SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Halliburton Company
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(Name of Registrant as Specified In Its Charter)
Halliburton Company
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Notes:
[LOGO OF HALLIBURTON COMPANY APPEARS HERE]
March 21, 1995
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Halliburton Company which will be held on Tuesday, May 16, 1995, at 9:00 a.m.
in the Parisian Room of the Fairmont Hotel, 1717 N. Akard, Dallas, Texas 75201.
At the meeting, as set forth in the accompanying Notice of Annual Meeting and
Proxy Statement, stockholders are being asked to elect a Board of Directors of
ten directors to serve for the coming year, to ratify the selection of Arthur
Andersen LLP as independent accountants to examine the financial statements and
books and records of the Company for 1995, and to act on a stockholder
proposal, if properly presented at the meeting.
It is very important that your shares are represented and voted at the
meeting. Accordingly, please sign, date and return the enclosed proxy card
promptly. If you attend the meeting, you may vote in person even if you have
previously mailed a proxy card. We would appreciate your informing us on the
proxy card if you expect to attend the meeting so that we can provide adequate
seating accommodations.
The continuing interest of our stockholders in the business of the Company is
appreciated and we hope many of you will be able to attend the Annual Meeting.
Sincerely,
[SIGNATURE OF THOMAS H. CRUIKSHANK
APPEARS HERE]
Thomas H. Cruikshank
Chairman of the Board
and Chief Executive Officer
[LOGO OF HALLIBURTON COMPANY APPEARS HERE]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1995
The Annual Meeting of Stockholders of HALLIBURTON COMPANY, a Delaware
corporation (the "Company"), will be held on Tuesday, May 16, 1995, at 9:00
a.m., in the Parisian Room of the Fairmont Hotel, 1717 N. Akard, Dallas, Texas
75201, to consider and act upon the matters discussed in the attached proxy
statement as follows:
1. To elect ten (10) Directors to serve for the ensuing year and until their
successors shall be elected and shall qualify.
2. To consider and act upon a proposal to ratify the appointment of Arthur
Andersen LLP as independent accountants to examine the financial
statements and books and records of the Company for the year 1995.
3. If properly presented, to consider and act on the stockholder proposal
set forth on pages 20 and 21 of the Proxy Statement, which is opposed by
the Board of Directors.
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors has fixed Monday, March 20, 1995, at the close of
business, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting and at any adjournment thereof. A Proxy
Statement is attached and incorporated herein by reference.
By order of the Board of Directors,
[SIGNATURE OF SUSAN S. KEITH APPEARS HERE]
Susan S. Keith
Vice President and Secretary
March 21, 1995
----------------
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING REGARDLESS OF
THE NUMBER OF SHARES WHICH YOU HOLD. TO AVOID UNNECESSARY EXPENSES AND DELAY,
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. A RETURN
ENVELOPE IS ENCLOSED WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
PROXY STATEMENT
GENERAL INFORMATION
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Halliburton Company (the "Company"). Execution of the proxy will
not in any way affect a stockholder's right to attend the Annual Meeting and
vote in person. Any stockholder giving a proxy has the power to revoke it at
any time before it is exercised by filing with the Secretary of the Company a
written revocation or duly executed proxy bearing a later date. The proxy will
be revoked if the stockholder is present at the Annual Meeting and elects to
vote in person.
The record date for determination of the stockholders entitled to vote at the
Annual Meeting is the close of business on March 20, 1995. The Company's Common
Stock, par value $2.50, is the only class of capital stock of the Company that
is outstanding. As of March 20, 1995, there were 114,201,317 shares of Common
Stock outstanding. Each of the outstanding shares of Common Stock is entitled
to one vote. A complete list of stockholders entitled to vote will be kept at
the Company's offices at the address specified on page 2 for ten days prior to
the Annual Meeting.
Shares will be voted in accordance with the stockholder's instructions in the
accompanying proxy on each matter submitted to stockholders. If no instructions
are given, the shares will be voted for the election of Directors, for
ratification of the selection of auditors and against the stockholder proposal.
Votes cast by proxy or in person at the Annual Meeting will be counted by the
persons appointed by the Company to act as election inspectors for the meeting.
In all matters other than the election of Directors, the affirmative vote of
the majority of shares present in person or represented by proxy at the meeting
and entitled to vote on the subject matter shall be the act of the
stockholders. Shares for which a holder has elected to abstain on a matter will
count for purposes of determining the presence of a quorum and for purposes of
determining the outcome of such matter.
The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held in street name which cannot be voted by a broker on certain
matters in the absence of instructions from the beneficial owner of the shares)
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum. However, for purposes of determining the outcome of any
matter as to which the broker has physically indicated on the proxy that it
does not have discretionary authority to vote, those shares will be treated as
not present and not entitled to vote with respect to that matter (even though
those shares may be entitled to vote on other matters).
In the election of Directors, shares present but not voting will be
disregarded (except for quorum purposes) and the candidates for election
receiving the highest number of affirmative votes of the shares entitled to be
voted for them, up to the number of Directors to be elected by those shares,
will be elected and votes withheld will have no legal effect.
In accordance with the Company's confidential voting policy, no vote of any
stockholder, whether by proxy or in person, will be disclosed to the officers,
Directors and employees of the Company, except (i) as necessary to meet
applicable legal requirements and to assert claims for and defend claims
against the Company, (ii) when disclosure is voluntarily made or requested by
the stockholder, (iii) where stockholders write comments on proxy cards or (iv)
in the event of a proxy solicitation not approved and recommended by the Board
of Directors. The proxy solicitor, the election inspectors and the tabulators
of all proxies, ballots and voting tabulations that identify stockholders are
independent and are not employees of the Company.
This Proxy Statement and form of proxy are being sent to stockholders on or
about April 3, 1995. The Company's Annual Report to Stockholders, including
financial statements, for the fiscal year ended December 31, 1994 accompanies
this Proxy Statement. Such Annual Report is not to be considered as a part of
the proxy solicitation material nor as having been incorporated herein by
reference.
The principal executive offices of the Company are located at 3600 Lincoln
Plaza, 500 N. Akard Street, Dallas, Texas 75201-3391.
ELECTION OF DIRECTORS
(ITEM 1)
Mr. Robert W. Campbell, who has served as a Director since 1989, is retiring
from the Board of Directors immediately prior to the Annual Meeting of
Stockholders on May 16, 1995, and will not be a candidate for election for the
ensuing year. Due to the retirement of Mr. Campbell from the Board of Directors
immediately prior to the Annual Meeting of Stockholders on May 16, 1995, the
number of Directors which constitutes the Board of Directors will be reduced
from eleven to ten, effective at 9:00 a.m. (Central Daylight Time) on May 16,
1995.
Ten Directors are to be elected to serve for the ensuing year and until their
successors are elected and qualify. All of the ten nominees hereinafter named
are presently Directors of the Company. It is intended that the Common Stock
represented by the proxies, in the absence of instructions to the contrary,
will be voted for the election as Directors of the ten nominees, or if any such
nominee shall be unwilling or unable to serve, favorable and uninstructed
proxies will be voted for a substitute nominee designated by the Board of
Directors, unless the Board of Directors, because of the unavailability of a
suitable substitute, reduces the number of Directors to be elected. Each
nominee has indicated approval of his or her nomination and his or her
willingness to serve if elected.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
ANNE L. ARMSTRONG, 67, Chairman of Board of Trustees, Center
[PHOTO for Strategic and International Studies, Washington, D.C.;
APPEARS former Chairman of the President's Foreign Intelligence Advisory
HERE] Board, 1981-1990; former Ambassador to Great Britain; joined
Halliburton Company Board in 1977; Chairman of the Environment,
Health and Safety Committee and member of the Management
Oversight and Nominating Committees; Director of American
Express Company, Boise Cascade Corporation, General Motors
Corporation and Glaxo p.l.c.
LORD CLITHEROE, 65, Chairman, The Yorkshire Bank, PLC; Deputy
[PHOTO Chief Executive, The RTZ Corporation PLC (an international group
APPEARS of mining and industrial companies), 1987-1989; Executive
HERE] Director, The RTZ Corporation PLC, 1968-1987; joined Halliburton
Company Board in 1987; Chairman of the Management Oversight
Committee and member of the Environment, Health and Safety and
Nominating Committees.
2
ROBERT L. CRANDALL, 59, Chairman, President and Chief
[PHOTO Executive Officer, AMR Corporation and Chairman and Chief
APPEARS Executive Officer, American Airlines, Inc. (engaged primarily in
HERE] the air transportation business) since 1985; President, American
Airlines, Inc., 1985-1995; joined Halliburton Company Board in
1986; Chairman of the Audit Committee and member of the
Compensation and Management Oversight Committees; Director of
AMR Corporation and American Airlines, Inc.
THOMAS H. CRUIKSHANK, 63, Chairman of the Board and Chief
[PHOTO Executive Officer of the Company; President and Chief Executive
APPEARS Officer of the Company, 1983-1989; joined Halliburton Company
HERE] Board in 1977; Director of Goodyear Tire and Rubber Company and
The Williams Companies, Inc.
WILLIAM R. HOWELL, 59, Chairman of the Board, J.C. Penney
[PHOTO Company, Inc. (a major retailer); Chairman of the Board and
APPEARS Chief Executive Officer, J.C. Penney Company, Inc., 1983-1994;
HERE] joined Halliburton Company Board in 1991; Chairman of the
Compensation Committee and member of the Management Oversight
and Audit Committees; Director of J.C. Penney Company, Inc.,
Exxon Corporation, Warner-Lambert Company, Bankers Trust Company
and Bankers Trust New York Corporation.
DALE P. JONES, 58, President of the Company; Executive Vice
[PHOTO President -- Oil Field Services of the Company, 1987-1989;
APPEARS Senior Vice President of the Company, 1987; joined Halliburton
HERE] Company Board in 1988; Director of Keystone International, Inc.
C. J. SILAS, 62, Chairman of the Board and Chief Executive
[PHOTO Officer (retired), Phillips Petroleum Company (engaged in
APPEARS exploration and production of crude oil, natural gas and natural
HERE] gas liquids on a worldwide basis, the manufacture of plastics
and petrochemicals and other activities), 1985-1994; joined
Halliburton Company Board in 1993; member of the Compensation,
Audit and Management Oversight Committees; Director of Comsat
Corporation and Reader's Digest Association, Inc.
ROGER T. STAUBACH, 53, Chairman and Chief Executive Officer,
[PHOTO The Staubach Company (a diversified real estate company);
APPEARS Chairman, Chief Executive Officer and President, The Staubach
HERE] Company, 1983-1991; joined Halliburton Company Board in 1991;
member of the Compensation, Management Oversight and
Environment, Health and Safety Committees; Director of Gibson
Greetings, Inc., Life Partners Group, Inc., First USA, Inc.,
Brinker International, Inc. and Columbus Realty Trust.
3
RICHARD J. STEGEMEIER, 66, Chairman of the Board, since 1989,
[PHOTO Unocal Corporation (an energy resources company); Chief
APPEARS Executive Officer of Unocal Corporation, 1988-1994; President,
HERE] Unocal Corporation, 1985-1992; joined Halliburton Company Board
in 1994; member of the Audit, Nominating and Management
Oversight Committees; Director of Unocal Corporation, First
Interstate Bancorp, Foundation Health Corporation, Northrop
Grumman Corporation, and Outboard Marine Corporation.
E. L. WILLIAMSON, 70, Chairman of the Board and Chief
[PHOTO Executive Officer (retired), The Louisiana Land and Exploration
APPEARS Company (engaged principally in the exploration, development and
HERE] production of natural resources), 1985-1988; joined Halliburton
Company Board in 1981; Vice Chairman of the Environment, Health
and Safety Committee and member of the Compensation and
Management Oversight Committees; Director of The Louisiana Land
and Exploration Company, Hibernia Corporation and Central
Louisiana Electric Company, Inc.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to persons or groups
who, to the Company's knowledge (based on information contained in Schedules
13G filed with the Securities and Exchange Commission with respect to
beneficial ownership at December 31, 1994), own or have the right to acquire
more than five percent of the Common Stock of the Company.
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------- ---------- -------
FMR Corp. ................................................ 14,681,495(1) 12.86%
82 Devonshire Street
Boston, MA 02109
--------
(1) The number of shares reported includes 11,996,286 shares beneficially owned
by Fidelity Management & Research Company, 2,544,609 shares owned by
Fidelity Management Trust Company and 140,600 shares held by Fidelity
International Limited. FMR Corp., through control of Fidelity Management &
Research Company and Fidelity Management Trust Company, has sole
dispositive power over the shares with the exception of those held
beneficially by Fidelity International Limited. FMR Corp. has sole power to
vote or to direct the vote of 1,846,509 shares of Common Stock.
4
The following table sets forth, as of March 20, 1995, the amount of Company
Common Stock owned beneficially by each Director and nominee for Director,
each of the executive officers named in the Summary Compensation Table on page
14 and all Directors, nominees for Director and executive officers as a group.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
--------------------------------
SHARED
SOLE VOTING VOTING OR
NAME OF BENEFICIAL OWNER OR AND INVEST- INVESTMENT PERCENT
NUMBER OF PERSONS IN GROUP MENT POWER POWER(1) OF CLASS
--------------------------- ----------- ---------- --------
Anne L. Armstrong.............................. 1,400 *
Alan A. Baker(3)(4)............................ 71,329 1,200(2) *
Robert W. Campbell............................. 900 *
Lord Clitheroe................................. 700 *
Robert L. Crandall............................. 900 *
Thomas H. Cruikshank(3)(4)..................... 175,000 *
William R. Howell.............................. 700 *
Dale P. Jones(3)(4)............................ 100,855 *
Tommy E. Knight(4)............................. 47,749 *
Ken R. LeSuer(4)............................... 51,804 1,886(2) *
W. Bernard Pieper(4)........................... 110,471 *
C. J. Silas.................................... 400 *
Roger T. Staubach.............................. 900 *
Richard J. Stegemeier.......................... 200 1,000(2) *
E. L. Williamson............................... 400 500(2) *
Shares owned by all current Directors, nominees
for Director and executive officers as a group
(17 persons)(4)............................... 618,696 4,586 *
--------
* Less than 1% of shares outstanding.
(1) Halliburton Company Employee Benefit Master Trust No. 3 (the "Trust"), a
trust established to hold the assets of the Halliburton Stock Fund for
certain of the Company's profit sharing, retirement and savings plans
("Plans"), held 1,908,986 shares of Company Common Stock at March 20,
1995. Messrs. Baker and Cruikshank and an executive officer not named in
the above table have beneficial interests in the Trust. Shares of Company
Common Stock held in the Trust are not allocated to any individual's
account and an aggregate of 7,469 shares which might be deemed to be
beneficially owned as of March 20, 1995 by Messrs. Baker, Cruikshank and
an unnamed executive officer are not included in the table above. Shares
owned by the Trust are voted by the Trustee, State Street Bank and Trust
Company, in accordance with voting instructions from the participants.
Under the terms of the Plans, a participant has the right, from time to
time, to determine whether up to 15% of his account is invested in the
Halliburton Stock Fund or in alternative investments permitted by the
Plans. The Trustee, however, determines when sales or purchases are to be
made by the Trust.
(2) 1,200 and 1,886 shares, respectively, are held in joint tenancy by Mr.
Baker and his wife and Mr. LeSuer and his wife. Such individuals share
voting and investment power with respect to their respective shares. Mr.
Stegemeier and his wife hold 1,000 shares as co-trustees of the Stegemeier
Family Trust and share voting and investment power with respect to such
shares. 500 shares are held in the name of WMSON COMPANY, L.L.C., a
limited liability company in which Mr. Williamson and his wife and other
family members own all of the outstanding interests. All of such
individuals share voting and investment power with respect to such shares.
(3) Not included in the table for Messrs. Cruikshank and Baker are 400 shares
and 16,207 shares, respectively, held by their wives and 3,566 shares
owned by Mr. Jones' daughter. Messrs. Cruikshank, Baker and Jones disclaim
any beneficial ownership in such shares of Common Stock.
(4) Included in the table are shares of Common Stock which may be purchased
pursuant to outstanding stock options within 60 days of the date hereof
for the following: Mr. Baker-25,832; Mr. Cruikshank-80,000; Mr. Jones-
45,000; Mr. Knight-25,832; Mr. LeSuer-18,498; Mr. Pieper-46,665 and two
unnamed executive officers-4,666 and 14,332, respectively. Until such time
as the options are exercised, the aforesaid individuals will neither have
voting nor investment power with respect to the underlying shares of
Common Stock but only have the right to acquire beneficial ownership
thereof through exercise of their respective options.
5
THE BOARD OF DIRECTORS
AND
STANDING COMMITTEES OF DIRECTORS
The Board of Directors of the Company has standing Audit, Compensation,
Nominating, Environment, Health and Safety and Management Oversight Committees.
During the last fiscal year, the Board of Directors met on 7 occasions, the
Compensation, Nominating and Audit Committees each met on 3 occasions, the
Environment, Health and Safety Committee met on 2 occasions, and the Management
Oversight Committee met on 5 occasions. No member of the Board attended fewer
than 75 percent of the aggregate number of meetings of the Board and the
Committees on which he or she served during the last fiscal year.
AUDIT COMMITTEE
The Audit Committee, among its functions, recommends to the Board of
Directors the appointment of independent auditors; reviews the scope of the
independent auditors' examination and the scope of activities of the internal
audit department; reviews the Company's financial policies and accounting
systems and controls; and approves and ratifies the duties and compensation of
the independent auditors, both with respect to audit and non-audit services.
The Committee also reviews the Company's compliance with its Code of Business
Conduct. The Committee meets separately from time to time with the independent
auditors and with members of the internal audit staff, outside the presence of
Company management or other employees, to discuss matters of concern, to
receive recommendations or suggestions for change and to exchange relevant
views and information.
COMPENSATION COMMITTEE
Duties of the Compensation Committee include developing and approving an
overall executive compensation philosophy consistent with corporate objectives
and stockholder interests; acting as a salary and promotion committee with
respect to officers of the Company and certain officers of subsidiaries and
divisions; establishing annual performance goals under the corporate short-term
incentive plan; administering and granting awards under the Company's 1993
Stock and Long-Term Incentive Plan and Senior Executives' Deferred Compensation
Plan; administering the Career Executive Incentive Stock Plan; acting as a
committee for administration of other forms of non-salary compensation; and
evaluating management development programs and activities.
NOMINATING COMMITTEE
The Nominating Committee develops and recommends to the Board of Directors
criteria relating to candidate selection; identifies candidates for Board
membership; establishes procedures whereby individuals may be recommended by
stockholders for consideration by the Committee as possible candidates for
election to the Board; proposes to the Board a slate of Director nominees for
election at the Annual Meeting of Stockholders and candidates to fill vacancies
on the Board; and recommends members to serve on the various Committees of the
Board.
The Nominating Committee will consider qualified nominees recommended by
stockholders who may submit recommendations to the Committee in care of the
Vice President and Secretary at the address of the Company set forth on page 2
of this Proxy Statement. Stockholder nominations must be submitted prior to
year end and must be accompanied by a description of the qualifications of the
proposed candidate and a written statement from the proposed candidate that he
or she is willing to be nominated and desirous of serving, if elected.
6
Nominations by stockholders may also be made at an annual meeting of
stockholders in the manner provided in the Company's bylaws. The bylaws provide
that a stockholder of the Company entitled to vote for the election of
Directors may make nominations of persons for election to the Board at a
meeting of stockholders by complying with required notice procedures. Such
nominations shall be made pursuant to written notice to the Secretary, which
must be received at the principal executive offices of the Company not less
than fifty (50) days nor more than seventy-five (75) days prior to the meeting.
The notice shall set forth (a) as to each person whom the stockholder proposes
to nominate for election or re-election as a Director, (i) the name, age,
business address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class and number of shares of
capital stock of the Company which are beneficially owned by the person, and
(iv) any other information relating to the person that is required to be
disclosed in solicitations for proxies for election of directors pursuant to
Rule 14a under the Securities Exchange Act of 1934, as amended; and (b) as to
the stockholder giving the notice, (i) the name and record address of the
stockholder and (ii) the class and number of shares of capital stock of the
Company which are beneficially owned by the stockholder. The Company may
require any proposed nominee to furnish such other information as may
reasonably be required by the Company to determine the eligibility of such
proposed nominee to serve as a Director of the Company. At any meeting of
stockholders, the presiding officer may disregard the purported nomination of
any person not made in compliance with the above-specified procedures.
ENVIRONMENT, HEALTH AND SAFETY COMMITTEE
The Environment, Health and Safety Committee has responsibility for reviewing
and assessing the Company's environmental, health and safety policies and
practices and proposing modifications or additions thereto as needed;
overseeing the communication and implementation of such policies throughout the
Company; reviewing annually the environmental, health and safety performance of
the Company's operating units and their compliance with applicable policies and
legal requirements; and identifying, analyzing and advising the Board on
environmental, health and safety trends and related emerging issues.
MANAGEMENT OVERSIGHT COMMITTEE
The Management Oversight Committee has responsibility for evaluating the
performance of the Chief Executive Officer of the Company; reviewing succession
plans for senior management of the Company and its major operating groups; and
reviewing other internal matters of broad corporate significance.
7
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Halliburton's primary mission is to enhance long-term shareholder value by
providing a broad spectrum of high quality services and related products within
the energy services, engineering and construction, and insurance industry
segments in which the Company operates. The Compensation Committee of Directors
(the "Committee") believes that the Company's total compensation package for
executives should be linked principally to increased shareholder value and to
measures which drive shareholder value.
The Committee has responsibility for overseeing the compensation program for
the members of the Executive Committee of the Company (composed of five
executive officers) and other senior officers of the Company, its subsidiaries,
and divisions. The Committee is comprised entirely of independent Directors,
none of whom is an employee or former employee of the Company. Moreover, none
of the members has an "interlocking" relationship with the board of directors
or compensation committee of any unaffiliated corporation.
OVERALL EXECUTIVE COMPENSATION PHILOSOPHY
The overriding objective of the total compensation package for senior
executives is to emphasize the enhancement of shareholder value. Beyond this,
the Committee's priorities are to establish and maintain competitive executive
compensation programs that enable the Company to attract, retain, and motivate
the high caliber executives required for the success of the business. In
determining what it deems to be appropriate types and amounts of compensation
for its executive officers, the Committee consults with outside compensation
consultants and reviews independent compensation data.
In the design and administration of executive compensation programs, the
Committee refers to, but does not necessarily target, current market levels at
the 50th percentile. In doing so, the Committee considers the compensation
practices of companies, adjusted for size, within the energy services and
engineering and construction industries, as well as practices of similarly
sized companies within general industry which, in the Committee's opinion,
provide the most comparable reference for the Company's executive positions
(the "Peer Groups").
In determining actual compensation levels, the Committee considers total
compensation, as well as each component of the compensation package. With
respect to total compensation, the compensation package is expected to produce
payments at or below market levels, given acceptable corporate performance, and
above market levels, given outstanding corporate performance.
RELATIONSHIP OF PAY TO PERFORMANCE
In 1994, the Company linked annual incentive awards to the achievement of
performance goals based on the Company's consolidated after-tax net income.
Long-term incentives, provided in the form of stock options and restricted
stock, are directly tied to the Company's stock price performance.
As a means of strengthening the link between total cash compensation and
Company performance, effective January 1, 1995, the existing Annual Incentive
Compensation Plan (the "Annual Incentive Plan") has been replaced with an
intermediate term rewards-oriented program based on "cash value added" ("CVA").
CVA measures the difference between after tax cash income and a capital charge
based upon the Company's weighted average cost of capital to determine the
amount of value, in terms of cash flow, added to the business. Because CVA has
been demonstrated to provide a close correlation to total shareholder return,
incentive awards will be tied more closely to the enhancement of shareholder
value.
8
To further relate the compensation earned under the new CVA program to
shareholder value creation and to focus executives' attention on a time frame
longer than one year, i.e., the intermediate term, only one-half of the bonus
earned for the year will be paid in cash. The remaining one-half of the bonus
will be denominated in shares of stock and will be paid in cash in installments
in each of the next two years.
The Committee believes its objectives can be optimally achieved by providing
a compensation package that consists of a cash base salary, a rewards-oriented
compensation program aligned with shareholder value creation, stock-based
awards, and benefits, including supplemental retirement benefits.
BASE SALARY
Salaries for the executive officers are reviewed annually by the Committee.
In making salary decisions, the Committee exercises discretion and judgment
based on the following factors: internal factors involving the executive's
level of responsibility, experience, individual performance, and equity issues
relating to pay for other Company executives, as well as external factors
involving competitive positioning, overall corporate performance, and general
economic conditions. No specific formula is applied to determine the weight of
each factor.
Mr. Cruikshank (Chairman of the Board and Chief Executive Officer) did not
receive a merit increase to base salary in 1994. The Committee based its
decision on the continued instability of the industry markets, the uncertainty
of the economic environment, and the ongoing restructuring and cost reduction
efforts within the Company. However, two of the executive officers named in the
Summary Compensation Table received adjustments in base salary in recognition
of their respective promotions.
ANNUAL INCENTIVE COMPENSATION
In 1994, the Annual Incentive Plan linked executive officers' annual
incentive compensation to the achievement of the Company's consolidated after-
tax net income goal. Members of the Executive Committee, Company officers, and
certain senior Company managers were eligible to participate in this Plan.
In general, the financial requirements for 1994 Company performance included
specific amounts of predetermined net income below which no incentive payment
could be earned and at which a maximum incentive payment could be earned. In
addition, the Company may award additional compensation based on extraordinary
individual performance.
In 1994, the consolidated net income target was achieved and accordingly,
incentive awards were earned by the executive officers, including Mr.
Cruikshank. The executive officer who headed the Halliburton Energy Services
Group received an additional discretionary award in recognition of his
extraordinary contributions to his business unit's improved performance.
STOCK-BASED COMPENSATION
The 1993 Stock and Long-Term Incentive Plan (the "1993 Plan") provides for a
variety of cash and stock-based vehicles (including stock options, stock
appreciation rights, and restricted stock, among others) from which the
Committee may, in its discretion, select in establishing individual long-term
incentive awards.
Stock options were the principal long-term incentive granted to executive
officers in 1994. Stock options granted in 1994 are exercisable at the fair
market value of the Common Stock on the date of grant and become
9
exercisable during employment over a three-year period (one-third per year).
Options, which have value only if the stock price appreciates following the
date of grant, provide an excellent means for linking executives' interests
directly to those of shareholders.
The Committee's determination of the number of option shares granted,
including the grant made to Mr. Cruikshank, was based primarily on a subjective
assessment of organizational role and internal job relationships, as well as a
reference to competitive practices in long-term incentive opportunities in the
Peer Group. An option for 90,000 shares was granted to Mr. Cruikshank in
February 1994.
The Committee also made limited use of grants of restricted stock to two
executive officers who received promotions in order to build their stock
ownership in the Company. In determining the appropriate restricted stock
award, the Committee considered the person's job level, performance, potential
for future contributions, and the timing and size of previous awards of
restricted stock and options. No particular weight was given to any individual
factor.
SENIOR EXECUTIVES' DEFERRED COMPENSATION PLAN
Under the terms of the Senior Executives' Deferred Compensation Plan (the
"SEDC Plan"), which is used for the purpose of providing supplemental
retirement benefits to senior executives, (i) mandatory additions to a
participant's account are made to offset contributions to which each was
entitled under the Company's qualified defined contribution plans in excess of
maximum contributions permitted under the Internal Revenue Code (commonly known
as ERISA Offset Benefits), (ii) mandatory additions equal to the amount of any
remuneration that is deferred to preserve deductibility under Section 162(m) of
the Internal Revenue Code are allocated to a participant's account in lieu of
the payment of such remuneration ("Mandatory Deferred Compensation"), and (iii)
discretionary additions, in such amounts as the Committee may determine, are
made to provide additional supplemental retirement benefits ("Supplemental
Retirement Benefit"). Interest on active and retired participants' Supplemental
Retirement Benefit accounts is accrued at the rate of five and ten percent per
annum, respectively, while interest on ERISA Offset Benefits and Mandatory
Deferred Compensation balances accrues at the rate of ten percent per annum. No
amounts may be received by a participant under the SEDC Plan prior to such
participant's termination.
In making Supplemental Retirement Benefit contributions under the SEDC Plan,
amounts are determined considering guidelines that include references to
retirement benefits provided from other programs, compensation, length of
service with the Company and as an officer, and years of service to normal
retirement. There is no specific weighting of these factors. In addition, in
determining the 1994 Supplemental Retirement Benefit contribution for Mr.
Cruikshank, the Committee considered a study by the outside compensation
consultant which included a comparison of Mr. Cruikshank's projected retirement
income benefits and total compensation to the Peer Group's chief executive
officers. In 1994, the Supplemental Retirement Benefit addition for Mr.
Cruikshank was $600,000.
POLICY WITH RESPECT TO $1 MILLION DEDUCTION LIMITATION
The Committee has considered the impact of the provisions of Section 162(m)
of the Internal Revenue Code that in certain circumstances disallow
compensation deductions in excess of $1 million for any year with respect to
the Company's Chief Executive Officer and its four most highly compensated
officers. It is the Committee's objective to maximize deductibility under
Section 162(m) with minimal sacrifices in flexibility and corporate objectives.
10
Accordingly, with respect to compensation payable to an applicable executive
officer which would otherwise be disallowable, it is the Committee's policy
that, to the extent feasible, such amounts be deferred until the limitation on
deductibility no longer applies with respect to such person.
Respectfully submitted,
THE COMPENSATION COMMITTEE OF DIRECTORS
Robert L. Crandall
W. R. Howell
C. J. Silas
Roger T. Staubach
E. L. Williamson
11
COMPARISON OF FIVE YEAR AND THREE YEAR CUMULATIVE TOTAL RETURN
Charts I and II below compare the Company's cumulative total stockholder
return on its Common Stock for the five-year period and the three-year period
ended December 31, 1994, with the Standard & Poor's 500 Stock Index ("S&P 500")
and the Standard & Poor's Energy Composite Index ("S&P Energy Composite").
These comparisons assume the investment of $100 on December 31, 1989 and
December 31, 1991, respectively, and the reinvestment of dividends. Chart I,
covering a five-year period, is required by regulations of the Securities and
Exchange Commission while Chart II is provided to give the stockholder an added
perspective on total stockholder return over a three-year period. The
stockholder returns set forth on the charts below are not necessarily
indicative of future performance.
CHART I
Total Stockholders' Return - Five Years
Assumes Investment of $100 on December 31, 1989 and Reinvestment of Dividends
12-31-89 12-31-90 12-31-91 12-31-92 12-31-93 12-31-94
-------- -------- -------- -------- -------- --------
HALLIBURTON COMPANY.......... $100 $109.01 $ 69.79 $ 72.80 $ 82.93 $ 88.96
S&P 500...................... $100 $ 96.90 $126.42 $136.05 $149.76 $151.74
S&P ENERGY COMPOSITE......... $100 $103.15 $110.92 $113.18 $130.98 $136.00
12
During the last three years, the Company has taken a number of strategic
actions to improve its performance. Key elements include, but are not limited
to, the acquisition and sale of certain businesses to enable the Company to
concentrate its efforts on core business activities, the operational and
organizational restructuring of its energy services business, downsizing of
facilities and numbers of employees to meet and respond to decreased market
demand in the energy services industry and company-wide intensive efforts to
reduce costs. While significant charges to earnings were incurred in
furtherance of certain of such actions, management believes that these
initiatives have been and are appropriate. During much of the three-year
period, as is indicated in Chart II, total stockholders' return for the
Company's stockholders exceeded both the S&P 500 and S&P Energy Composite
indices.
CHART II
Total Stockholders' Return - Three Years
Assumes Investment of $100 on December 31, 1991 and Reinvestment of Dividends
12-31-91 12-31-92 12-31-93 12-31-94
-------- -------- -------- --------
HALLIBURTON COMPANY....................... $100 $104.31 $118.83 $127.47
S&P 500................................... $100 $107.62 $118.46 $120.03
S&P ENERGY COMPOSITE...................... $100 $102.04 $118.09 $122.61
13
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------- -----------------------------
AWARDS PAYOUTS
--------------------- -------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTION PAYOUTS COMPENSATION
POSITION YEAR ($) ($)(1) ($)(2) ($)(3) (#) ($)(4) ($)(5)
------------------ ---- -------- --------- ------------ ---------- ---------- ------- ------------
Thomas H. Cruikshank.... 1994 $800,000 $ 400,000 $ 0 90,000 N/A $648,343
Chairman of the Board
and 1993 $800,000 $ 0 -- $ 0 75,000 N/A $507,867
Chief Executive Officer
of 1992 $800,000 $ 0 -- $ 0 N/A N/A $404,598
the Company
W. Bernard Pieper....... 1994 $557,500 $ 285,000 -- $463,125 50,000 N/A $ 58,642
Vice Chairman and Chief 1993 $495,000 $ 0 -- $ 0 45,000 N/A $124,131
Operating Officer of 1992 $487,596 $ 0 -- $547,500 N/A N/A $254,503
the Company
Dale P. Jones........... 1994 $500,000 $ 250,000 -- $ 0 45,000 N/A $112,338
President of the
Company 1993 $500,000 $ 0 -- $ 0 45,000 N/A $173,695
1992 $500,000 $ 0 -- $547,500 N/A N/A $228,726
Alan A. Baker(6)........ 1994 $435,000 $ 217,500 -- $ 0 27,500 N/A $ 90,134
Chairman, Halliburton
Energy 1993 $435,000 $ 0 -- $ 0 25,000 N/A $254,994
Services 1992 $435,000 $ 0 -- $547,500 N/A N/A $225,116
Tommy E. Knight......... 1994 $415,000 $ 207,500 -- $ 0 27,500 N/A $ 60,664
President and Chief
Executive 1993 $395,962 $ 0 -- $ 0 25,000 N/A $128,280
Officer of Brown &
Root, Inc. 1992 $323,558 $ 95,833 -- $177,750 N/A N/A $127,501
Ken R. LeSuer(6)........ 1994 $385,837 $ 250,000 -- $308,750 27,500 N/A $162,271
President and Chief
Executive 1993 $303,333 $ 58,125 -- $228,750 14,000 N/A 119,486
Officer, Halliburton 1992 N/A N/A -- N/A N/A N/A N/A
Energy Services
--------
(1) The Halliburton Annual Incentive Plan is designed to compensate members of
the Executive Committee, Company officers and other designated management
employees based on the achievement of predetermined performance goals set
annually by the Compensation Committee. Similar annual incentive programs
are in effect at Brown & Root and Halliburton Energy Services. Messrs.
Cruikshank, Jones, Pieper and Baker participated in the Halliburton Annual
Incentive Plan in 1992, 1993 and 1994. Since performance goals were not
achieved in 1992 and 1993, no amounts were paid to any of such individuals
in such plan years; however, performance goals were achieved in 1994 and
payments to each of such individuals, in the amounts set forth in the
Table, were made for such plan year. Mr. Knight participated in the Brown &
Root annual incentive program in 1992 and received the amount set forth in
the Table since performance goals were achieved by Brown & Root in such
year. In 1993 and 1994 he participated in the Halliburton Annual Incentive
Plan. Nothing was paid to Mr. Knight under such Plan for 1993 as
performance goals were not achieved in 1993; however, he received the
amount indicated in the Table for the 1994 Plan year, since performance
goals were realized in such year. In 1993 Mr. LeSuer participated in the
Halliburton Energy Services annual incentive program and, as a result of
performance goals having been attained, was paid $35,375. He also received
a leadership bonus in the amount of $22,750. In 1994 Mr. LeSuer
participated in the Halliburton Annual Incentive Plan and, as noted above,
due to the fact that performance goals were achieved, he was paid $200,000
under such Plan for the 1994 Plan year. Additionally, Mr. LeSuer received a
discretionary bonus for 1994 in the amount of $50,000.
(2) The dollar value of perquisites and other personal benefits for each of the
named executive officers was less than established reporting thresholds.
14
(3) In 1992 Mr. Jones and Mr. Knight were awarded 20,000 and 6,000 restricted
shares, respectively, on which restrictions lapse over a 10 year period; in
the same year, Mr. Pieper and Mr. Baker were awarded 20,000 restricted
shares each, which restrictions lapse in equal annual installments over
periods of 5 and 4 years, respectively, to correspond with their normal
retirement dates. In 1993 Mr. LeSuer was awarded 7,500 shares of restricted
stock on which restrictions lapse over a 5 year period. In 1994 Mr. Pieper
and Mr. LeSuer were awarded 15,000 and 10,000 shares, respectively.
Restrictions lapse on Mr. Pieper's shares over a 3 year period while
restrictions on Mr. LeSuer's shares lapse over 5 years. The total number
and value of restricted shares held by each of the above individuals as of
December 31, 1994 were as follows:
TOTAL AGGREGATE
RESTRICTED MARKET
NAME SHARES VALUE
---- ---------- ----------
Mr. Cruikshank.................................... 15,000 $ 496,875
Mr. Pieper........................................ 36,600 1,212,375
Mr. Jones......................................... 37,400 1,238,875
Mr. Baker......................................... 28,750 952,344
Mr. Knight........................................ 11,836 392,068
Mr. LeSuer........................................ 20,650 684,031
Dividends are paid on the restricted shares.
(4) Although the 1993 Plan was approved in 1993, no long-term incentive program
under the Plan was implemented in either 1993 or 1994. No other plans exist
under which such payments may be made.
(5) "All Other Compensation" includes the following accruals for or
contributions to various plans for the fiscal year ending December 31,
1994: (i) profit sharing plan contributions or termination surplus accruals
for Mr. Cruikshank--$9,017, Mr. Pieper--$9,017, Mr. Jones--$9,017, Mr.
Baker--$9,017, Mr. Knight--$16,478, and Mr. LeSuer--$9,017; (ii)
supplemental retirement plan contributions for Mr. Cruikshank--$600,000,
Mr. Pieper--$25,000, Mr. Jones--$80,000, Mr. Baker--$60,000, Mr. Knight--
$15,000 and Mr. LeSuer--$135,000; (iii) 401(k) plan matching contributions
for Mr. Jones--$2,250, Mr. Baker--$2,250 and Mr. LeSuer--$2,250; (iv) ERISA
offset benefit accruals for Mr. Cruikshank--$39,074, Mr. Pieper--$24,496,
Mr. Jones--$21,040, Mr. Baker--$17,132, Mr. Knight--$29,112 and Mr.
LeSuer--$14,177, and (v) above-market earnings on ERISA offset benefit
accounts for Mr. Cruikshank--$252, Mr. Pieper--$129, Mr. Jones--$31, Mr.
Baker--$18, Mr. Knight--$74 and Mr. LeSuer--$1. Company contributions to
split dollar life insurance premiums for Mr. Baker and Mr. LeSuer were,
respectively, $1,717 and $1,826.
(6) Mr. LeSuer became an executive officer of the Company on September 16,
1993. Mr. Baker ceased to be an executive officer on May 17, 1994.
15
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(1) UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
-------------------- OPTIONS EMPLOYEES IN PRICE EXPIRATION ------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ----------- ------------ --------- ---------- ------------- -------------
Thomas H. Cruikshank.... 90,000 8.67% $30.875 11/3/99 $ 899,896 $ 2,028,065
Dale P. Jones........... 45,000 4.33% 30.875 2/16/04 873,770 2,214,306
W. Bernard Pieper....... 50,000 4.81% 30.875 11/11/00 602,127 1,393,748
Alan A. Baker........... 27,500 2.65% 30.875 2/12/00 288,762 655,104
Tommy E. Knight......... 27,500 2.65% 30.875 2/16/04 533,971 1,353,187
Ken R. LeSuer........... 27,500 2.65% 30.875 2/16/04 533,971 1,353,187
All Optionees........... 1,039,000 100.00% 32.361(3) (3) 21,145,374 53,586,529
All Stockholders........ N/A N/A N/A N/A 2,322,043,030(4) 5,884,512,942(4)
--------
(1) All options are granted at the fair market value of the Common Stock on
the grant date and generally expire ten years from the grant date or three
years after date of retirement, if earlier. Options vest over a three year
period, with one-third of the shares becoming exercisable on each of the
first three anniversaries of the grant date.
(2) The assumed values result from certain prescribed rates of stock price
appreciation. Values for Messrs. Jones, Knight and LeSuer were calculated
based on a 10-year exercise period and values for Messrs. Baker,
Cruikshank and Pieper were calculated assuming their retirement at age 65
and a three-year exercise period after retirement. The actual value of the
option grants is dependent on future performance of the Common Stock and
overall stock market conditions. There is no assurance that the values
reflected in this table will be achieved. The Company did not use an
alternative formula for a grant date valuation, as it is not aware of any
formula which will determine with reasonable accuracy a present value
based on future unknown or volatile factors.
(3) The exercise price shown is a weighted average of all options granted in
1994. Options expire on either February 16, 2004 or December 9, 2004.
(4) "All Stockholders" values are calculated using the weighted average
exercise price for all options awarded in 1994, $32.361, based on the
outstanding shares of Common Stock on December 31, 1994.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE END (SHARES) FISCAL YEAR-END ($)
ON EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Thomas H. Cruikshank.... 0 $0 25,000 140,000 0 $202,500
Dale P. Jones........... 0 $0 15,000 75,000 0 101,250
W. Bernard Pieper....... 0 $0 15,000 80,000 0 112,500
Alan A. Baker........... 0 $0 8,333 44,167 0 61,875
Tommy E. Knight......... 0 $0 8,333 44,167 0 61,875
Ken R. LeSuer........... 0 $0 4,666 36,834 0 61,875
16
RETIREMENT PLAN
The purpose of the Halliburton Retirement Plan is to provide a floor for
retirement benefits provided under the Halliburton Profit Sharing and Savings
Plan (the "Halliburton Profit Sharing Plan").
The Halliburton Profit Sharing Plan is intended to be the primary plan to
provide retirement benefits to participating employees. The Company makes
annual contributions from profits to the Halliburton Profit Sharing Plan. Such
contributions may not be less than 10% of profits, as defined in the Plan
(reduced by Halliburton Retirement Plan expenses), except that such
contributions may not exceed the maximum amount deductible under Section 404 of
the Internal Revenue Code. Contributions under the Halliburton Profit Sharing
Plan for the year ended December 31, 1994 are set forth in footnote 5 to the
Summary Compensation Table on page 15. It is not possible to estimate the
amount of benefits payable at retirement under the Halliburton Profit Sharing
Plan to Messrs. Baker, Cruikshank, Jones and Pieper because of some or all of
the following: (i) amounts contributed in the future will be contingent on
future profits, (ii) amounts allocated from forfeited accounts will vary, (iii)
earnings on trust fund assets will vary, (iv) trust fund assets may appreciate
or depreciate in value, (v) the compensation of the individual may vary, (vi)
age at date of retirement may vary and (vii) the Plan may be changed or
discontinued.
The Halliburton Retirement Plan is intended to be a qualified defined benefit
pension plan which is designed as a floor plan integrated with the Halliburton
Profit Sharing Plan to provide an adequate level of retirement benefits for
employees. An employee is eligible to participate on completion of one year of
service. A participant is fully vested under the Halliburton Retirement Plan
with five years of vesting service; however, there is no vesting prior to
attaining five years of vesting service. Under the terms of the Halliburton
Retirement Plan, each monthly pension payment will be equal to the following
amount: (i) 1 1/3% of an employee's average monthly compensation (computed over
the highest three calendar year period) multiplied by such employee's years of
accrual service after January 1, 1990; minus (ii) a pension which is the
actuarial equivalent of the participant's eligible profit sharing accounts
(excluding any employer and employee contributions under the employee savings
portion of the program) accumulated since January 1, 1990 under the Halliburton
Profit Sharing Plan. The offset for the Halliburton Profit Sharing Plan is
based upon the 1984 Unisex Pension Mortality Table and an 8 1/2% interest
assumption. The form of payment is a life only annuity or the actuarial
equivalent thereof. A vested participant may retire and commence receiving
payment of benefits after attaining age 55. Early retirement benefits are
reduced from the benefit which would otherwise be payable at the normal
retirement age of 65. As noted above, the Halliburton Retirement Plan is
integrated with the Halliburton Profit Sharing Plan so that benefits under the
Halliburton Retirement Plan are offset by benefits under the Halliburton Profit
Sharing Plan. Since the latter cannot be estimated, the maximum benefits under
the integrated plans cannot be estimated. Assuming, however, that benefits
under the Halliburton Profit Sharing Plan will not equal or exceed benefits
under the Halliburton Retirement Plan, the estimated annual benefits under the
integrated plans commencing at normal retirement at age 65, without giving
effect to ERISA benefit limitations but reflecting the current ERISA limitation
on creditable compensation of $150,000, for the individuals named in the
Summary Compensation Table are as follows: Mr. Baker $14,333, Mr. Cruikshank
$13,833, Mr. Jones $23,667, Mr. LeSuer $22,000 and Mr. Pieper $11,000. The
retirement benefits have been computed on the assumptions that (i) payments
will be paid in the form of a life annuity; (ii) employment will continue until
normal retirement at age 65 and (iii) levels of creditable compensation will
remain constant. Mr. Knight is not a participant in this Plan.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
None of the executive officers named in the Summary Compensation Table has an
employment agreement with the Company.
17
Pursuant to the 1993 Stock and Long-Term Incentive Plan, in the event of a
change-in-control:
A. The Compensation Committee, acting in its sole discretion, will act to
effect one or more of the following alternatives with respect to
outstanding stock options: (i) accelerate the time at which options may be
exercised; (ii) cancel the options and pay the Optionees the excess of the
per share value offered to stockholders in the change-in-control
transaction over the exercise price(s) of the shares subject to options;
(iii) make adjustments to the options as deemed appropriate to reflect the
change-in-control or (iv) convert the options to rights to purchase a
proportionate amount of shares of stock or other securities or property
paid to shareholders in the change-in-control transaction.
B. The Compensation Committee may, with respect to outstanding restricted
stock, provide for full vesting on all shares of restricted stock and
termination of all restrictions applicable thereto.
Pursuant to the Career Executive Incentive Stock Plan, the Compensation
Committee may, in the event of a tender offer for all or a part of the
Company's Common Stock, accelerate the lapse of restrictions on any or all
shares on which restrictions have not theretofore lapsed.
DIRECTORS' COMPENSATION, RESTRICTED STOCK PLAN AND RETIREMENT PLAN
Directors' Fees and Deferred Compensation Plan
All non-employee Directors of the Company receive an annual fee of $30,000
and an attendance fee of $2,000 for each meeting of the Board of Directors.
Such Directors also receive an attendance fee of $2,000 per meeting for
Committee service. The Chairmen of the Compensation, Audit, Nominating,
Environment, Health and Safety and Management Oversight Committees each receive
an additional $2,000 annually for service in such capacities. Under the
Company's Directors' Deferred Compensation Plan, Directors are permitted to
defer their fees, or a portion thereof, until after they cease to be a Director
of the Company. A participant may elect, on a prospective basis, to have his or
her deferred compensation account either credited quarterly with interest at
the prime rate of Citibank, N.A. or translated on a quarterly basis into
Company Common Stock equivalents. Distribution will be made in cash either in a
lump sum or in annual installments over a 5- or 10-year period, as determined
by the committee appointed to administer the Plan in its discretion. Ms.
Armstrong and Messrs. Campbell, Crandall, Staubach and Stegemeier have elected
to participate in the Plan.
Directors' Restricted Stock Plan
Pursuant to the terms of the Restricted Stock Plan for Non-Employee Directors
("Directors' Restricted Stock Plan"), which was approved by the stockholders at
the 1993 Annual Meeting, each non-employee Director receives an annual award of
200 restricted shares of Common Stock as a part of his or her compensation. The
awards are in addition to the Directors' annual retainer and attendance fees
and to amounts which would be payable under the Directors' Retirement Plan,
described below. Shares awarded under the Directors' Restricted Stock Plan may
not be sold, assigned, pledged or otherwise transferred or encumbered until the
restrictions are removed. Restrictions will be removed following termination of
Board service under certain circumstances, which include, among others, death
or disability, retirement pursuant to the Company's mandatory retirement
policy, or early retirement after at least four years of service. During the
restriction period, Directors have the right to vote and to receive dividends
with respect to the restricted shares. Any shares which, pursuant to such
Plan's provisions, remain restricted following termination of service will be
forfeited.
18
Directors' Retirement Plan
Under the terms of the Retirement Plan for Directors of the Company
("Directors' Retirement Plan"), a non-employee Director participant upon the
benefit commencement date (the later of a participant's termination date or
attainment of 65) will receive an annual benefit equal to the last annual
retainer for such participant for a period of years equal to such participant's
years of service on his or her termination date; provided that a minimum
benefit payment period for each participant is 5 years. Non-employee Directors
become participants in the Directors' Retirement Plan upon the completion of
three years service, as defined in such Plan. Upon the death of a participant,
benefit payments will be made to the surviving spouse, if any, over the
remainder of the retirement benefit payment period. Years of service for each
Director participant under the Plan are: Ms. Armstrong--18, Mr. Campbell--7,
Lord Clitheroe--8, Mr. Crandall--10, Mr. Howell--4, Mr. Staubach--4 and Mr.
Williamson--14. Assets of the Company are transferred to Texas Commerce Bank
Dallas, as Trustee, to be held pursuant to the terms of an irrevocable grantor
trust to aid the Company in meeting its obligations under the Directors'
Retirement Plan. The corpus and income of the trust are treated as assets and
income of the Company for federal income tax purposes and are subject to the
claims of general creditors of the Company to the extent provided therein.
CERTAIN TRANSACTIONS
During the period January 1, 1994 through March 20, 1995, The Staubach
Company acted as agent for the Company's Halliburton Energy Services division
("HES") with respect to negotiation of three subleases, for which services it
has received or will receive payments from HES of $184,687, in the aggregate.
Mr. Staubach is the Chairman and Chief Executive Officer of The Staubach
Company.
CERTAIN FILINGS
Section 16(a) of the Securities Exchange Act of 1934 and the rules thereunder
require the Company's officers and Directors, and persons who own more than 10
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange and to furnish the Company with
copies. On February 1, 1994, Ken R. LeSuer effected an intra-plan transfer of
the value of his beneficial interest in 2,491.3 shares of the Company's Common
Stock in the Halliburton Stock Fund to another fund among the four funds
available for investment by a participant in the Halliburton Profit Sharing and
Savings Plan. The amended Form 4 filed with the Securities and Exchange
Commission relating to such transfer was inadvertently not filed in a timely
manner.
RATIFICATION OF THE SELECTION OF AUDITORS
(ITEM 2)
Arthur Andersen LLP or its predecessor, Arthur Andersen & Co., has examined
the financial statements of the Company since 1946. A resolution will be
presented at the Annual Meeting to ratify the appointment by the Board of
Directors of the Company of that firm as independent accountants to examine the
financial statements and the books and records of the Company for the year
ending December 31, 1995. Such appointment was made upon the recommendation of
the Audit Committee. The Company has been advised by Arthur Andersen LLP that
neither the firm nor any member thereof has any direct financial interest or
any material indirect interest in the Company and, during at least the past
three years, neither such firm nor
19
any member thereof has had any connection with the Company in the capacity of
promoter, underwriter, voting trustee, Director, officer or employee.
Representatives of such firm are expected to be present at the Annual
Meeting, will have an opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions from
stockholders.
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock represented at the Annual Meeting and entitled to vote
on the matter is needed to approve the proposal.
If the stockholders do not ratify the selection of Arthur Andersen LLP, the
selection of independent accountants will be reconsidered by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS TO EXAMINE THE FINANCIAL
STATEMENTS AND BOOKS AND RECORDS OF THE COMPANY FOR THE YEAR 1995.
SHAREHOLDER PROPOSAL RELATING TO CUMULATIVE VOTING
(ITEM 3)
The Laborers' National (Industrial) Pension Fund, 905 16th Street, N.W.,
Washington, D.C. 20006-1765, a holder of 11,400 shares of the Company's Common
Stock, has stated its intention to present the following proposal for
consideration at the Annual Meeting of Stockholders. The proposal and
supporting statement, which the Board of Directors and the Company oppose, are
set forth below.
RESOLUTION TO ADOPT CUMULATIVE VOTING
BE IT RESOLVED: that the stockholders of the Halliburton Company
("Company"), assembled in annual meeting in person and by proxy, hereby
request the Board of Directors to take steps necessary to provide for
cumulative voting in the election of directors, which means each stockholder
shall be entitled to as many votes as shall equal the number of shares he or
she owns multiplied by the number of directors to be elected, and he or she
may cast all of such votes for a single candidate, or any two or more of them
as he or she may see fit.
SUPPORTING STATEMENT
Cumulative voting is one of the few ways stockholders can attempt to elect
members who they believe better represent their views.
It is vitally needed at the Halliburton Company, where the current board has
sat passively by, collecting its annual retainer of $30,000 and accruing a
lifetime pension at that amount, while the company has under performed the
market and its industry peer group for the past two years.
Cumulative voting maximizes a stockholder's voting power by allowing him or
her to concentrate their votes for a single nominee or combination of
nominees.
For example, the Company has ten directors. Without cumulative voting, the
owners of ten percent (10%) of the company's stock do not have a realistic
chance of electing a director. They would only be able to cast their ten
percent (10%) for each nominee. However, with cumulative voting, those same
owners would be able to actually elect a nominee by lumping all of their votes
for that nominee.
20
Even if dissident stockholders do not have enough votes to elect nominees,
cumulative voting ensures that management and the board will consider their
views.
Please mark your ballot in support of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS SHAREHOLDER PROPOSAL FOR
THE FOLLOWING REASONS:
Prior to discussing the merits of the Shareholder Proposal, management feels
that it should not let pass without comment what it believes to be inaccuracies
in the second paragraph of the Proponent's supporting statement. The Board has
not sat passively by at any time. During the last two years, as well as in all
other periods, the Board has been very active in providing direction and
guidance to management of the Company. The Proponent of this proposal appears
to fail to understand the substantial actions taken by the Company, as directed
by the Board, to improve performance and shareholder return. Please see the
discussion and Chart II on page 13 which compares the Company's total
stockholders' return with the S&P 500 and S&P Energy Composite indices over the
last three years. Moreover, members of the Board do not receive a lifetime
pension of $30,000 annually. Each member receives retirement benefits following
his or her retirement which are generally over a period equal to that of his or
her Board service.
As to the proposal itself, the identical proposal was submitted by the
Proponent at the 1994 Annual Meeting of Stockholders, at which meeting it was
defeated. In the opinion of the Board, the Proposal lacked merit then and it
continues to lack merit.
The Board of Directors has a duty and responsibility to manage the business
and affairs of the Company in the best interests of all stockholders. In the
Board's opinion, cumulative voting on the election of Directors would not be
beneficial to our Directors in fulfilling this obligation. This can best be
achieved by the election of Directors who represent all stockholders, without
favoritism or allegiance to any particular group.
The Company's present system of electing Directors, whereby owners of a
plurality of the shares elect a Board of Directors, has enabled the Board to
act for the benefit of the Company and all its shareholders. If a system of
cumulative voting is adopted, holders of a small minority of the outstanding
shares or a special interest group could elect one or more Directors to
represent their interests on the Board. The Board believes that the election of
Directors who view themselves as representing or answerable to a limited group
of stockholders could result in partisanship, factionalism and discord among
Directors and thus impede the functioning of the Board and weaken its ability
to represent the stockholders as a whole. There should never be a question as
to whether a Director is acting for the benefit of all stockholders or as the
representative of a special group.
Approval of this proposal requires an affirmative vote by a majority of the
Company's Common Stock represented at the Annual Meeting and entitled to vote
on this matter. The adoption of this proposal would not, in itself, institute
cumulative voting but would constitute a recommendation to the Board. In order
to initiate cumulative voting, the Board would have to adopt and submit a
proposed amendment to the Certificate of Incorporation for consideration by
stockholders at a later meeting. The Board does not feel that such action would
be appropriate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS SHAREHOLDER PROPOSAL.
21
COST OF SOLICITATION
Officers and other employees of the Company may solicit proxies personally,
by telephone or other telecommunications, from some stockholders if proxies are
not received promptly. The Company will reimburse banks, brokers or other
persons holding Company Common Stock in their names or in the names of their
nominees for their charges and expenses in forwarding proxies and proxy
material to beneficial owners of the Company's Common Stock. All expenses of
solicitation of proxies will be borne by the Company. In addition, Georgeson &
Company Inc., New York City, has been retained to assist in the solicitation of
proxies for the 1995 Annual Meeting of Stockholders at a fee of $12,000 plus
reasonable expenses.
STOCKHOLDER PROPOSALS FOR THE 1996 ANNUAL MEETING
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the Securities and Exchange
Commission. Should a stockholder intend to present a proposal at the 1996
Annual Meeting, it must be received by the Secretary of the Company (3600
Lincoln Plaza, 500 N. Akard, Dallas, Texas 75201-3391) not later than November
22, 1995 and must comply with all of the requirements of Rule 14a-8 under the
Securities Exchange Act of 1934 in order to be included in the Company's proxy
statement and form of proxy relating to that meeting. The 1996 Annual Meeting
of Stockholders will be held May 21, 1996.
OTHER BUSINESS
The Company's bylaws provide that in addition to any other applicable
requirements, for business to be properly brought before the Annual Meeting by
a stockholder, the stockholder must give timely notice in writing to the
Secretary. To be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the Company, not less than
fifty (50) days nor more than seventy-five (75) days prior to the meeting. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the Annual Meeting (i) a brief description
of the business desired to be brought before the Annual Meeting and the reasons
for conducting such business at the Annual Meeting, (ii) the name and record
address of the stockholder proposing such business, (iii) the class and number
of shares of the Company which are beneficially owned by the stockholder and
(iv) any material interest of the stockholder in such business. This
requirement does not preclude discussion by any stockholder of any business
properly brought before the Annual Meeting in accordance with such procedures.
The management of the Company is not aware of any business to come before the
meeting other than those matters described above in this Proxy Statement. If
any other matters should properly come before the meeting, however, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the person or persons voting the proxies.
By Authority of the Board of Directors.
[SIGNATURE OF SUSAN S. KEITH APPEARS HERE]
Susan S. Keith
Vice President and Secretary
March 21, 1995
22
PROXY
HALLIBURTON COMPANY
Proxy for 1995 Annual Meeting of Stockholders
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints T.H. Cruikshank, D.P. Jones and S.S. Keith,
and any of them, proxies or proxy with full power of substitution and revocation
as to each of them, to represent the undersigned and to act and vote, with all
powers which the undersigned would possess if personally present, at the Annual
Meeting of Stockholders of Halliburton Company to be held in the Parisian Room
of the Fairmont Hotel, 1717 N. Akard, Dallas, Texas, on Tuesday, May 16, 1995,
on the following matters and in their discretion on any other matters which may
come before the meeting or any adjournments thereof. Receipt of Notice-Proxy
Statement dated March 21, 1995, is acknowledged.
(continued and to be signed on the reverse side)
To vote in accordance with the Board of Directors' recommendations just sign
below; no boxes need to be checked.
[ X ] Please mark
your votes
as this
----------------- --------------------- --------------------
COMMON STOCK FUND RESTRICTED STOCK
--------------------------------------------------------------------------------
The Board of Directors Recommends a Vote FOR Items 1 and 2.
--------------------------------------------------------------------------------
Item 1--Election of Directors
FOR all nominees WITHHOLD AUTHORITY Anne L. Armstrong, Lord Clitheroe,
(except as speci- to vote for all R. L. Crandall, T. H. Cruikshank,
fied below). nominees listed at right. W. R. Howell, D. P. Jones,
C. J. Silas, R. T. Staubach,
[ ] [ ] R. J. Stegemeier and
E. L. Williamson.
(Instruction: To withhold authority to vote for an individual nominee write that
nominee's name on the space provided below.)
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
Item 2--Proposal for ratification of selection [ ] [ ] [ ]
of independent public accountants for the
Company for 1995.
--------------------------------------------------------------------------------
The Board of Directors Recommends a Vote AGAINST Item 3.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
Item 3--Shareholder proposal relating to [ ] [ ] [ ]
cumulative voting in election of Directors.
Item 4--In their discretion, upon such other business as may properly come
before the meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned.
In the absence of such direction the proxy will be voted FOR the nominees listed
in Item 1 and FOR the Proposal set forth in Item 2 and AGAINST the Proposal set
forth in Item 3.
I PLAN TO ATTEND THE MEETING [ ]
(Sign exactly as name(s) appears at left.
If shares are held jointly, each holder
should sign. If signing for estate, trust or
corporation, title or capacity should be stated.)
Dated __________________________________, 1995
________________________________________
________________________________________
(Signatures if held jointly)
Please date, sign and return this Proxy in the enclosed business
envelope.