Award of the Holder shall be measured and a Restriction Period; provided, however, that such Restriction Period shall not be less than the Minimum Criteria. Notwithstanding the foregoing, Performance Awards may utilize the Minimum Criteria Exception. | (b) | Performance Awards. Each Performance Award may have a maximum value established by the Committee at the time of such Award. | (c) | Performance Measures. A Performance Award granted under the Plan shall be awarded contingent, in whole or in part, upon the achievement of one or more performance measures. The performance criteria for Performance Awards shall consist of objective tests based on the following: earnings, cash flow, return on capital, cash value added performance, stockholder return and/or value, revenues, operating profits (including EBITDA), net profits, earnings per share, stock price, cost reduction goals, debt to capital ratio, financial return ratios, profit return and margins, market share, working capital, net operating profit after taxes, asset turns, customer satisfaction and any other criteria as determined by the Committee. The Committee may select one criterion or multiple criteria for measuring performance. Performance criteria may be measured on corporate, subsidiary or business unit performance, or on a combination thereof. Further, the performance criteria may be based on comparative performance with other companies or other external measure of the selected performance criteria. | (d) | Payment. Following the end of the performance period, the Holder of a Performance Award shall be entitled to receive payment of an amount, not exceeding the maximum value of the Performance 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 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. | (e) | Termination of Service. The Committee shall determine the effect of termination of service during the performance period on a Holder’s Performance Award. |
XII. | 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 is subject to a Restriction Period 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 the Restriction Period applicable to Stock Value Equivalent Awards; provided, however, that such Restriction Period shall not be less than the Minimum Criteria. Notwithstanding the foregoing, Stock Value Equivalent Awards may utilize the Minimum Criteria Exception. | (c) | 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 vesting period with respect to a Stock Value Equivalent Award, as determined by the Committee. | (d) | Termination of Service. The Committee shall determine the effect of termination of service during the applicable vesting period on a Holder’s Stock Value Equivalent Award. |
XIII. | Recapitalization or Reorganization |
(a) | Except as hereinafter otherwise provided, in the event of any recapitalization, reorganization, merger, consolidation, combination, exchange, stock dividend, stock split, extraordinary dividend or divestiture (including a spin-off) or any other change in the corporate structure or shares of Common Stock occurring after the date of the grant of an Award, the Committee shall, in its discretion, make such adjustment as to the number and price of shares of Common Stock or other consideration subject to such Awards as the Committee shall deem appropriate in order to prevent dilution or enlargement of rights of the Holders. | (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. |
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(c) | The shares with respect to which Options, Stock Appreciation Rights or Restricted Stock Units may be granted are shares of Common Stock as presently constituted, but if, and whenever, prior to the expiration of an Option, Stock Appreciation Rights or Restricted Stock Unit Award, 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 Award relates or may thereafter be exercised (i) in the event of an increase in the number of outstanding shares shall be proportionately increased, and, as applicable, 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, as applicable, 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 or Stock Appreciation Right or payment in settlement of a Restricted Stock Unit Award theretofore granted, the Holder shall be entitled to purchase or receive, as applicable, under such Award, in lieu of the number of shares of Common Stock as to which such Award relates or shall then be exercisable, the number and class of shares of stock and securities and the cash and other property to which the Holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to such recapitalization, the Holder had been the holder of record of the number of shares of Common Stock then covered by such Award. | (e) | Notwithstanding any provisions of the Plan to the contrary, in the event of an employee Holder’s Qualifying Termination, unless an Award Document otherwise provides, as of the date of such Holder’s termination of service (i) any outstanding Options and Stock Appreciation Rights shall become immediately vested and fully exercisable for the full term thereof, (ii) any restrictions on Restricted Stock Awards or Restricted Stock Unit Awards shall immediately lapse, (iii) all performance measures upon which an outstanding Performance Award is contingent shall be deemed achieved and the Holder shall receive a payment equal to the target amount of the Award he or she would have been entitled to receive, without proration, and (iv) any outstanding cash Awards including Stock Value Equivalent Awards shall immediately vest and be paid based on the vested value of the Award. | (f) | 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, contract(s)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 Awards 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. | (g) | Notwithstanding the foregoing, the provisions of this Article XIII shall be administered in accordance with Section 409A of the Code, and settlement of Awards under Section 13(e) will be delayed until the scheduled payment or vesting date to the extent required to comply with Section 409A of the Code or to avoid the taxes imposed thereunder. |
XIV. | 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 to effect a “material revision” of the Plan, where a “material revision” includes, but is not limited to, a revision that: (a) materially increases the benefits accruing to a Holder under the Plan, (b) materially increases the aggregate number of securities that may be issued under the Plan, (c) materially modifies the requirements as to eligibility for participation in the Plan, or (d) changes the types of awards available under the Plan. (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 or a non-management Director any right to be granted an Option, a Stock Appreciation Right, a right to a Restricted Stock Award, Restricted Stock Unit Award, Performance Award or Stock Value Equivalent Award or any other rights hereunder except as may be evidenced by an Award or by an Option or Stock Appreciation 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 to continuation of employment with the Company or any Executive Officer of the Company that provides in the aggregate for payments to the Director or immediate family member in excess of $120,000 per year; | | | | | | | j) | Serves or has an immediate family member who serves as an executive officer of any tax-exempt entity that has received the greater of 1% of such tax-exempt entity’s consolidated gross revenues or $120,000 from the Company in any of the three immediately preceding fiscal years;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) | No Rights to Serve as a Director Conferred. Nothing contained in the Plan or in any Award made hereunder shall confer upon any Director any right to continue their position as a Director of the Company. | (d) | Other Laws; Withholding. The Company shall not be obligated to issue any shares of Common Stock pursuant to any Award at any time, when the offering of the shares of Common Stock covered by such Award has not been registered under the U.S. Securities Act of 1933, as amended (the “Act”) or such other country, U.S. federal or state laws, rules or regulations as the Company deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from the registration. The Company intends |
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| | k) | Duringto use reasonable efforts to ensure that no such delay will occur. In the current calendar yearevent exemption from registration under the Act is available upon vesting of an Award, the Participant, if requested by the Company to do so, will execute and deliver to the Company in writing an agreement containing such provisions as the Company may require to assure compliance with applicable securities laws. By accepting an Award, the Participant agrees that the shares of Common Stock which the Participant may acquire upon vesting of an Award will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable U.S. federal, state or non-U.S. securities laws. Furthermore, the Participant also agrees (i) that the Company may refuse to register the transfer of the three immediately preceding calendar years, has had any other business relationship withshares of Common Stock acquired under an Award on the stock transfer records of the Company for whichif such proposed transfer would in the opinion of counsel to the Company has been requiredconstitute a violation of any applicable securities law, and (ii) that the Company may give related instructions to make disclosure under Item 404(a) of Regulation S-Kits transfer agent, if any, to stop registration of the Securities and Exchange Commission; provided, however, that this Section C.1.ktransfer of the shares of Common Stock acquired under the Plan. No fractional shares of Common Stock shall not apply if such relationship arosebe 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 Director’s statusshares) in satisfaction of the Company’s withholding obligation, subject to such restrictions as a past or current senior executive of a companythe Committee deems appropriate. | (e) | No Restriction on Corporate Action. Nothing contained in the oil and gas industry andPlan shall be construed to prevent the Company or any Subsidiary from taking any corporate action which is deemed by the Company or such Director satisfiesSubsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on the independence tests set forth above andPlan or any Award made under the Plan. No Holder, beneficiary or other then-current applicable regulatory standards for independence. | | | | |
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| 2. | All Directors complete independence questionnaires at least annually andperson shall have any claim against the Board makes determinations of the independence of its members. | | | | | 3. | For purposes of the foregoing Section C: | | | | | | a) | “affiliate” meansCompany or any individual or entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the Company; | | | | | | | b) | “Company” means Halliburton and includes any parent or subsidiary in a consolidated group with Halliburton; | | | | | | | c) | “Executive Officer” has the meaning given to “officer” in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended; and | | | | | | | d) | “immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than domestic employees) who shares such person’s home. For purposes of the look-back provision in Sections C.1.a, C.1.c, C.1.e and C.1.i above, “immediate family member” will not include individuals who are no longer immediate family membersSubsidiary as a result of legal separation or divorce, or those who have died or become incapacitated.any such action. | (f) | | | | D. | Management Directors: The Board believes that management Directors should number not more than two (2). While this number is not an absolute limitation, other thanRestrictions on Transfer. No Award may be sold, assigned, pledged, exchanged, hypothecated, encumbered, disposed of, or otherwise transferred, except by will or the Chief Executive Officer, who should at all times belaws of descent and distribution or pursuant to a member“qualified domestic relations order” as defined by the Code or Title I of the Board, management Directors should be limited onlyU.S. Employee Retirement Income Security Act of 1974, as amended, or similar order. Upon any attempt to those officers whose positionstransfer, assign, pledge, hypothecate or potential make it appropriate for themotherwise dispose of an Award or of such rights contrary to sitthe provisions of an Award Document or in the Plan, the Award and such rights shall immediately become null and void. The Committee may prescribe and include in the respective Award Documents hereunder other restrictions on transfer. Upon a Holder’s death, the Board. | | | E. | SizeHolder’s personal representative or other person entitled to succeed to the rights of the Board: The Board believes that, optimally,Holder (the “Successor Holder”) may exercise such rights as are provided under the Board should number between ten (10) and fourteen (14) members. Halliburton’s By-laws prescribe that the number of Directors will not be less than eight (8) nor more than twenty (20). | | | F. | Service of Former CEOs and Other Former Management on the Board: Management Directors shall retire from the Board at the time of their retirement as an employee unless continued service as a Director is requested and approved by the Board. | | | G. | Annual Election of All Directors: As provided in Halliburton’s By-laws, all Directors are elected annually by the majority of votes cast, unless the number of nominees exceeds the number of Directors to be elected, in which event the Directors shall be elected by a plurality vote. Should a Director’s principal title change during the year, he or sheapplicable Award Document. A Successor Holder must submit a letter of Board resignationfurnish proof satisfactory to the ChairmanCompany of his or her rights to exercise the NominatingAward under the Holder’s will or under the applicable laws of descent and Corporate Governance Committee who, withdistribution. Notwithstanding the fullforegoing, the Committee shall have the authority, in its discretion, to acceptgrant (or to sanction by way of amendment to an existing grant) Awards (other than Incentive Stock Options) which may be transferred by the Holder for no consideration to or reject the resignation. | | | H. | Process for the Selectionbenefit of New Directors: The Board is responsiblethe Holder’s Immediate Family, to a trust solely for filling Board vacancies that may occur between annual meetingsthe benefit of stockholders. The Board has delegatedthe Holder and his Immediate Family, or to a partnership or limited liability company in which the NominatingHolder and Corporate Governance Committeemembers of his Immediate Family have at least 99% of the dutyequity, profit and loss interest, in which case the Award Document shall so state. A transfer of selecting and recommending prospective nominees to the Board for approval. The Nominating and Corporate Governance Committee considers suggestions of candidates for Board membership made by current Committee and Board members, Halliburton management, and stockholders. The Committee may retain an independent executive search firm to identify candidates for consideration. A stockholder who wishes to recommend a prospective candidate should notify Halliburton’s Corporate Secretary, as described in Halliburton’s annual proxy statement. The Nominating and Corporate Governance Committee also considers whether to nominate persons put forward by stockholdersAward pursuant to Halliburton’s By-laws relatingthis Paragraph (f) shall be subject to stockholder nominations. For each individual nominated in accordance with Halliburton’s By-laws by a stockholder owning at least 1% of the issuedsuch rules and outstanding voting stock of Halliburton, the Corporate Secretary will (i) obtain from such nominee any additional relevant information the nominee wishes to provide in consideration of his or her nomination, (ii) report on each such nominee to the Nominating and Corporate Governance Committee and (iii) facilitate having each such nominee meet with the Nominating and Corporate Governance Committeeprocedures as the Committee deems appropriate. | | | | When itmay establish. In the event an Award is necessarytransferred as contemplated in this Paragraph (f), such Award may not be subsequently transferred by the transferee except by will or the laws of descent and distribution, and such Award shall continue to add a Directorbe governed by and subject to the Board,terms and limitations of the NominatingPlan and Corporate Governance Committee, in consultation with the Board, determinesrelevant written instrument for the specific criteria for a new Director candidate. AfterAward and the Nominatingtransferee shall be entitled to the same rights as the Holder under Articles XIII and Corporate Governance Committee identifies a prospective candidate, the Committee determines the appropriate method to evaluate the candidate. This determinationXIV hereof as if no transfer had taken place. No transfer shall be effective unless and until written notice of such transfer is based on the information provided to the Committee, in the form and manner prescribed by the person recommending the prospective candidate and the Committee’s knowledgeCommittee. The consequences of the candidate. This information may be supplemented by inquiries to the person who made the recommendation or to others. The preliminary determination is based on the need for additional Board members to fill vacancies or to expand the sizetermination of the Board, and the likelihood that the candidate will meet the Board membership criteria listed in Section I below. The Committee will determine, after discussion with the Chairman of the Board and other Board members, whether a candidate shouldemployment shall continue to be considered as a potential nominee. If a candidate warrants additional consideration,applied with respect to the original Holder, following which the Awards shall be exercised by the transferee only to the extent and for the periods specified in the Plan and the related Award Document. The Option Agreement, Stock Appreciation Rights Agreement, Restricted Stock Award Agreement, Restricted Stock Unit Award Agreement or other Award Document shall specify the effect of the death of the Holder on the Award. | (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. | (h) | Foreign Awardees. Without amending the Plan, the Committee may request an independent executive search firmgrant Awards to gather additional information abouteligible persons who are foreign nationals on such terms and conditions different from those specified in the candidate’s background, experience and reputation, and to report its findings toPlan as may, in the Committee. The Committee then evaluates the candidate and determines whether to interview the candidate. One or more membersjudgment of the Committee, be necessary or desirable to foster and others as appropriate perform candidate interviews. Oncepromote achievement of the evaluationpurposes of the Plan and, interviews are completed,in furtherance of such purposes, the Committee recommends to the Board which candidates should be nominated. The Board makes a determination of nominees after review of the recommendationmay make such modifications, amendments, procedures, subplans and the Committee’s report. | | | I. | Board Membership Criteria: Directors and nominees should possess the following qualifications: | | | | 1. | Personal characteristics: | | | | | | a) | Highest personal and professional ethics, integrity and values; | | | | | | | b) | An inquiring and independent mind; and | | | | | | | c) | Practical wisdom and mature judgment. | | | | | | 2. | Broad training and experience at the policy-making level in business, government, educationlike as may be necessary or technology. | | | |
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| 3. | Expertise that is useful to Halliburton and complementary to the background and experience of other Board members, so that an optimum balance of members on the Board can be achieved and maintained. | | | | | 4. | Willingness to devote the required amount of time to carrying out the duties and responsibilities of Board membership. | | | | | 5. | Commitment to serve on the Board for several years to develop knowledge about Halliburton’s principal operations. | | | | | 6. | Willingness to represent the best interests of all Halliburton stockholders and objectively appraise management performance. | | | | | 7. | Involvement only in activities or interests that do not create a conflictcomply with the Director’s responsibilities to Halliburtonprovisions of laws and its stockholders. | | | | | The Board evaluates nominees annually for election and reelection, and on an as-needed basis to fill vacancies, to ensure they meet the above criteria. The findings of the reviews and self-assessments conductedregulations in accordance with Sections J and K below will be taken into consideration by the Nominating and Corporate Governance Committee and by the Board in connection with the decision as to who should be nominated for election and reelection. | | | J. | Annual Performance Review: The Nominating and Corporate Governance Committee will conduct annual performance reviews of each non-management Director. While the Nominating and Corporate Governance Committee will be responsible for determining how to evaluate director performance, each evaluation will include a review of the non-management Director’s: | | | | 1. | Attendance and participation; | | | | | 2. | Changes in independence; | | | | | 3. | Changes in qualifications, including expertise; | | | | | 4. | Changes in status relating to principal occupation; and | | | | | 5. | Other contributions to the Board and its committees. | | | | | The Nominating and Corporate Governance Committee will review each evaluation and, if appropriate, discuss the evaluation with the applicable non-management Director. | | | K. | Annual Review of Board Composition; Self-Assessment: The Nominating and Corporate Governance Committee will conduct an annual review of the overall composition profile of the Board to determine whether the then-current non-management Directors collectively represent an appropriate mix of experience and expertise. Oneother countries or more members of the Board shall have significant experience with an energy-focused company, with a manufacturing company in the chemical, energy or materials industry, or in matters relating to health, safety and the environment. In addition, the non-management Directors will conduct an annual self-assessment of the Board, including assessments of the following: | | | | 1. | General makeup and composition of the Board; | | | | | 2. | Sufficiency of materials and information provided to the Board; | | | | | 3. | Board meeting mechanics and structure; | | | | | 4. | Board responsibilities and accountability; and | | | | | 5. | Board meeting content and conduct. | | | | L. | Service on Other Public Company Boards: (1) The Chief Executive Officer will not serve on the boards of directors of more than a total of two publicly traded companies in addition to Halliburton, and (2) no other Director will serve on the boards of directors of more than three publicly traded companies in addition to Halliburton, provided, however, that any such other Director may serve on boards of directors of additional companies if that Director served on such boards of directors at the time of the Director’s election to Halliburton’s Board and that Director undertakes not to stand for reelection or appointment to the boards of directors of those additional companies. In evaluating prospective nominees for the Board and the continued service of current Directors, the Nominating and Corporate Governance Committee will take into consideration the individual’s membership on the boards of directors of other companies in order to ensure that such individual’s service on such other boards of directors does not impair the individual’s ability to devote sufficient time and commitment to serve effectively as a Halliburton Director. | | | M. | Diversity: The Nominating and Corporate Governance Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the needs of the Board at a given point in time and shall periodically review and update the criteria as deemed necessary. Personal experience and background, race, gender, age and nationality are reviewed for the Board as a whole, and diversity in these factors may be taken into account in considering individual candidates. | | | N. | Director Tenure: The Nominating and Corporate Governance Committee, in consultation with the Chief Executive Officer, will perform an annual review of each Director’s continuation on the Board in making its recommendation to the Board concerning his or her nomination for election or reelection as a Director. As a condition to being nominated by the Board for continued service as a Director, each incumbent Director nominee shall sign and deliver to the Board irrevocable letters of resignation, in forms satisfactory to the Board. The first resignation letter is limited to and conditioned on that Director failing to achieve a majority of the votes cast at an election where Directors are elected by majority vote. For any Director nominee who fails to be elected by a majority of votes cast, where Directors are elected by majority vote, his or her irrevocable letter of resignation will be deemed tendered on the date the election results are certified. Such resignation shall only be effective upon acceptance by the Board. The second resignation letter is limited to and conditioned on the Director being found to have substantially participated in a significant violation of U.S. federal or state law or to have recklessly disregarded his or her duty to exercise reasonable oversight, as more fully described in Halliburton’s By-laws. Such resignation shall only be effective upon acceptance by the disinterested members of the Board. Each non-incumbent Director nominee shall agree upon his or her election as a Director to sign and deliver to the Board such irrevocable letters of resignation. Further, the Board shall fill vacancies and new directorships only with candidates who agree to tender the letters of resignation as described above, promptly following their appointment as a Director. The Board’s expectation is that any Director whose resignation has been tendered as described in this section will abstain from participation in both the Nominating and Corporate Governance Committee’s consideration of the resignation, if they are a member of that committee, and | | |
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| the Board’s decision regarding the resignation. There are no term limits on Directors’ service, other than mandatory retirement. | | | O. | Director Compensation Review: It is appropriate for executive management of Halliburton, assisted by an independent compensation consultant, to report periodically to the Nominating and Corporate Governance Committee on the status of Halliburton’s Director compensation practices in relation to other companies of comparable size and Halliburton’s competitors. | | | P. | Form and Amount of Director Compensation: The Nominating and Corporate Governance Committee annually reviews the competitiveness of Halliburton’s Director compensation practices. In doing so, the Committee, with the assistance of an independent compensation consultant, compares Halliburton’s practices with those of its comparator group, which includes both peer and general industry companies. Specific components reviewed include cash compensation, equity compensation, benefits and perquisites. Information is gathered directly from published proxy statements of comparator group companies. Additionally, the Committee utilizes external market data gathered from a variety of survey sources to serve as a reference point against a broader group of companies. Determinations as to the form and amount of Director compensation are based on Halliburton’s competitive position resulting from this review. | | | Q. | Changes to Director Compensation: Changes in Director compensation, if any, should come upon the recommendation of the Nominating and Corporate Governance Committee, but with full discussion and concurrence by the Board. | | | R. | Annual Meeting Attendance: It is the policy of the Board that all Directors attend the Annual Meeting of Stockholders, and Halliburton’s annual proxy statement shall state the number of Directors who attended the prior year’s Annual Meeting. | | | S. | Director Retirement: It is the policy of the Board that each non-management Director shall retire from the Board immediately prior to the annual meeting of stockholders following his or her seventy-second (72nd) birthday. Management Directors shall retire at the time of their retirement from employment with Halliburton unless the Board approves continued service as a Director. |
Operation of the Board Meetings
A. | Executive Sessions: During each regular Board meeting, the non-management Directors meet in scheduled executive sessions presided over by the Lead Director. During any year, if there exists a non-management Director who is not independent, the independent Directors will meet in at least one executive session presided over by the Lead Director. | | | B. | Frequency of Board Meetings: The Board has five regularly scheduled meetings per year. Special meetings are called as necessary. It is the responsibility of the Directors to attend the meetings. | | | C. | Attendance of Non-Directors at Board Meetings: The Chief Financial Officer and the General Counsel will be present during Board meetings, except where there is a specific reason for one or both of them to be excluded. In addition, the Chairman of the Board may invite one or more members of management to be in regular attendance at Board meetings and may include other officers and employees from time to time as appropriate to the circumstances. | | | D. | Board Access to Management: Directors have open access to Halliburton’s management. In addition, members of Halliburton’s executive management routinely attend Board and Committee meetings and they and other managers frequently brief the Board and the Committees on particular topics. The Board encourages executive management to bring managers into Board or Committee meetings and other scheduled events who (i) can provide additional insight into matters being considered or (ii) represent managers with future potential whom executive management believe should be given exposure to the members of the Board. | | | E. | Board Access to Independent Advisors: The Board has the authority to retain, set terms of engagement, and dismiss such independent advisors, including legal counsel or other experts, as it deems appropriate, and to approve the fees and expenses of such advisors. | | | F. | Conflicts of Interest: If an actual or potential conflict of interest develops because of significant dealings or competition between Halliburton and a business with which the Director is affiliated, the Director should report the matter immediately to the Chairman of the Board for evaluation by the Board. In the case of a significant conflict, the conflict must be resolved or the Director should resign. If a Director has a personal interest in a matter before the Board, the Director shall disclose the interest to the full Board and excuse him or herself from participation in the discussion and shall not vote on the matter. | | | G. | Strategic and Business Planning: Strategic and business plans will be reviewed annually at one of the Board’s regularly scheduled meetings. | | | H. | Agenda Items for Board Meetings: The Chairman of the Board and Chief Executive Officer prepares a draft agenda for each Board meeting and the agenda and meeting schedule are submitted to the Lead Director for approval. The other Board members may suggest items for inclusion on the agenda, and each Director may also raise, at any Board meeting, subjects that are not on the agenda. | | | I. | Board/Committee Forward Calendars: A forward calendar of matters requiring recurring and focused attention by the Board and each Committee will be prepared and distributed prior to the beginning of each calendar year in order to ensure that all required actions are taken in a timely manner and are given adequate consideration. The Board or Committee shall annually review the recurring events calendars and may change or revise them as deemed appropriate. | | | J. | Advance Review of Meeting Materials: In advance of each Board or Committee meeting, a proposed agenda will be distributed to each Director. In addition, to the extent feasible or appropriate, information and data important to the Directors’ understanding of the matters to be considered, including background summaries and presentations to be made at the meeting, will be distributed in advance of the meeting. The Lead Director advises management on and approves information distributed to the Directors. Directors also routinely receive monthly financial statements, earnings reports, press releases, analyst reports and other information designed to keep them informed of the material aspects of Halliburton’s business, performance and prospects. It is each Director’s responsibility to review the meeting materials and other information provided by Halliburton. | | |
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Committees of the Board
A. | Number and Types of Committees: A substantial portion of the analysis and work of the Board is done by standing Board Committees. A Director is expected to participate actively in the meetings of each Committee to which he or she is appointed. | | | B. | Standing Committees: The Board has established the following standing Committees: Audit, Compensation, Health, Safety and Environment, and Nominating and Corporate Governance. Each Committee’s charter is to be reviewed annually by the Committee and the Board. | | | C. | Composition of Committees: It is the policy of the Board that only non-management Directors serve on Board Committees. Further, only independent Directors serve on the Audit, the Compensation, the Nominating and Corporate Governance and the Health, Safety and Environment Committees, provided that the Directors may appoint one non-independent Director as a member (but not as the Chairman) of the Health, Safety and Environment Committee as they deem appropriate. | | | D. | Interlocking Directorates: A Director who is or has been within the preceding three years part of an interlocking directorate (i.e., onejurisdictions in which the Chief Executive OfficerCompany or another Halliburton officer serves on the compensation committee of another entity that employs the Director, or an immediate family member of the Director) may not serve on the Compensation Committee. The composition of the Board Committees will be reviewed annually to ensure that each of its members meet the criteria set forth in applicable SEC, NYSE, and IRS rules and regulations.Subsidiaries operate. | (i) | | E. | Committee Rotation: The Nominating and Corporate Governance Committee,Clawback or Recoupment. Notwithstanding any other provisions in consultation with the Chief Executive Officer, recommends annuallythis Plan, any Award shall be subject to the Board the membership of the various Committees and their Chairmen, and the Board approves the Committee assignments. In making its recommendations to the Board, the Nominating and Corporate Governance Committee takes into consideration the need for continuity, subject matter expertise, applicable SEC, IRS,clawback, recovery or NYSE requirements, tenure and the desires of individual Board members. | | | F. | Frequency and Length of Committee Meetings: Each Committee shall meet as frequently and for such length of time as may be required to carry out its assigned duties and responsibilities. The schedule for regular meetings of the Board and Committees for each year is submitted and approvedrecoupment by the Board in advance. In addition, the Chairman of a Committee may call a special meeting atCompany under any time if deemed advisable. | | | G. | Committee Agendas/Reports to the Board: Members of management and staff will prepare draft agenda and related background information for each Committee meeting which, to the extent desiredclawback or recoupment policy adopted by the relevant Committee Chairman, will be reviewed and approved by the Committee Chairman in advance of distribution to the other members of the Committee. A forward calendar of recurring topics to be discussed during the year will be prepared for each Committee and furnished to all Directors. Each Committee member is free to suggest items for inclusion on the agenda and to raise at any Committee meeting subjects that are not on the agenda for that meeting. | | | | Reports on each Committee meeting are made to the full Board. All Directors are furnished copies of each Committee’s minutes. |
Other Board Practices
A. | Non-Management Director Orientation and Continuing Education: An orientation program has been developed for new non-management Directors which includes: comprehensive information about Halliburton’s business and operations; general information about the Board and its Committees, including a summary of Director compensation and benefits; and a review of Director duties and responsibilities. Each non-management Director is required to annually attend at least six hours (or such greater number of hours as best practices suggest are appropriate) of external or internal director continuing education programs, conferences or similar presentations approved (whetherCompany, whether before or after the non-management Director’s participation) by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee and management shall identify and communicate external and internal training and educational opportunities for non-management Directors’ continuing education in areasdate of importance to Halliburton, including with respect to duties and responsibilities of directors of publicly traded companies, provided that at least two hours of continuing education shall be devoted to issues relating to health, safety and the environment. Halliburton will provide sufficient internal continuing education programs for the non-management Directors to meet this requirement. Attendance at any approved external program shall count for the requirement, but any associated expenses will be for the accountgrant of the individual non-management Director except with prior approval by the Audit Committee.Award. |
| | B. | Board Interaction with Institutional Investors and Other Stakeholders:HALLIBURTON | The Board believes that it is executive management’s responsibility to speak for Halliburton. Individual Board members may, from time to time, meet or otherwise communicate with outside constituencies that are involved with Halliburton. In those instances, however, it is expected that Directors will do so only with the knowledge of executive management and, absent unusual circumstances, only at the request of executive management. | | | C.2020Proxy Statement | Stockholder Communications with Directors:A-9 To foster better communication with Halliburton’s stockholders, Halliburton established a process for stockholders to communicate with the Audit Committee and the Board. The process has been approved by both the Audit Committee and the Board, and meets the requirements of the NYSE and the SEC. The methods of communication with the Board include mail (Board of Directors c/o Director of Business Conduct, Halliburton Company, P.O. Box 42806, Houston, Texas 77242), a dedicated telephone number (888-312-2692 or 770-613-6348) and an e-mail address (BoardofDirectors@halliburton.com). Information regarding these methods of communication is also on Halliburton’s website,www.halliburton.com,under “Corporate Governance.” Halliburton’s Director of Business Conduct, a Company employee, reviews all | | |
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| stockholder communications directed to the Audit Committee and the Board. The Chairman of the Audit Committee is promptly notified of any significant communication involving accounting, internal accounting controls, or auditing matters. The Lead Director is promptly notified of any other significant stockholder communications and communications addressed to a named Director are promptly sent to the Director. A report summarizing all communications is sent to each Director quarterly and copies of communications are available for review by any Director. | | | D. | Core Values: The Board is committed to promoting Halliburton’s core values. | | | E. | Periodic Review of these Guidelines: The operation of the Board is a dynamic and evolving process. Accordingly, the Nominating and Corporate Governance Committee will review these Guidelines periodically and any recommended revisions will be submitted to the full Board for consideration and approval. | | | | Approved as revised:
Halliburton Company
Board of Directors
December 4, 2014
Supersedes previous version dated January 1, 2013 | | |
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DIRECTIONS TO THE HALLIBURTON ANNUAL MEETING OF STOCKHOLDERSDirections to the HalliburtonAnnual Meeting of Shareholders
The Halliburton North Belt Facility is located on the North Sam Houston Parkway (Beltway 8 Tollway) south feeder between Aldine Westfield and JFK Boulevard. 3000 N. Sam Houston Parkway East Houston, Texas 77032 281-871-4000 From I-45 | From I-69 / US 59 and IAH | • Take the Sam Houston Parkway East • Exit JFK Blvd | • Take the Sam Houston Parkway West | • Exit JFK Blvd | • Exit Aldine Westfield | | • “U-Turn”“U-Turn” at Aldine Westfield and proceed east on the Sam Houston Parkway feeder |
The main entrance to the North Belt facility will be on your right, about halfway between Aldine Westfield and JFK Blvd.
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