SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Section 240.14a-12
HALLIBURTON COMPANY
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Notes:
[HALLIBURTON COMPANY LOGO]
March 22, 1994
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Halliburton Company which will be held on Tuesday, May 17, 1994, at 9:00 a.m.
in the Venetian Room of the Fairmont Hotel, 1717 N. Akard, Dallas, Texas 75201.
The accompanying proxy statement contains information about matters to be
considered at the Annual Meeting.
The first matter is the election of Directors who will be responsible for the
direction of the affairs of the Company until the next Annual Meeting.
The second matter is a proposal to ratify the appointment of Arthur Andersen
& Co. as independent accountants to examine the financial statements and books
and records of the Company for 1994.
The last item is a shareholder proposal requesting that the Board of
Directors take the necessary steps to provide for cumulative voting in the
election of Directors.
YOUR BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT YOU VOTE "FOR" THE
NOMINEES FOR DIRECTOR LISTED IN THE PROXY STATEMENT, "FOR" THE RATIFICATION OF
THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS AND "AGAINST" THE PROPOSAL TO
PROVIDE FOR CUMULATIVE VOTING IN THE ELECTION OF DIRECTORS.
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,
/s/ THOMAS H. CRUIKSHANK
Thomas H. Cruikshank
Chairman of the Board
and Chief Executive Officer
[HALLIBURTON COMPANY LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 1994
The Annual Meeting of Stockholders of HALLIBURTON COMPANY, a Delaware
corporation (the "Company"), will be held on Tuesday, May 17, 1994, at 9:00
a.m., in the Venetian 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 eleven (11) 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 & Co., as independent accountants to examine the financial
statements and books and records of the Company for the year 1994.
3. To consider and act upon a shareholder proposal requesting that the Board
of Directors take the necessary steps to provide for cumulative voting in
the election 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 21, 1994, 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,
/s/ SUSAN S. KEITH
Susan S. Keith
Vice President and Secretary
March 22, 1994
----------------
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 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 21, 1994. The Company Common
Stock, par value $2.50, is the only class of capital stock of the Company that
is outstanding. As of March 21, 1994, there were 114,175,473 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 proposal relating to
cumulative voting.
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 by brokers or nominees as to which instructions have not
been received from the beneficial owners or persons entitled to vote that the
broker or nominee does not have discretionary power to vote on a particular
matter) 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 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.
1
This Proxy Statement and form of proxy are being sent to stockholders on or
about April 4, 1994. The Company's Annual Report to Stockholders, including
financial statements, for the fiscal year ended December 31, 1993 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. Edwin L. Cox, who has served as a Director since 1979, is retiring from
the Board of Directors immediately prior to the Annual Meeting of Stockholders
on May 17, 1994, and will not be a candidate for election for the ensuing year.
Mr. Richard J. Stegemeier is being proposed for the first time for election as
a Director to fill the vacancy on the Board which would otherwise exist because
of Mr. Cox's retirement. Mr. C. J. Silas, who was elected as a Director at a
meeting of the Board of Directors on July 15, 1993, is also being proposed for
election to the Board of Directors by stockholders for the first time.
Eleven Directors are to be elected to serve for the ensuing year and until
their successors are elected and qualify. Ten of the eleven 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 eleven
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, 66, Chairman of Board of Trustees, Center
for Strategic and International Studies, Washington, D.C.;
former Chairman of the President's Foreign Intelligence Advisory
Board, 1981-1990; former Ambassador to Great Britain; joined
Halliburton Company Board in 1977; Chairman of the Environment,
Health and Safety Committee and member of the Management
Oversight and Nominating Committees; Director of American
Express Company, Boise Cascade Corporation, General Motors
Corporation and Glaxo Holdings p.l.c.
ROBERT W. CAMPBELL, 71, Chairman of the Board (retired),
Canadian Pacific Limited (engaged in commercial transportation,
development of natural resource properties, manufacturing and
other activities world-wide), 1986-1989; joined Halliburton
Company Board in 1989; Chairman of the Nominating Committee and
member of the Audit and Management Oversight Committees;
Director of Ranger Oil Limited.
LORD CLITHEROE, 64, Chairman, The Yorkshire Bank, PLC; Deputy
Chief Executive, The RTZ Corporation PLC (an international group
of mining and industrial companies), 1987-1989; Executive
Director, The RTZ Corporation PLC, 1968-1987; joined Halliburton
Company Board in 1987; Chairman of the Management Oversight
Committee and member of the Environment, Health and Safety and
Nominating Committees.
2
ROBERT L. CRANDALL, 58, Chairman and President, AMR
Corporation and American Airlines, Inc. (engaged primarily in
the air transportation business) since 1985; joined Halliburton
Company Board in 1986; Vice 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, 62, Chairman of the Board and Chief
Executive Officer of the Company; President and Chief Executive
Officer of the Company, 1983-1989; joined Halliburton Company
Board in 1977; Director of Goodyear Tire and Rubber Company and
The Williams Companies, Inc.
WILLIAM R. HOWELL, 58, Chairman of the Board and Chief
Executive Officer, J.C. Penney Company, Inc. (a major retailer)
since 1983; 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, 57, President of the Company; Executive Vice
President -- Oil Field Services of the Company, 1987-1989;
Senior Vice President of the Company, 1987; joined Halliburton
Company Board in 1988.
C. J. SILAS, 61, Chairman of the Board and Chief Executive
Officer, Phillips Petroleum Company (engaged in exploration and
production of crude oil, natural gas and natural gas liquids on
a worldwide basis, the manufacture of plastics and
petrochemicals and other activities) since 1985; joined
Halliburton Company Board in 1993; member of the Compensation,
Audit and Management Oversight Committees; Director of Phillips
Petroleum Company, Comsat Corporation and Reader's Digest
Association, Inc.
ROGER T. STAUBACH, 52, Chairman of the Board and Chief
Executive Officer, The Staubach Company (a diversified real
estate company); Chairman, Chief Executive Officer and
President, The Staubach Company, 1983-1991; joined Halliburton
Company Board in 1991; member of the Compensation, Management
Oversight and Environment, Health and Safety Committees;
Director of Gibson Greetings, Inc., Life Partners Group, Inc.,
First USA, Inc., Brinker International, Inc. and Columbus Realty
Trust.
3
RICHARD J. STEGEMEIER, 65, Chairman of the Board, since 1989,
and Chief Executive Officer, since 1988, Unocal Corporation (an
energy resources company); President, Unocal Corporation, 1985-
1992; Director of Unocal Corporation, First Interstate Bancorp,
Foundation Health Corporation, Northrop Corporation, and
Outboard Marine Corporation.
E. L. WILLIAMSON, 69, Chairman of the Board and Chief
Executive Officer (retired), The Louisiana Land and Exploration
Company (engaged principally in the exploration, development and
production of natural resources), 1985-1988; joined Halliburton
Company Board in 1981; Vice Chairman of the Environment, Health
and Safety Committee and member of the Compensation and
Management Oversight Committees; Director of The Louisiana Land
and Exploration Company, Hibernia Corporation and Central
Louisiana Electric Company, Inc.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to persons 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, 1993), 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. 13,871,585(1) 12.2%
82 Devonshire Street
Boston, MA 02109
Barrow, Hanley, Mewhinney & Strauss, Inc. 5,966,800(2) 5.2%
280 Crescent Court, 19th Floor
Dallas, TX 75201
- --------
(1) The number of shares reported includes 12,082,376 shares beneficially owned
by Fidelity Management & Research Company, 1,661,809 shares owned by
Fidelity Management Trust Company and 127,400 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 voting
power with respect to 1,252,809 shares of Common Stock.
(2) Barrow, Hanley, Mewhinney & Strauss, Inc. has sole investment power over
the shares, sole voting power with respect to 2,096,600 shares and shared
voting power with respect to 3,870,200 shares.
4
The following table sets forth, as of March 21, 1994, 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
12 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.............................. 1,200 *
Alan A. Baker(3)(4)............................ 56,961 1,200(2) *
Robert W. Campbell............................. 700 *
Lord Clitheroe................................. 500 *
Edwin L. Cox................................... 1,200 *
Robert L. Crandall............................. 700 *
Thomas H. Cruikshank(3)(4)..................... 120,000 *
William R. Howell.............................. 500 *
Dale P. Jones(3)(4)............................ 71,987 *
Tommy E. Knight(4)............................. 30,250
W. Bernard Pieper(4)........................... 79,106 *
C. J. Silas.................................... 200 *
Roger T. Staubach.............................. 700 *
Richard J. Stegemeier.......................... 1,000(2) *
E. L. Williamson............................... 700 *
Shares owned by all current Directors, nominees
for Director and executive officers as a group
(18 persons)(4)............................... 446,191 2,200 *
- --------
* 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 2,096,482 shares of Company Common Stock at March 21,
1994. 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 7,267 shares which might be deemed to be
beneficially owned as of March 21, 1994 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 shares are held in joint tenancy by Mr. Baker and his wife, who
share voting and investment power with respect thereto. 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.
(3) Not included in the table for Messrs. Cruikshank and Baker are 400 shares
and 16,207 shares, respectively, held by their wives and 3,000 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-8,333; Mr. Cruikshank-25,000; Mr. Jones-
15,000; Mr. Knight-8,333; Mr. Pieper-15,000 and two unnamed executive
officers-each 4,667. 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 5 occasions, the
Compensation Committee met on 4 occasions, the Nominating Committee met on 3
occasions and the Audit, Environment, Health and Safety and Management
Oversight Committees each met on 2 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 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 Halliburton Annual
Incentive Compensation 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 to increased shareholder value and to the
achievement of the Company's business and strategic goals.
The Committee has responsibility for overseeing the compensation program for
the members of the Executive Committee of the Company 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 any "interlocking"
relationship with the board of directors or compensation committee of any
unaffiliated corporation.
OVERALL EXECUTIVE COMPENSATION PHILOSOPHY
Halliburton's compensation objective is to provide an overall executive
compensation package for senior executives which is integrated with business
and organizational strategies and serves to focus executives on enhancement of
shareholder value and on short-term and long-term goals that are important to
the Company. Beyond that, the Committee's priorities are to assure that the
executive compensation programs enable the Company to attract, retain and
motivate the high caliber executives required for the success of the business.
The Committee is convinced that providing a competitive total compensation
package for each of the executives is essential to the success of the Company
and is in the best interest of shareholders. Furthermore, the Committee
believes that maximum performance can be encouraged and reinforced through the
use of cash and stock-based incentive compensation programs linked to business
results. In determining what it deems to be appropriate types and amounts of
compensation for the Chief Executive Officer, the Committee has consulted with
outside compensation consultants and has had access to and reviewed independent
compensation data.
In the design and administration of executive compensation programs, the
Committee makes reference to, but does not necessarily target, current market
practices measured 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 industry, as well as practices of
similarly sized companies within general industry. The industry-specific
companies utilized for compensation purposes are not the same companies which
comprise the published peer group index in the Performance Graph included in
this proxy statement. The comparator group in the Performance Graph is
representative of the broad energy industry which the Company services; the
comparator group used for compensation purposes is, however, specific to its
energy services and engineering/construction operations, which, in the
Committee's view, provides the most comparable reference for the Company's
executive positions.
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
somewhat above market levels, given outstanding corporate performance. The
executive compensation package currently consists of the following components:
(1) base salary, (2) annual incentive compensation opportunity, (3) stock-based
awards and (4) benefits, including supplemental retirement benefits.
BASE SALARY
Salaries for the five highest paid executives (the "Named Executives") are
listed in the Summary Compensation Table. Executive officers' salaries are
reviewed annually by the Committee. In making salary
8
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.
The base salary for Mr. Cruikshank (Chairman of the Board and Chief Executive
Officer of the Company) was reviewed at the December 1992 and 1993 meetings of
the Committee. Notwithstanding the Committee's concern that Mr. Cruikshank has
not received an increase in salary since January 1, 1991, the Committee did not
adjust Mr. Cruikshank's salary for either 1993 or 1994 in view of the continued
instability of our industry markets, the uncertainty of the economic
environment and the on-going restructuring and cost reduction efforts within
the Company.
ANNUAL INCENTIVE COMPENSATION
The Halliburton Annual Incentive Compensation Plan (the "Annual Incentive
Plan") provides a means to link executive officers' annual cash compensation to
the achievement of one-year financial objectives for the corporation as a
whole. Members of the Executive Committee (composed of seven persons, including
the Named Executives), Company officers and certain senior Company managers are
eligible to participate in such Plan.
At the beginning of each year, the Committee selects the performance
measure(s) and the financial criteria used as the basis for earning an
incentive payment under the Annual Incentive Plan. In 1993, the Company's
consolidated (after-tax) net income was used as the performance measure. The
financial requirements for 1993 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.
No incentive awards for 1993 were earned by Mr. Cruikshank or the other Named
Executives because the Company's consolidated financial results in 1993 failed
to meet the necessary performance threshold.
STOCK-BASED COMPENSATION
The 1993 Stock and Long-Term Incentive Plan (the "1993 Plan"), approved by
the shareholders at the last Annual Meeting, 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 designing individual long-term incentive awards.
Stock options, which became available for use under the 1993 Plan, were the
principal long-term incentive granted to executive officers in 1993. Stock
options granted in 1993 are exercisable at the fair market value of the Common
Stock on the date of grant and become exercisable during employment over a
three-year period ( 1/3 per year). The Committee believes that a significant
portion of executives' compensation should be dependent on value created for
the shareholders. 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 the 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 internal job
relationships, as well as a reference to competitive practices in long-term
incentive opportunities for similar positions. An option for 75,000 shares was
granted to Mr. Cruikshank in May 1993.
The Committee also made limited use of grants of restricted stock to selected
key employees to recognize significant contributions and to executives who
received promotions in order to build their stock ownership
9
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 plans in excess of maximum contributions
permitted under the provisions of Section 401(a)(17) and Section 415 of the
Internal Revenue Code (commonly known as ERISA Offset Benefits) and (ii)
discretionary additions, in such amounts as the Committee may determine, are
made to provide additional supplemental retirement benefits. Interest on active
and retired participants' accounts is accrued at the rate of five and ten
percent per annum, respectively, while interest in ERISA Offset Benefits
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 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 1993 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 comparator
group chief executive officers. In 1993 deferred compensation additions to
supplement future retirement benefits and ERISA Offset Benefits for
Mr. Cruikshank totaled $500,692.
POLICY WITH RESPECT TO $1 MILLION DEDUCTION LIMITATION
Based on proposed regulations relating to the new Internal Revenue Code
provisions on deductibility of executive compensation above $1 million, the
Committee believes that stock options granted under the 1993 Plan meet the
transition rule requirements for performance-based compensation so as to
exclude such option shares from the deduction limit. Any payments to a Named
Executive under the Annual Incentive Compensation Plan would, however, be
includable as compensation and, thus, would have the potential of impacting the
deduction limit. Although the Committee believes it is unlikely that any such
payments would cause a Named Executive's 1994 compensation to exceed $1
million, to the extent that any compensation of a Named Executive would
otherwise be disallowable, it is the Committee's policy that such amounts be
deferred until the limitation no longer applies with respect to such Named
Executive.
Respectfully submitted,
THE COMPENSATION COMMITTEE OF DIRECTORS
Anne L. Armstrong *W. R. Howell
Robert W. Campbell *C. J. Silas
Lord Clitheroe *Roger T. Staubach
Edwin L. Cox *E. L. Williamson
*Robert L. Crandall
- --------
* During July 1993, the membership of the Committee was reduced from nine
Directors (being all of the outside Directors) to five. The members
comprising the Committee as of December 31, 1993 are noted with an asterisk.
10
CORPORATE PERFORMANCE GRAPH
The following graph compares the Company's total stockholder return over the
last five years to the Standard & Poors 500 Stock Index ("S&P 500") and the
Standard & Poors Energy Composite Index ("S&P Energy Composite"). Cumulative
total return values for the S&P 500, S&P Energy Composite and the Company are
based on annual total return values which assume reinvestment of dividends. The
stockholder return shown on the graph below is not necessarily indicative of
future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL STOCKHOLDER RETURN AMONG HALLIBURTON
COMPANY, S&P 500 AND S&P ENERGY COMPOSITE
The comparison of total return on investment (change in year end stock price
plus reinvested dividends) assumes that $100 was invested on December 31, 1988
in each of Halliburton Company, the S&P 500 and the S&P Energy Composite with
investment weighted on the basis of market capitalization.
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
HALLIBURTON COMPANY............................. 100 157 171 110 114 130
S & P 500....................................... 100 132 128 166 179 197
S & P ENERGY COMPOSITE.......................... 100 140 144 155 158 183
11
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------ -----------------------------
AWARDS PAYOUTS
--------------------- -------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTION PAYOUTS COMPENSATION
POSITION YEAR ($) ($)(1) ($)(2) ($)(3) (#) ($)(4) ($)(5)
------------------ ---- -------- ------- ------------ ---------- ---------- ------- ------------
Thomas H. Cruikshank.... 1993 $800,000 $ 0 -- $ 0 75,000 N/A $507,867
Chairman of the Board
and Chief 1992 $800,000 $ 0 -- $ 0 N/A N/A $404,598
Executive Officer of
the Company 1991 $800,000 $ 0 -- $ 0 N/A N/A $402,483
Dale P. Jones........... 1993 $500,000 $ 0 -- $ 0 45,000 N/A $173,695
President of the
Company 1992 $500,000 $ 0 -- $547,500 N/A N/A $228,726
1991 $500,000 $ 0 -- $297,500 N/A N/A $223,079
W. Bernard Pieper....... 1993 $495,000 $ 0 -- $ 0 45,000 N/A $124,131
Vice Chairman of the
Company 1992 $487,596 $ 0 -- $547,500 N/A N/A $254,503
1991 $433,327 $ 0 -- $297,500 N/A N/A $246,280
Alan A. Baker........... 1993 $435,000 $ 0 -- $ 0 25,000 N/A $254,994
Chairman and Chief 1992 $435,000 $ 0 -- $547,500 N/A N/A $225,116
Executive
Officer, Halliburton 1991 $435,000 $ 0 -- $297,500 N/A N/A $194,331
Energy Services
Division of the Company
Tommy E. Knight(6)...... 1993 $395,962 $ 0 -- $ 0 25,000 N/A $128,280
President and Chief
Executive 1992 $323,558 $95,833 -- $177,750 N/A N/A $127,501
Officer, Brown & Root,
Inc. 1991 N/A N/A N/A N/A N/A N/A N/A
- --------
(1) Effective January 1, 1991, the Board of Directors established the
Halliburton Annual Incentive Plan which 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. Messrs. Cruikshank,
Jones, Pieper and Baker participated in such Plan in 1991, 1992 and 1993;
however, since performance goals for such years were not achieved, no
amounts were paid to any of them for such plan years. Mr. Knight
participated in the annual incentive plan of Brown & Root, Inc. for 1992.
Having joined the Halliburton Company Executive Committee during 1992, in
1993, Mr. Knight participated in the Halliburton Annual Incentive Plan in
lieu of the Brown & Root annual incentive plan but no amounts were paid to
him for 1993 since, as noted above, the Plan performance goal for 1993 was
not achieved.
(2) The dollar value of perquisites and other personal benefits for each of
the named executive officers was less than established reporting
thresholds.
(3) Restrictions on shares on all of the following awards lapse over a 10-year
period at 10% per year: in 1991, Messrs. Jones, Pieper and Baker were each
awarded 10,000 restricted shares; and in 1992, Messrs. Jones and Knight
were awarded 20,000 and 6,000 restricted shares, respectively. In 1992,
20,000 restricted shares each were awarded to Messrs. Pieper and Baker,
which restrictions lapse in equal annual installments over periods of 5
and 4 years, respectively, to correspond with their normal retirement
dates. No restricted shares were awarded to any of the named officers in
1993. The total number and value of restricted shares held by each of the
above individuals as of December 31, 1993, are as follows:
TOTAL AGGREGATE
RESTRICTED SHARES MARKET VALUE
----------------- ------------
Mr. Cruikshank........................... 20,672 $ 658,920
Mr. Jones................................ 43,606 $1,389,941
Mr. Pieper............................... 27,000 $ 860,625
Mr. Baker................................ 36,650 $1,168,219
Mr. Knight............................... 13,670 $ 435,731
Dividends are paid on the restricted shares.
(4) Although the Company received shareholder approval of the 1993 Plan, no
long-term incentive program was implemented during 1993 pursuant to such
Plan, and no other vehicles 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,
1993: (i) profit sharing plan contributions or termination surplus
accruals thereunder for Mr. Cruikshank-$289; Mr. Jones-$289; Mr. Pieper-
$289; Mr. Baker-$289 and Mr. Knight-$27,203; (ii) supplemental retirement
plan contributions for Mr. Cruikshank-$500,000; Mr. Jones-$170,000; Mr.
Pieper-$120,000; Mr. Baker-$250,000 and Mr. Knight-$70,000; (iii) 401(k)
plan matching contributions for Mr. Jones-$2,248 and Mr. Baker-$2,248;
(iv) ERISA offset benefit accruals for Mr. Cruikshank-$692, Mr. Jones-
$324, Mr. Pieper-$318, Mr. Baker-$244 and Mr. Knight-$29,773 and (v)
above-market earnings on ERISA offset benefit accounts for Mr. Cruikshank-
$6,886; Mr. Jones-$834; Mr. Pieper-$3,524; Mr. Baker-$496 and Mr. Knight-
$1,304. A Company contribution to split dollar life insurance premiums for
Mr. Baker was made in the amount of $2,506.
(6) Mr. Knight became an executive officer of the Company on June 1, 1992.
12
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(1) UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
-------------------- OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ----------- ------------ --------- ---------- -------------- --------------
Thomas H. Cruikshank.... 75,000 10.74% $40.25 11/3/99 $ 1,126,566 $ 2,590,175
Dale P. Jones........... 45,000 6.44% $40.25 5/18/03 $ 1,139,085 $ 2,886,666
W. Bernard Pieper....... 45,000 6.44% $40.25 11/11/00 $ 800,299 $ 1,890,640
Alan A. Baker........... 25,000 3.58% $40.25 2/2/00 $ 392,479 $ 908,475
Tommy E. Knight......... 25,000 3.58% $40.25 5/18/03 $ 632,825 $ 1,603,703
All Optionees........... 698,500 100.00% $35.06(3) (3) $ 15,401,258 $ 39,029,813
All Stockholders........ N/A N/A N/A N/A $2,515,539,630(4) $6,374,871,319(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 and Knight were calculated based on
a 10-year exercise period and values for Messrs. Cruikshank, Pieper and
Baker 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
1993. Options expire on either May 18, 2003 or December 1, 2003.
(4) "All Stockholders" values are calculated using the weighted average
exercise price for all options awarded in 1993, $35.06, based on the
outstanding shares of Common Stock on December 31, 1993.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR-END IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE (SHARES) FISCAL YEAR-END ($)
ON EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE(1) UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE
---- ----------- -------- -------------- ------------- -------------- -------------
Thomas H. Cruikshank. 0 $0 0 75,000 $0 $0
Dale P. Jones........... 0 $0 0 45,000 $0 $0
W. Bernard Pieper....... 0 $0 0 45,000 $0 $0
Alan A. Baker........... 0 $0 0 25,000 $0 $0
Tommy E. Knight......... 0 $0 0 25,000 $0 $0
- --------
(1) No options were exercisable as of December 31, 1993.
13
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. Since there were no profits, there were no Company
contributions under the Halliburton Profit Sharing Plan for the year ended
December 31, 1993. 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 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.
14
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 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 and Staubach have elected to participate in the Plan.
Directors' Restricted Stock Plan
Pursuant to the terms of the Restricted Stock Plan for Non-Employee Directors
("Directors' Restricted Stock Plan"), which was approved by the stockholders at
the 1993 Annual Meeting, each non-employee Director receives an annual award of
200 restricted shares of Common Stock as a part of his or her compensation. The
awards are in addition to the Directors' annual retainer and attendance fees
and to amounts which would be payable under the Directors' Retirement Plan,
described below. Shares awarded under the Directors' Restricted Stock Plan may
not be sold, assigned, pledged or otherwise transferred or encumbered until the
restrictions are removed. Restrictions will be removed following termination of
Board service under certain circumstances, which include, among others, death
or disability, retirement pursuant to the Company's mandatory retirement
policy, or early retirement after at least four years of service. During the
restriction period, Directors have the right to vote and to receive dividends
with respect to the restricted shares. Any shares which, pursuant to such
Plan's provisions, remain restricted following termination of service will be
forfeited.
Directors' Retirement Plan
Under the terms of the Retirement Plan for Directors of the Company
("Directors' Retirement Plan"), a non-employee director participant upon the
benefit commencement date (the later of a participant's termination date or
attainment of 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. Admission as a
participant in the Directors' Retirement Plan is on the later of the date of
completion of three years service, as defined in such Plan, or January 1, 1990.
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--17, Mr. Campbell--6, Lord Clitheroe--7, Mr. Cox--15, Mr. Crandall--9
and Mr. Williamson--13. 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 1993, Lester L. Coleman, a member of the Executive Committee, was
transferred from Houston, Texas to Dallas, Texas following his election as
Executive Vice President and General Counsel of the Company. In connection
therewith, and in accordance with Company policies, Halliburton Real Estate
15
Services, Inc., a subsidiary of the Company, purchased his Houston residence
at its fair market value of $600,000, as determined on the basis of
independent appraisals. The residence was purchased by Mr. Coleman in 1991 for
$590,000. In addition, pursuant to the Company's relocation policy for
transferred employees, the Company reimbursed Mr. Coleman for, or paid on his
behalf, expenses associated with his move to Dallas in the amount of $37,049.
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 ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange and to
furnish the Company with copies. The Form 3, as amended, filed with the U.S.
Securities and Exchange Commission ("SEC") pursuant to the election of
Scott R. Willis as Controller of the Company was not filed in a timely manner.
Mr. Knight reported in a Form 4 filed with the SEC in May 1993 that in May
1993, due to a change in transfer agents, it was discovered that 28 shares of
the Company's common stock acquired in 1976 under the Company's Career
Executive Incentive Stock Plan were issued under an incorrect spelling of his
last name and that his reported share balance should be increased by 28
shares. It was the Company's intent that its Directors' Deferred Compensation
Plan be exempt from the disclosure requirements of Section 16(a) of the
Exchange Act; however, on review of certain no action letters issued by the
SEC, counsel to the Company has now determined that certain transactions
related to the Directors' Deferred Compensation Plan should be reported.
Accordingly, Messrs. Campbell and Staubach filed Form 5's with the SEC in
February 1994 acknowledging, with respect to the Directors' Deferred
Compensation Plan, a late filing for 1992.
RATIFICATION OF THE SELECTION OF AUDITORS
(ITEM 2)
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, 1994. Such appointment
was made upon the recommendation of the Audit Committee. The Company has been
advised by Arthur Andersen & Co. that neither the firm nor any member thereof
has any direct financial interest or any material indirect interest in the
Company and, during at least the past three years, neither such firm nor any
member thereof has had any connection with the Company in the capacity of
promoter, underwriter, voting trustee, director, officer or employee.
Representatives of such firm are expected to be present at the Annual
Meeting, will have an opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions from
stockholders.
The affirmative vote of the holders of a majority of the shares of the
Company 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 & Co.,
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 & CO. AS INDEPENDENT ACCOUNTANTS TO EXAMINE THE FINANCIAL
STATEMENTS AND BOOKS AND RECORDS OF THE COMPANY FOR THE YEAR 1994.
16
SHAREHOLDER PROPOSAL RELATING TO CUMULATIVE VOTING
(ITEM 3)
The Laborers National Pension Fund, 14140 Midway Road, Suite 200--Dallas,
Texas 75244-3672, a holder of 10,000 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 the 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, 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.
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.
BOARD OF DIRECTORS RECOMMENDATION
The Board recommends a vote AGAINST this proposal for the following reasons:
Eight of the present Board members who are nominees for election to the Board
at the Annual Meeting are independent, non-employee Directors and all are
nominated for the Board upon recommendation of the Nominating Committee which
consists entirely of outside, independent Directors.
17
The Company's present system, like that of most major companies, allows all
stockholders to vote on the basis of their share ownership. The Board remains
convinced that this approach is the fairest and the one most likely to produce
an effective Board which will represent the interests of all of the Company's
stockholders. In contrast, cumulative voting is a procedure which inflates the
voting power of a stockholder so that conceivably a director could be elected
who would represent and further a special interest as opposed to taking action
for the benefit of all stockholders. Cumulative voting also introduces the
possibility of partisanship among board members that could impair their ability
to work together, a requirement essential to the effective functioning of any
board of directors. The Board is focused on successful long-term performance of
the Company and believes that the present system of electing Directors should
be retained in the best interest of all stockholders.
Approval of this stockholder proposal requires an affirmative vote of a
majority of the Company's 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 simply 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 action
by stockholders at a later meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS SHAREHOLDER PROPOSAL.
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 1994 Annual Meeting of Stockholders at a fee of $9,500 plus
reasonable expenses.
STOCKHOLDER PROPOSALS FOR THE 1995 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 1994
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, 1994 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 1995 Annual Meeting
of Stockholders will be held May 16, 1995.
18
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.
LOGO
Susan S. Keith
Vice President and Secretary
March 22, 1994
19
PROXY
HALLIBURTON COMPANY
Proxy for 1994 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 Venetian Room
of the Fairmont Hotel, 1717 N. Akard, Dallas, Texas, on Tuesday, May 17, 1994,
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 22, 1994, 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, and AGAINST Item 3.
- --------------------------------------------------------------------------------
Item 1--Election of Directors
FOR all nominees WITHHOLD AUTHORITY
(except as speci- to vote for all
fied below). nominees listed at right.
[ ] [ ] Anne L. Armstrong, R. W. Campbell, Lord
Clitheroe, R. L. Crandall, T. H.
Cruikshank, 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 1994.
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.)
Please date, sign and return this Proxy in the enclosed business
envelope.
Dated _____________________________________________________, 1994
___________________________________________________________
___________________________________________________________
(Signatures if held jointly)