KPMG LLP has examined Halliburton’s financial statements beginning with the year ended December 31, 2002. A resolution will be presented at the Annual Meeting to ratify the appointment by the Board of Directors of that firm as independent accountants to examine the financial statements and the books and records of Halliburton for the year ending December 31, 2005.2006. The appointment was made upon the recommendation of the Audit Committee. KPMG LLP has advised that neither the firm nor any member of the firm has any direct financial interest or any material indirect interest in Halliburton. Also, during at least the past three years, neither the firm nor any member of the firm has had any connection with Halliburton in the capacity of promoter, underwriter, voting trustee, Director, officer or employee.
The affirmative vote of the holders of a majority of the shares of Halliburton’s common stock represented at the Annual Meeting and entitled to vote on the matter is needed to approve the proposal.
If the stockholders do not ratify the selection of KPMG LLP, the Board of Directors will reconsider the selection of independent accountants.
PROPOSAL TO APPROVE BOARD POLICY ON FUTURE SEVERANCE AGREEMENTS
(Item 4)
The Board of Directors has unanimously approved and recommends that the stockholders consider and approve its policy on future severance agreements for executive officers of Halliburton (the “Policy”). Proxies solicited on behalf of the Board of Directors will be votedFORthis proposal unless stockholders specify a contrary choice in their proxies.
The resolution to be voted on, and the provisions of the Policy, are set forth in Appendix E to this proxy statement.
I. The Policy provides that we will not enter into a future employment agreement with severance provisions or a future severance agreement with an executive officer that provides “Benefits” (as defined in paragraph A. below) that exceed 2.99 times the executive officer’s annual base salary and bonus, unless such future agreement receives prior stockholder approval or ratification. “Severance” for purposes of the Policy means the termination of an executive officer’s employment with Halliburton. The Policy is prospective only and it will not apply to existing agreements we have with our current executive officers.
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| A. The following items are considered “Benefits” under the Policy and in the aggregate may not exceed 2.99 times an executive officer’s annual base salary and bonus as in effect at the time of his or her Severance: (i) cash amounts payable by Halliburton in the event of termination of the executive officer’s employment; and (ii) the present value of benefits or perquisites provided for periods after termination of employment (but excluding benefits or perquisites provided to employees generally). Benefits will include lump-sum payments and the estimated present value of any periodic payments made or perquisites provided following the date of termination. |
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| B. The following items are not considered “Benefits” under the Policy and are not subject to the 2.99 times limitation of the Policy: (i) payments of salary, bonus or performance award amounts that had accrued at the time of termination; (ii) payments based on accrued qualified and non-qualified deferred compensation plans, including retirement and savings benefits; (iii) any benefits or perquisites provided under plans or programs applicable to employees generally; (iv) amounts paid as part of any employment agreement intended to “make-whole” any forfeiture of benefits from a prior employer; (v) amounts paid for services following termination of employment for a reasonable consulting agreement for a period not to exceed one year; (vi) amounts paid for post-termination covenants-not-to compete or for the non-solicitation of employees of Halliburton; (vii) the value of accelerated vesting or payment of any outstanding equity-based award; and (viii) any payment that the Board determines in good faith to be a reasonable settlement of any claim made against Halliburton. The severance provisions in the employment agreements of each of the executive officers referred to in paragraph C. below provide payments of the type described in items (i), (ii), (iii), and (vii) of this paragraph B. These payments will be determined on the basis of pre-existing objective criteria, plan terms, or other non-discretionary factors, as applicable. None of the agreements of the executive officers referred to in paragraph C. provide for payments of the type described in items (iv), (v), (vi) or (viii) of this paragraph B. Any such payments may be discretionary, and the reasonableness of the payments, if any, would be determined by the Board in the exercise of its fiduciary duties and business judgment. None of the items listed in this paragraph B. are subject to the Policy, including the 2.99 times annual base salary and bonus limitation. |
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| C. Our executive officers have provisions in their existing employment agreements that entitle them to various payments upon termination of employment. Mr. Lesar’s employment agreement provides that if he is involuntarily terminated for any reason other than termination for cause (as defined in the agreement), he is entitled to receive a payment equal to the value of any restricted shares that are forfeited because of termination and five times his annual base salary. The employment agreements for Messrs. Lane, Gaut, Cornelison, and McCollum provide that if any of them are terminated for any reason other than voluntary termination (as defined in their agreements), death, retirement (either at age 65 or voluntarily prior to age 65), permanent disability, or termination by us for cause (as defined in the agreements), each of them is |
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| entitled to receive (i) the value of any restricted shares that are forfeited because of termination, (ii) two years’ base salary, (iii) any unpaid bonus earned in prior years, and (iv) any bonus payable for the year in which his employment is terminated, determined as if he had remained employed for the full year. |
II. The Board determines whether Halliburton should enter into employment or severance agreements with its executive officers. In the event that the Board determines that an employment agreement is in the best interests of Halliburton and its stockholders, we need the flexibility to make an offer of employment and enter into the agreement without delay. If the Board determines that it is in the best interests of Halliburton and its stockholders to enter into an employment or severance agreement with severance provisions that exceed the Policy, the Board will seek stockholder approval of such severance provisions in advance or within 15 months thereafter. Any agreements with severance provisions exceeding the Policy, however, will state that such severance provisions are subject to stockholder approval. In the event that stockholders do not approve the severance provisions, the agreement will provide that such provisions will be retroactively modified to the extent necessary to bring them within the limitations of the Policy.
The Board’s Policy is substantially similar to policies adopted by other companies in response to stockholder proposals to limit severance benefits paid to such companies’ executive officers.
The Board of Directors recommends that the stockholders vote to APPROVE the policy.
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STOCKHOLDER PROPOSAL ON SEVERANCE AGREEMENTS
HUMAN RIGHTS REVIEW
The Amalgamated Bank LongView Collective Investment Fund (the “Longview Fund” CHRISTUS Health (“CHRISTUS”), located at 11–15 Union Square, New York, New York 10003, has2600 North Loop West, Houston, Texas 77092; the Benedictine Sisters of Mount St. Scholastica (“Sisters”), located at 801 S. 8th Street, Atchison, Kansas 66002; and The Catholic Funds (“Funds”), located at 1100 West Wells Street, Milwaukee, Wisconsin 53233, collectively (the “Proponents”), have notified Halliburton that it intendsthey intend to present the resolution set forth below to the Annual Meeting for action by the stockholders. The Longview Fund’sTheir supporting statement for the resolution, along with the Board of Directors’ statement in opposition, is set forth below. As of December 2, 2004, the Longview FundNovember 23, 2005, CHRISTUS beneficially owned 174,3485,800 shares of Halliburton’s common stock; as of December 12, 2005, the Sisters beneficially owned 425 shares of Halliburton’s common stock; and as of December 12, 2005, the Funds beneficially owned 1,750 shares of Halliburton’s common stock. Proxies solicited on behalf of the Board of Directors will be votedAGAINSTthis proposal unless stockholders specify a contrary choice in their proxies.
Proposal
RESOLVED: The shareholders of Halliburton Co. (“Halliburton” or the “Company”) urge the Board of Directors to seek shareholder approval for future severance agreements with senior executives that provide benefits in an amount that exceeds three times the sumReport on Human Rights Policies and Implementation-Halliburton
Whereasexpectations of the executive’sglobal community are growing that companies need to have policies in place that promote and protect human rights within their areas of activity and sphere of influence, which helps promote and protect the company’s reputation as a good corporate citizen.
Halliburton is one of the world’s largest providers of products and services to the oil and gas industries and has operations globally. For example, KBR, the company’s engineering and construction subsidiary employs more than 60,000 people in 43 countries. (http://www.halliburton.com/about/index.jsp)
Many companies have adopted ethical statements that apply to employee behavior while 92 companies worldwide have adopted explicit human rights policies that address a company’s responsibility to the communities and societies where they operate. (www.business-humanrights.org, November, 2005)
In the Halliburton’s 2003 Corporate Social Responsibility report, “The Journey Continues,” it states: “For a company to be allowed to work globally, it must be able to meet society’s need for goods and services without compromising the natural or social resources of the global community. It must not only be a business leader but a good corporate citizen.”
Our company’s Code of Business Conduct does not address major corporate responsibility issues, such as, human rights. Without a human rights policy, our company faces reputational risks by operating in countries, such as China, where the rule of law is weak and human rights abuses are well documented. (Feb. 28, 2005; U.S. State Department Country Human Rights Reports 2004;http://www.state.gov/g/drl/rls/hrrpt/2004/41640.htm)
Negative publicity hurts our company’s reputation and has the potential to impact shareholder value. “Pentagon investigators have referred allegations of abuse in how the Halliburton Company was awarded a contract for work in Iraq to the Justice Department for possible criminal investigation. . .” according to a recent article in theNew York Times. (“Halliburton Case Is Referred to Justice Dept., Senator Says,” by Erik Eckholm, November 19, 2005)
We recommend our company base salary plus bonus. “Future severance agreements” include employment agreements containing severance provisions; retirement agreements; change in control agreements; and agreements renewing, modifying or extending existing such agreements. “Benefits” include securities orits human rights policies on the valueUniversal Declaration of restricted shares or other stock; lump-sum cash payments (including payments in lieu of medical and other benefits)Human Rights, the International Labor Organization’s Core Labor Standards and the estimated present valueUnited Nations Norms on the Responsibilities of periodic retirement payments, fringe benefitsTransnational Corporations and consulting fees (including reimbursable expenses)Other Business Enterprises with Regard to be paidHuman Rights, covering a range of rights, including the right to equal opportunity, security of persons, rights of workers and respect for economic, social and cultural rights. (http://www1.umn.edu/humanarts/links/commentary-Aug2003.html)
Resolved: shareholders request management to review its policies related to human rights to assess areas where the executives.company needs to adopt and implement additional policies and to report its findings, omitting propriety information and prepared at reasonable expense, by December 2006.
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Halliburton has entered in a series of severance agreements, commonly known as “golden parachutes,” that allow senior executives to receive payment if they leave We recommend the Company in certain circumstances, as specified in the contracts.review include:
The contract with CEO David J. Lesar provides that if he is involuntarily terminated for any reason other than cause, Halliburton must pay five times his base salary plus the value of any restricted shares that are forfeited because of termination.
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| 1. A risk assessment to determine the potential for human rights abuses in locations where the company operates. |
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| 2. A report on the current system in place to ensure that the company’s contractors and suppliers are implementing human rights policies in their operations, including monitoring, training and addressing issues of non-compliance. |
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| 3. The company’s strategy of engagement with internal and external stakeholders. |
The other top four executives have contracts allowing them in defined situations to recover two years’ base salary, the value of restricted shares that were forfeited because of the termination, any unpaid bonus earned in prior years, and the bonus payable for the current year had they remained employed for the full year.
The terms of these severance agreements are such that they would cost the Company over $40 million if they are ever exercised by the five most senior executives, assuming compensation at 2003 levels.
Severance agreements may be appropriate in some circumstances. Nonetheless, we believe that the potential cost of such agreements entitles shareholders to be heard when a company contemplates paying out more than three times the amount of an executive’s last salary and bonus.
The existence of such a shareholder approval requirement may induce restraint when parties negotiate such agreements.
It may not always be practical to obtain prior shareholder approval. Thus, Halliburton should have the option, in implementing this proposal, of seeking approval after the material terms of the agreement are agreed upon. Institutional investors such as the California Public Employees’ Retirement System recommend shareholder approval of these types of agreements in its proxy voting guidelines. The Council of Institutional
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Investors favors shareholder approval if the amount payable exceeds 200% of the senior executives’ annual base salary.
We urge shareholdersyou to voteFOR this proposal.
The Board of Directors recommends a vote AGAINST this proposal. Halliburton’s statement in opposition is as follows: The Board believes Halliburton is a company that this proposal, if adopted, would undermine Halliburton’s abilityoperates in over 100 countries around the world with stockholders, customers, partners, suppliers and employees that represent virtually every race or national origin and an associated multitude of religions, cultures, customs, political philosophies and languages. We must, and do, respect such diversity.
It is not our purpose as a commercial business enterprise to attract and retain highly qualified senior executives. Halliburton must haveremake the flexibility and ability to tailor and offer competitive employment packages to retain executives, as well as to motivate other valuable executives to accept employment with Halliburton. We believe adoption of this proposal would place Halliburton at a competitive disadvantage because it would arbitrarily limit Halliburton’s flexibility to design employment arrangements that would attract and retain qualified executives.
The Compensation Committee, all the members of which are independent Directors, determines whether Halliburton should enter into employment agreements with its top executive officers. All employment arrangements with the Chief Executive Officer must be recommended by the Compensation Committee, and are subject to further review and approval by the Board. In the event that the Compensation Committee determines that an employment agreement isworld in the best interestsimage of Halliburtonany particular political, legal, moral or religious philosophy with which we are comfortable. Rather, we hope to help improve the quality of life wherever we do business by serving as a developer of natural resources and its stockholders,infrastructures.
With respect to allegations of violations of human rights by governments, alleged to be illegitimate by some, we believe that decisions as to the nature of such governments and their actions are better made by governmental authorities and international entities such as the United Nations as opposed to individual persons or companies such as Halliburton. Where the United States government has mandated that United States companies refrain from commerce, we comply, often to the advantage of our international competitors. History has shown that single country boycotts, let alone corporate boycotts and sanctions, are ineffective, often injuring the economic interests of the boycotting entity.
We do not always agree with the policies or actions of governments in every place that we do business and make no excuses for their behaviors. Due to the long-term nature of our business and the inevitability of political and social change, it is neither prudent nor appropriate for Halliburton needsto establish its own country-by-country foreign policy regarding human rights.
We have long addressed many of the flexibilityissues that fall under the umbrella of human rights, such as employment practices, nondiscrimination in employment, health and safety, and security of employees and company facilities. Our support of these issues is clearly communicated in our Code of Business Conduct, which is available on our website atwww.halliburton.com/policies/business_conduct.jsp. A brief description of applicable policies within our Code of Business Conduct include the following:
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| • | Company Policy 3-0001, General Policy Regarding Laws and Business Conduct, requires employees and agents to observe high standards of business and personal ethics and to treat those that we deal with in a courteous and respectful manner. It is our policy not to discriminate against employees, stockholders, directors, customers or suppliers on account of race, color, age, sex, religion, or national origin except as may be required by applicable law. |
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| • | Company Policy 3-0002, Equal Employment Opportunity, establishes and communicates our policy on equal employment opportunity. We endeavor to create a workforce that is a reflection of the diverse population of the communities in which we operate. |
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| • | Company Policy 3-0004, Internal Accounting Controls, Procedures & Records, establishes guidelines and procedures related to keeping books and records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets. |
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| • | Company Policy 3-0005, Sensitive Transactions, establishes and communicates our position regarding sensitive transactions and requires that transactions are executed, and access to assets is permitted, only in accordance with management’s authorization. Our employees are strictly prohibited from paying any bribe, kickback or other similar unlawful payment to, or otherwise entering into a transaction with, any public official, political party or official, candidate for public office or other individual, in any country, to secure any contract, concession or other favorable treatment. |
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| • | Company Policy 3-0013, Antitrust & Competition Laws, provides guidelines for compliance with all applicable antitrust and competition laws. |
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| • | Company Policy 3-0014, Health, Safety, and Environment, establishes and communicates our policy concerning the protection of the health and safety of our employees and other persons affected by our business activities and the prevention of environmental pollution with respect to our business activities and operations. We will continuously evaluate the health, safety and environmental aspects of our products and services. |
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| • | Company Policy 3-0016, Harassment, establishes and communicates our policy prohibiting harassment, which depending on the facts and circumstances, may include verbal or written harassment, physical harassment, sexual harassment, and racial harassment. |
In addition to makethese policies in our Code of Business Conduct, we have Corporate Policy3-1573, Minimum Employment Age Requirement, which establishes our policy that we will not employ anyone, in any capacity, who is under the age of 18 years, except where this minimum employment age requirement is superseded by local law. Where local law supersedes our policy, we will not assign employees under the age of 18 to dangerous or hazardous occupations.
We believe that because we maintain and enforce these policies, it is not necessary to create an offer of employmentexplicit policy on human rights. It is our view that we treat our employees and enter into an employment agreement without delay. This flexibilityothers in the communities within which we operate in compliance with the values that would be substantially undermined byexpressed in a requirement for stockholder approval. Althoughpolicy on human rights.
Our employees around the proposal statesworld are actively involved in many activities that stockholder approval can be obtained after the material termsbenefit their local communities. Many locations have active employee volunteer councils providing assistance to a myriad of an agreementcharitable causes. Information about specific examples of these community service activities is provided on our website atwww.halliburton.com/about/community_impact.jsp. We are agreed upon, this solution is not practical. In order to attract the key executives necessary for the operation of Halliburton’s business, it cannot afford to impose this kind of condition on the approval of an employment agreement. The types of executives that Halliburton seeks are typically being pursued by other companies as well, and Halliburton could lose these individuals to competitors that do not have the stockholder approval condition. Adoptionvery proud of the proposal would require Halliburton to incur significant timepositive contribution being made by thousands of our employees in various communities where they live and expense to convene a special stockholders’ meeting for the sole purpose of voting on this type of agreement or, alternatively, to delay finalizing such agreement until after its approval at the annual stockholders’ meeting. In either case, the Board believes that Halliburton would be placed at a competitive disadvantage in attracting qualified executives who do not want to be subject to the uncertainty created by the stockholder approval provision, if this proposal was adopted.work.
The Board of Directors recommends a vote AGAINST the proposal. Proxies solicited by the Board will be voted against the proposal unless instructed otherwise.
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STOCKHOLDER PROPOSAL ON DIRECTOR ELECTION VOTE THRESHOLD
The United Brotherhood of Carpenters Pension Fund (“UBC Fund”), located at 101 Constitution Avenue, N.W., Washington, D.C. 20001, has notified Halliburton that it intends to present the resolution set forth below to the Annual Meeting for action by the stockholders. UBC Fund’s supporting statement for the resolution, along with the Board of Directors’ statement in opposition, is set forth below. As of December 2, 2004,6, 2005, the UBC Fund beneficially owned 7,200 shares of Halliburton’s common stock. Proxies solicited on behalf of the Board of Directors will be votedAGAINSTthis proposal unless stockholders specify a contrary choice in their proxies.
DirectorsDirector Election Majority Vote Standard Proposal Resolved: That the shareholders of Halliburton Company (“Company”) hereby request that the Board of Directors initiate the appropriate process to amend the Company’s governance documents (certificate of incorporation or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders.
Supporting Statement: Our Company is incorporated in Delaware. Among other issues, Delaware corporate law addresses the issue of the level of voting support necessary for a specific action, such as the election of corporate directors. Delaware law provides that a company’s certificate of incorporation or bylaws may specify the number of votes that shall be necessary for the transaction of any business, including the election of directors. (DGCL, Title 8, Chapter 1, Subchapter VII, Section 216). Further, theThe law provides that if the level of voting support necessary for a specific action is not specified in thea corporation’s certificate of incorporation or bylaws, of the corporation, directors “shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.”
Our Company presently uses the plurality vote standard forto elect directors. This proposal requests that the election of directors. We feel that it is appropriate and timely for the Board to initiate a change in the Company’s director election vote standard. Specifically, this shareholder proposal urges that the Board of Directors initiate a change to the director election vote standard to provide that in director elections a majority vote standard will be used in lieu of the Company’s current plurality vote standard. Specifically, the new standard should provide that nominees for the board of directors must receive a majority of the vote cast in order to be elected or re-elected to the Board.
We believe that a majority vote standard in director elections would give shareholders a meaningful role in the director election process. Under the Company’s current plurality vote standard, a director nominee in a director election can be elected or re-elected with as little as a single affirmative vote, even whileif a substantial majority of the votes cast are “withheld” from that director nominee. So even if 99.99% of the shares “withhold” authority to vote for a candidate or all the candidates, a 0.01% “for” vote results in the candidates election or re-election to the board. The proposed majority vote standard would require that a director receive a majority of the vote cast in order to be elected to the Board.
It is our contention that the proposedThe majority vote proposal received high levels of support last year, winning majority support at Advanced Micro Devices, Freeport McMoRan, Marathon Oil, March & McLennan, Office Depot, Raytheon, and others. Leading proxy advisory firms recommend voting in favor of the proposal.
Some companies have adopted board governance policies requiring director nominees that fail to receive majority support from shareholders to tender their resignations to the board. We believe that these policies are inadequate for they are based on continued use of the plurality standard for corporate board electionsand would allow director nominees to be elected despite only minimal shareholder support. We contend that changing the legal standard to a majority vote is a fair standardsuperior solution that will strengthen the Company’s governance and the Board. merits shareholder support.
Our proposal is not intended to limit the judgment of the Board in crafting the requested governance change. For instance, the Board should address the status of incumbent directorsdirector nominees who fail to receive a majority vote when standing for re-election under a majority vote standard orand whether a plurality director electionvote standard ismay be appropriate in contested elections.director elections when the number of director nominees exceeds the available board seats.
We urge your support offor this important director election reform.
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The Board of Directors recommends a vote AGAINST this proposal. Halliburton’s statement in opposition is as follows: This proposal is the same proposal presented to our stockholders at the 2005 Annual Meeting, which our stockholders defeated. While the Board is aware that the majority vote standard for election of directors is the subject of much interest and debate, we believe that it is premature for Halliburton to adopt a majority vote standard at this time.
On January 17, 2006, the Committee on Corporate Laws of the Section of Business Law (the “Committee”) of the American Bar Association released its Preliminary Report on Director Voting (the “Preliminary Report”). The numberPreliminary Report is focused on the Model Business Corporation Act (the “Model Act”). The Model Act, like Delaware law, which is the law applicable to Halliburton, both have a “holdover” rule provision (Model Act Section 8.05(e); Delaware General Corporation Law (“DGCL”) Section 141(b)). The effect of director positions to fill each yearthe holdover rule is based uponthat directors remain in office until their successors are elected and qualify. As the Nominating and Corporate Governance Committee’s andPreliminary Report points out beginning on page 15, “If the Board’s determinations asholdover rule were retained in its present form, a majority default rule would represent only a symbolic change to the numberplurality voting system because directors who are not elected would nevertheless remain in office until a successor is elected and qualified.” The Preliminary Report further states at page 25 that “. . . the proposed amendments to the Model Act are in one sense more enabling than the Delaware law provisions, because the DGCL does not expressly permit corporations to alter the holdover rule provided in section 141(b) of Directors necessarythe DGCL.”
The proposal refers to staff the Board’s committees andefforts by some companies to address the Board’s workload. The requirement ofmajority voting issue by adopting governance policies requiring director nominees that fail to receive majority support from shareholders to tender their resignation to the board. As indicated in the proposal, the proponent finds that these policies are inadequate.
While conceptually a majority vote for election of a director could put the Board in the position of having an insufficient number of members to carry out the Board’s work.
The third paragraph of the Supporting Statement provides an illustration that a board nominee could be elected by a plurality of the vote despite the fact that 99.99% of the votes cast withheld support for that nominee’s election to the board. This illustration is not necessarily true and is misleading. It assumes, but does not state, that the number of nominees is equal to the number of directors to be elected. The reference in the Supporting Statement to “strengthen the Company’s governance” is misleading, especially when combined with the 99.99% withhold vote illustration. For the past three years, the largest withhold vote received by any Halliburton Board-nominated Director was 15%. For last year’s annual meeting, the UBC Fund submitted a similar proposal, but its vote illustration indicated that a director could be elected by plurality voting with a 90% withhold vote, as compared to this year’s example of a 99.99% withhold vote. At last year’s annual meeting, which involved each of the incumbent Directors, the largest withhold vote received was approximately 6%. The Proposal suggests that Directors for Halliburton’s Board are being elected by minimal affirmative votes and that change is in order. That clearly is not the case for Halliburton, and changing the illustration to exaggerate a hypothetical vote result does not change the facts that Halliburton’s Directors have a broad base of stockholder support.
While conceptually the requirement of a majority votestandard is simple, it does raise issues. The Securities and Exchange Commission issued proposed rules on stockholder access to the proxy (Security Holder Director Nominations, Release No. 34-48626), and one of the questions raised by the SECmany issues as described in the proposedPreliminary Report, among them, the holdover rule, after statingfailed elections, and the enforceability of director resignations policies. As the Preliminary Report points out, there is a real likelihood that most companies use plurality votingthe holdover rule would render a majority vote requirement illusory, because the director not receiving a majority vote would remain in office notwithstanding the election ofvote.
The required vote to elect directors is what specific issues arise where other than plurality voting is used.
clearly an important governance issue. The Board of Directors is of the view that election of Directors of Halliburton by plurality voting which is the norm in the United States, is appropriate anduntil the statutory or case law evolves so that no changethere is certainty as to the Halliburton By-law provision providing for electionoutcome of Directors byelections under a pluralitymajority vote is necessary.standard.
The Board of Directors recommends a vote AGAINST the proposal. Proxies solicited by the Board will be voted against the proposal unless instructed otherwise.
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STOCKHOLDER PROPOSAL ON POISON PILL
(Item 7)
Lucian Bebchuk, located at 1545 Mass. Ave., Cambridge, Massachusetts 02138, has notified Halliburton that he intends to present the resolution set forth below to the Annual Meeting for action by the stockholders. Mr. Bebchuk’s supporting statement for the resolution, along with the Board of Directors’ statement in opposition, is set forth below. As of December 1, 2005, Mr. Bebchuk beneficially owned 125 shares of Halliburton’s common stock. Proxies solicited on behalf of the Board of Directors will be votedAGAINST this proposal unless stockholders specify a contrary choice in their proxies.
Proposal
It is hereby RESOLVED that pursuant to Section 109 of the Delaware General Corporation Law, 8 Del. C. § 109, andBy-law No. 44, the Company’s By-laws are hereby amended by adding a new By-law No. 18 (and renumbering existingBy-law No. 18 and each subsequent By-law to reflect the addition of newBy-Law No. 18) as follows:
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| Notwithstanding anything in these By-laws to the contrary, the adoption of any stockholder rights plan, rights agreement or any other form of “poison pill” which is designed to or has the effect of making acquisition of large holdings of the Corporation’s shares of stock more difficult or expensive (“Stockholder Rights Plan”) or the amendment of any such Stockholder Rights Plan which has the effect of extending the term of any rights or options provided thereunder, shall require the affirmative vote of two-thirds of the Board of Directors, and any Stockholder Rights Plan so adopted or amended shall expire no later than three years following the later of the date of its adoption and the date of its last such amendment. |
This By-law shall be effective immediately and automatically as of the date it is approved by the vote of stockholder in accordance with By-law No. 44.
Supporting Statement
I believe that poison pills can deny stockholders the ability to make their own decisions regarding whether or not to accept a premium acquisition offer for their stock and, under certain circumstances, can reduce shareholder value. Additionally, events, circumstances and considerations that could make it desirable to adopt or maintain a poison pill might change over time. Therefore, I believe that the decision to adopt or to extend a poison pill should require the affirmative vote of two-thirds of the directors to pass, and that a poison pill should not remain in place indefinitely without the Board’s determination that it continues to be advisable for the Company to retain the poison pill. The proposed amendment to the Company’s By-laws would not prevent the Board from adopting or maintaining a poison pill for as long as necessary consistent with the Board’s exercise of its fiduciary duties, but would simply ensure that the Board not do so without substantial director support and without considering at least every three years whether continuing to maintain such a plan is in the best interests of the Company and its stockholders.
I urge you to vote “yes” to support the adoption of this proposal.
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The Board of Directors recommends a vote AGAINST this proposal. Halliburton’s statement in opposition is as follows:
Our stockholders rights plan terminated pursuant to the provisions of the plan on December 15, 2005. We do not currently have a stockholder rights plan in place. In anticipation of the expiration of the former plan, on September 8, 2005, the Halliburton Board adopted a policy on stockholder rights plans to be effective on December 16, 2005. The policy, which was filed on Form 8-K with the Securities and Exchange Commission on December 19, 2005, is as follows:
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| Adoption of Policy Statement Regarding Stockholder Rights Plans | |
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| RESOLVED, that the Board deems it desirable and in the best interests of the Company and its stockholders to adopt, and the Board hereby approves and adopts, the following policy effective December 16, 2005: | |
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| “The Company does not have a “poison pill” or stockholder rights plan. | |
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| If the Company were to adopt a stockholder rights plan, the Board would seek prior stockholder approval of the plan unless, due to timing constraints or other reasons, a majority of independent directors of the Board determines that it would be in the best interests of stockholders for the Board to adopt a plan before obtaining stockholder approval. | |
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| If a stockholder rights plan is adopted without prior stockholder approval, the plan must either be ratified by stockholders or must expire, without being renewed or replaced, within one year. | |
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| The Nominating and Corporate Governance Committee shall review this policy statement periodically and report to the Board on any recommendations it may have concerning the policy.” | |
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| The policy requires the Board to seek stockholder approval prior to adopting a rights plan, unless the Board in exercising its fiduciary duty determines that it is in the best interests of stockholders to adopt a plan prior to obtaining stockholder approval, in which event the adopted plan must either expire or be ratified by the stockholders within one year. |
The Board believes that the policy it adopted is sufficient and that adopting a further policy requiring that two-thirds of the Directors approve adoption of a stockholder rights plan is unnecessary.
The Board of Directors recommends a vote AGAINST the proposal. Proxies solicited by the Board will be voted against the proposal unless instructed otherwise.
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Advance Notice Procedures Under our By-laws, no business may be brought before an Annual Meeting unless it is specified in the notice of the Meeting or is otherwise brought before the Meeting by or at the direction of the Board or by a stockholder entitled to vote who has delivered notice to Halliburton (containing the information specified in the By-laws) not less than ninety (90) days prior to the first anniversary of the preceding year’s Annual Meeting. These requirements are separate from and in addition to the SEC’s requirements that a stockholder must meet in order to have a stockholder proposal included in Halliburton’s proxy statement. This advance notice requirement does not preclude discussion by any stockholder of any business properly brought before the Annual Meeting in accordance with these procedures.
The proxies accompanying this proxy statement are being solicited by Halliburton. The cost of soliciting proxies will be borne by Halliburton. We have retained Georgeson Shareholder Communications Inc. to aid in the solicitation of proxies. For these services, we will pay Georgeson a fee of $12,500.00$12,500 and reimburse it for out-of-pocketout-of-pocket disbursements and expenses. Officers and regular employees of Halliburton may solicit proxies personally, by telephone or other telecommunications with some stockholders if proxies are not received promptly. We will, upon request, reimburse banks, brokers and others for their reasonable expenses in forwarding proxies and proxy material to beneficial owners of Halliburton’s stock.
Stockholder Proposals for the 20062007 Annual Meeting Stockholders interested in submitting a proposal for inclusion in the proxy materials for the Annual Meeting of Stockholders in 20062007 may do so by following the procedures prescribed in SEC Rule 14a-8. To be eligible for inclusion, stockholder proposals must be received by Halliburton’s Senior Vice President and Secretary at 5 Houston Center, 1401 McKinney Street, Suite 2400, Houston, Texas 77010, no later than December 2, 2005.25, 2006. The 20062007 Annual Meeting will be held on May 17, 2006.16, 2007.
As of the date of this proxy statement, we know of no business that will be presented for consideration at the Annual Meeting other than the matters described in this proxy statement. If any other matters should properly come before the Meeting for action by stockholders, it is intended that proxies in the accompanying form will be voted on those matters in accordance with the judgment of the person or persons voting the proxies.
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| By Authority of the Board of Directors, |
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| |
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| Margaret E. Carriere |
| Senior Vice President and Secretary |
April 18, 2006
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By Authority of the Board of Directors,
MARGARET E. CARRIERE
Vice President and SecretaryMarch 22, 2005
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Appendix A
CORPORATE GOVERNANCE GUIDELINESGuidelines on Governance
Revised as of February 16,December 7, 2005 The Board of Directors believes that the primary responsibility of the Directors is to provide effective governance over Halliburton’s affairs for the benefit of its stockholders. That responsibility includes:
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| • | Evaluating the performance of the Chief Executive Officer and taking appropriate action, including removal, when warranted; |
| • | Fixing the Chief Executive Officer’s compensation for the next year based upon a recommendation from the Compensation Committee; |
| • | Selecting, evaluating and fixing the compensation of executive management of Halliburton and establishing policies regarding the compensation of other members of management; |
| • | Reviewing succession plans and management development programs for members of executive management; |
| • | Reviewing and approving periodically long-term strategic and business plans and monitoring corporate performance against such plans; |
| • | Adopting policies of corporate conduct, including compliance with applicable laws and regulations and maintenance of accounting, financial, disclosure and other controls, and reviewing the adequacy of compliance systems and controls; |
| • | Evaluating annually the overall effectiveness of the Board; and |
| • | Reviewing matters of corporate governance. |
The Board has adopted these Guidelines to assist it in the exercise of its responsibilities. These Guidelines are reviewed periodically and revised as appropriate to reflect the dynamic and evolving processes relating to the operation of the Board.
Operation of the Board — Meetings 1. Chairman of the Board and Chief Executive Officer. The Board believes that, under normal circumstances, the Chief Executive Officer of Halliburton should also serve as the Chairman of the Board. The Chairman of the Board and Chief Executive Officer is responsible to the Board for the overall management and functioning of Halliburton.
2. Lead DirectorDirector.. The Chairman of the Management Oversight Committee, which is composed of all outside Directors, is Halliburton’s Lead Director. The Lead Director is elected by and from the outside Directors.
3. Executive Sessions of Outside Directors. During each regular Board meeting, the outside Directors meet in scheduled executive sessions. Further, the Management Oversight Committee is composed of all of the outside Directors and meets in executive session during a portion of each of its five regular meetings per year. In addition, any member of the Management Oversight Committee may request the Committee Chairman to call an executive session of the Committee at any time.
Each December, the Management Oversight Committee meets in executive session to evaluate the performance of the Chief Executive Officer. In evaluating the Chief Executive Officer, the Committee takes into consideration the executive’s performance in both qualitative and quantitative areas, including:
• | | |
| • | leadership and vision; |
• | • | keeping the Board informed on matters affecting Halliburton and its operating units; |
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• | | |
| • | performance of the business (including such measurements as total stockholder return and achievement of financial objectives and goals); |
• | • | development and implementation of initiatives to provide long-term economic benefit to Halliburton; |
• | • | accomplishment of strategic objectives; and |
• | • | development of management. |
The evaluation will be communicated to the Chief Executive Officer by the Chairman of the Management Oversight Committee and will be usedreviewed by the Compensation Committee in the course of its deliberations when consideringbefore it provides a recommendation to the full Board of Directors for the Chief Executive Officer’s compensation for the ensuingnext year.
4. Attendance of Non-Directors at Board Meetings. The Chief Financial Officer and the General Counsel will be present during Board meetings, except where there is a specific reason for one or both of them to be excluded. In addition, the Chairman of the Board may invite one or more members of management to be in regular attendance at Board meetings and may include other officers and employees from time to time as appropriate to the circumstances.
5. Frequency of Board Meetings. The Board has five regularly scheduled meetings per year. Special meetings are called as necessary. It is the responsibility of the Directors to attend the meetings.
6. Board Access to Management. Directors have open access to Halliburton’s management, subject to reasonable time constraints. In addition, members of Halliburton’s executive management routinely attend
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Board and Committee meetings and they and other managers frequently brief the Board and the Committees on particular topics. The Board encourages executive management to bring managers into Board or Committee meetings and other scheduled events who (a) can provide additional insight into matters being considered or (b) represent managers with future potential whom executive management believe should be given exposure to the members of the Board.
7. Board Access to Independent AdvisorsAdvisors.. The Board has the authority to retain, set terms of engagement and dismiss such independent advisors, including legal counsel or other experts, as it deems appropriate, and to approve the fees and expenses of such advisors.
8. Long-term PlansPlans.. Long-term strategic and business plans will be reviewed annually at one of the Board’s regularly scheduled meetings.
9. Selection of Agenda Items for Board Meetings. The Chairman of the Board and Chief Executive Officer prepares a draft agenda for each Board meeting and the agenda and meeting schedule are submitted to the Lead Director for approval. The other Board members are free to suggest items for inclusion on the agenda and each Director is free to raise at any Board meeting subjects that are not on the agenda.
10. Board/Committee Forward Agenda. A forward agenda of matters requiring recurring and focused attention by the Board and each Committee will be prepared and distributed prior to the beginning of each calendar year in order to ensure that all required actions are taken in a timely manner and are given adequate consideration.
11. Information Flow; Advance Review of Meeting Materials. In advance of each Board or Committee meeting, a proposed agenda will be distributed to each Director. In addition, to the extent feasible or appropriate, information and data important to the Directors’ understanding of the matters to be considered, including background summaries and presentations to be made at the meeting, will be distributed in advance of the meeting. Information distributed to the Directors is approved by the Lead Director. Directors also routinely receive monthly financial statements, earnings reports, press releases, analyst reports and other information designed to keep them informed of the material aspects of Halliburton’s business, performance and prospects. It is each Director’s responsibility to review the meeting materials and other information provided by Halliburton.
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1. Two-thirds of the Members of the Board Must Be Independent Directors. The Board believes that as a matter of policy two-thirds of the members of the Board should be independent Directors. In order to be independent, a Director cannot have a material relationship with Halliburton. A Director will be considered independent if he or she:
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• | has not been employed by Halliburton or its affiliate in the preceding three years and no member of the Director’s immediate family has been employed as an executive officer of Halliburton or its affiliate in the preceding three years; |
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• | | has not received, and does not have an immediate family member that has received for service as an executive officer of Halliburton, within the preceding three years, during any twelve-month period, more than $100,000 in direct compensation from Halliburton, other than director’s fees, committee fees or pension or deferred compensation for prior service; |
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• | | is not (A) a current partner of Halliburton’s independent auditor, (B) is not a current employee of Halliburton’s independent auditor and (C) was not during the past three calendar years a partner or employee of Halliburton’s independent auditor and personally worked on Halliburton’s audit; |
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• | | does not have an immediate family member who (A) is a current partner of Halliburton’s independent auditor, (B) is a current employee of Halliburton’s independent auditor who participates in that firm’s |
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| | audit, assurance or tax compliance (but not tax planning) practice and (C) was during the past three calendar years, a partner or employee of Halliburton’s independent auditor and personally worked on Halliburton’s audit; |
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• | | has not been an employee of a customer or supplier of Halliburton or its affiliates and does not have an immediate family member who is an executive officer of such customer or supplier that makes payments to, or receives payments from, Halliburton or its affiliates in an amount which exceeds the greater of $1 million or 2% of such customer’s or supplier’s consolidated gross revenues within any of the preceding three years; |
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• | | has not been within the preceding three years part of an interlocking directorate in which the Chief Executive Officer or another executive officer of Halliburton serves on the compensation committee of another corporation that employs the Director, or an immediate family member of the Director, as an executive officer. |
The definition of independence and compliance with this policy will be reviewed periodically by the Nominating and Corporate Governance Committee. All Directors complete independence questionnaires at least annually and the Board makes determinations of the independence of its members.
The Board believes that employee Directors should number not more than 2. While this number is not an absolute limitation, other than the Chief Executive Officer, who should at all times be a member of the Board, employee Directors should be limited only to those officers whose positions or potential make it appropriate for them to sit on the Board.
2. Size of the Board. The Board believes that, optimally, the Board should number between 10 and 14 members. The By-laws prescribe that the number of Directors will not be less than 8 nor more than 20.
3. Service of Former Chief Executive Officers and Other Former Employees on the Board. Employee Directors shall retire from the Board at the time of their retirement as an employee unless continued service as a Director is requested and approved by the Board.
4. Annual Election of All Directors. As provided in Halliburton’s By-laws, all Directors are elected annually. Should a Director’s principal title change during the year, he or she must submit a letter of Board resignation to the Chairman of the Nominating and Corporate Governance Committee who, with the full Committee, shall have the discretion to accept or reject the letter.
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5. Board Membership Criteria. Candidates nominated for election or reelection to the Board of Directors should possess the following qualifications:
Personal characteristics:
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| Personal characteristics: |
• | | highest personal and professional ethics, integrity and values; |
• |
| • | an inquiring and independent mind; and |
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| • | practical wisdom and mature judgment. |
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| • | Broad training and experience at the policy-making level in business, government, education or technology. |
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| • | Expertise that is useful to Halliburton and complementary to the background and experience of other Board members, so that an optimum balance of members on the Board can be achieved and maintained. |
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| • | Willingness to devote the required amount of time to carrying out the duties and responsibilities of Board membership. |
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| • | Commitment to serve on the Board for several years to develop knowledge about Halliburton’s principal operations. |
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| • | Willingness to represent the best interests of all stockholders and objectively appraise management performance. |
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| • | Involvement only in activities or interests that do not create a conflict with the Director’s responsibilities to Halliburton and its stockholders. |
The Nominating and Corporate Governance Committee is responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the needs of the Board at a given point in time and shall periodically review and update the criteria as deemed necessary. Diversity in personal background, race, gender, age and nationality for the Board as a whole may be taken into account in considering individual candidates.
6 6. . Process for the Selection of new Directors. The Board is responsible for filling vacancies on the Board that may occur between annual meetings of stockholders. The Board has delegated to the Nominating and Corporate Governance Committee the duty of selecting and recommending prospective nominees to the Board for approval. The Nominating and Corporate Governance Committee considers suggestions of candidates for Board membership made by current Committee and Board members, Halliburton management, and stockholders. The Committee may retain an independent executive search firm to identify candidates for consideration. A stockholder who wishes to recommend a prospective candidate should notify Halliburton’s Corporate Secretary, as described in our proxy statement. The Nominating and Corporate Governance Committee also considers whether to nominate persons put forward by stockholders pursuant to Halliburton’s by-lawsBy-laws relating to stockholder nominations.
When the Nominating and Corporate Governance Committee identifies a prospective candidate, the Committee determines whether it will carry out a full evaluation of the candidate. This determination is based on the information provided to the Committee by the person recommending the prospective candidate, and the Committee’s knowledge of the candidate. This information may be supplemented by inquiries to the person who made the recommendation or to others. The preliminary determination is based on the need for additional Board members to fill vacancies or to expand the size of the Board, and the likelihood that the candidate will meet the Board membership criteria listed in item 5 above. The Committee will determine, after discussion with the Chairman of the Board and other Board members, whether a candidate should continue to be considered as a potential nominee. If a candidate warrants additional consideration, the Committee may request an independent executive search firm to gather additional information about the candidate’s background, experience and reputation,
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and to report its findings to the Committee. The Committee then evaluates the candidate and determines whether to interview the candidate. Such an interview would be carried out by one or more members of the Committee and others as appropriate. Once the evaluation and interview are completed, the Committee recommends to the Board of Directors which candidates should be nominated. The Board makes a determination of nominees after review of the recommendation and the Committee’s report.
7. Director Tenure. The Nominating and Corporate Governance Committee, in consultation with the Chief Executive Officer, will review each Director’s continuation on the Board annually in making its recommendation to the Board concerning his or her nomination for election or reelection as a Director. There are no term limits on Directors’ service, other than mandatory retirement.
8. Director RetirementRetirement.. It is the policy of the Board that each outside Director shall retire from the Board immediately prior to the annual meeting of stockholders following his or her seventy-second birthday. Employee Directors shall retire at the time of their retirement from employment with Halliburton unless continued service as a Director is approved by the Board.
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9. Director Compensation Review. It is appropriate for executive management of Halliburton to report periodically to the Nominating and Corporate Governance Committee on the status of Halliburton’s Director compensation practices in relation to other companies of comparable size and Halliburton’s competitors.
10. ChangesChanges.. Changes in Director compensation, if any, should come upon the recommendation of the Nominating and Corporate Governance Committee, but with full discussion and concurrence by the Board.
11. General Principles for Determining Form and Amount of Director Compensation. The Nominating and Corporate Governance Committee annually reviews the competitiveness of Halliburton’s Director compensation practices. In doing so, the Committee compares Halliburton’s practices with those of its comparator group, which includes both peer and general industry companies. Specific components reviewed include: cash compensation, equity compensation, benefits and perquisites. Information is gathered directly from published proxy statements of comparator group companies. Additionally, the Committee utilizes external market data gathered from a variety of survey sources to serve as a reference point against a broader group of companies. Determinations as to the form and amount of Director compensation are based on Halliburton’s competitive position resulting from this review.
12. Conflicts of Interest. If an actual or potential conflict of interest develops because of significant dealings or competition between Halliburton and a business with which the Director is affiliated, the Director should report the matter immediately to the Chairman of the Board for evaluation by the Board. A significant conflict must be resolved or the Director should resign.
If a Director has a personal interest in a matter before the Board, the Director shall disclose the interest to the full Board and excuse himself or herself from participation in the discussion and shall not vote on the matter.
13. Board Attendance at Annual MeetingMeeting.. It is the policy of the Board that all Directors attend the Annual Meeting of Stockholders and Halliburton’s annual proxy statement shall state the number of Directors who attended the prior year’s Annual Meeting.
1. Number and Types of Committees. A substantial portion of the analysis and work of the Board is done by standing Board Committees. A Director is expected to participate actively in the meetings of each Committee to which he or she is appointed.
The Board has established the following standing Committees: Audit; Compensation; Health, Safety and Environment; Management Oversight; and Nominating and Corporate Governance. Each Committee’s charter is to be reviewed periodically by the Committee and the Board.
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2. Composition of Committees. It is the policy of the Board that only outside Directors serve on Board Committees. Further, only independent Directors serve on the Audit; Compensation; and the Nominating and Corporate Governance Committees.
A Director who is part of an interlocking directorate (i.e., one in which the Chief Executive Officer or another Halliburton executive officer serves on the board of another corporation that employs the Director) may not serve on the Compensation Committee. The composition of the Board Committees will be reviewed annually to ensure that each of its members meet the criteria set forth in applicable SEC, NYSE and IRS rules and regulations.
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3. Assignment and Rotation of Committee Members. The Nominating and Corporate Governance Committee, with direct input from the Chief Executive Officer, recommends annually to the Board the membership of the various Committees and their Chairmen and the Board approves the Committee assignments. In making its recommendations to the Board, the Committee takes into consideration the need for continuity; subject matter expertise; applicable SEC, IRS or NYSE requirements; tenure; and the desires of individual Board members.
4. Frequency and Length of Committee Meetings. Each Committee shall meet as frequently and for such length of time as may be required to carry out its assigned duties and responsibilities. The schedule for regular meetings of the Board and Committees for each year is submitted and approved by the Board in advance. In addition, the Chairman of a Committee may call a special meeting at any time if deemed advisable.
5. Committee Agendas; Reports to the Board. Members of management and staff will prepare draft agenda and related background information for each Committee meeting which, to the extent desired by the relevant Committee Chairman, will be reviewed and approved by the Committee Chairman in advance of distribution to the other members of the Committee. A forward agenda of recurring topics to be discussed during the year will be prepared for each Committee and furnished to all Directors. Each Committee member is free to suggest items for inclusion on the agenda and to raise at any Committee meeting subjects that are not on the agenda for that meeting.
Reports on each Committee meeting (other than Management Oversight Committee meetings) are made to the full Board. All Directors are furnished copies of each Committee’s minutes.
1. Director Orientation and Continuing Education. An orientation program has been developed for new Directors which includes comprehensive information about Halliburton’s business and operations; general information about the Board and its Committees, including a summary of Director compensation and benefits; and a review of Director duties and responsibilities. Halliburton provides continuing education courses several times per year on business unit product and service line operations.
2. Board Interaction with Institutional Investors and Other Stakeholders. The Board believes that it is executive management’s responsibility to speak for Halliburton. Individual Board members may, from time to time, meet or otherwise communicate with outside constituencies that are involved with Halliburton. In those instances, however, it is expected that Directors will do so only with the knowledge of executive management and, absent unusual circumstances, only at the request of executive management.
3. Stockholder Communications with DirectorsDirectors.. To foster better communication with Halliburton’s stockholders, Halliburton established a process for stockholders to communicate with the Audit Committee and the Board of Directors. The process has been approved by both the Audit Committee and the Board, and meets the requirements of the NYSE, and the SEC. The methods of communication with the Board include mail (Board of Directors c/o Director of Business Conduct, Halliburton Company, 1401 McKinney Street, Suite 1400, Houston, Texas 77010, USA), a dedicated telephone number (888-312-2692 or 770-613-6348) and ane-mail address. address (BoardofDirectors@halliburton.com). Information regarding these methods of communication is also on Halliburton’s website,www.halliburton.com,, under “Corporate Governance”.
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Halliburton’s Director of Business Conduct, a Company employee, reviews all stockholder communications directed to the Audit Committee and the Board of Directors. The Chairman of the Audit Committee is promptly notified of any significant communication involving accounting, internal accounting controls, or auditing matters. The Chairman of the Management Oversight Committee is promptly notified of any other significant stockholder communications and communications addressed to a named Director is promptly sent to the Director. A report summarizing all communications is sent to each Director quarterly and copies of communications are available for review by any Director.
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4. Periodic Review of These Guidelines. The operation of the Board of Directors is a dynamic and evolving process. Accordingly, these Guidelines will be reviewed periodically by the Nominating and Corporate Governance Committee and any recommended revisions will be submitted to the full Board for consideration.
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| Approved as revised: Halliburton Company Board of Directors |
| December 7, 2005 |
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| Supersedes previous version dated |
| February 16, 2005 |
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Appendix B
COMPENSATION COMMITTEE CHARTER
I. ROLE
The role of the Compensation Committee is to establish and oversee the compensation policies and practices of Halliburton Company on behalf of its Board of Directors. It is the Committee’s responsibility to review, monitor, approve and recommend, as applicable, compensation policies, plans and actions, and make appropriate reports to the Board of Directors. The primary purpose of the Committee is to ensure that the Company’s compensation program is effective in attracting, retaining and motivating key employees, that it reinforces business strategies and objectives consistent with the Company’s goals and that it is administered in a fair and equitable manner consistent with established policies and guidelines.
II. COMMITTEE ORGANIZATION AND OPERATIONS
Member Appointments, Qualifications, and Removals. The Compensation Committee shall consist entirely of at least three independent, non-employee Directors. Committee members shall be appointed by the full Board of Directors
February 16, 2005 for a one-year term beginning immediately following the Annual Meeting of Stockholders each year. A Chairperson shall be designated by the Board from among the members appointed. Committee members shall be chosen based on their competence and ability to add substance to the deliberations of the Committee. Members of the Committee shall have no relationship to the Company that could interfere with the exercise of their independence from management and the Company. At the discretion of the Board, any member may be removed during the one year term for any reason, including loss of member independence. The composition of the Committee shall be reviewed annually to ensure that each of its members meet the criteria set forth in applicable Securities and Exchange Commission, New York Stock Exchange and Internal Revenue Service rules and regulations.
Compensation Committee members shall devote sufficient attention to their duties to enable them to fully understand the environment in which the Company’s compensation program operates as well as to understand and apply principles of competitive compensation practice.
Committee Reports. The Chair of the Committee will report regularly to the full Board of Directors on the Committee’s activities and decisions including, but not limited to, the results of the Committee’s self-evaluation and any recommended changes to the Committee’s Charter.
Meeting Structure. The Committee shall meet a minimum of four times per year. The Secretary of the Company shall be the Secretary of the Board Compensation Committee unless the Committee designates otherwise. In the absence of the Chair during any Committee meeting, the Committee may designate a Chair pro tempore. The Committee shall act only on the affirmative vote of a majority of the members at a meeting or by unanimous written consent.
Subcommittees. The Committee may establish subcommittees consisting of one or more members to carry out such duties as the Committee may assign. Such subcommittees must establish and publish a separate Charter.
III. RESPONSIBILITIES
The Compensation Committee shall be generally responsible for the Company’s overall compensation philosophy and objectives, and specifically responsible for reviewing, approving and monitoring compensation strategies, plan design, guidelines and practices as they relate to senior management.
Supersedes previous version dated
May 5, 2004
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The Compensation Committee shall be responsible for 1) specifically reviewing and approving compensation for specified officers as provided in Halliburton Company Policy 3-9002 (or any successor policy) and 2) generally reviewing and monitoring compensation for other employees, both as agreed by the Compensation Committee at the start of each year. The scope of the Committee’s authority includes, among other things, the following responsibilities:
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| 1. | Developing and approving an overall executive compensation philosophy, strategy and framework consistent with corporate objectives and stockholder interests. |
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| 2. | Producing an annual report on executive compensation as required by the SEC for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations. |
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| 3. | Reviewing the evaluation of the Chief Executive Officer’s (CEO’s) performance by the Management Oversight Committee and then, based upon such evaluation, making a recommendation to the independent members of the Board of Directors regarding the CEO’s compensation for the next year. |
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| 4. | Specifically reviewing and approving all actions relating to compensation, promotion and employment-related arrangements (including severance arrangements) for specified officers of the Company, its subsidiaries and affiliates. |
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| 5. | Establishing annual performance criteria and reward schedules under the Company’s Annual Performance Pay Plan (or any other similar or successor plans) and certifying the performance level achieved and reward payments at the end of each plan year. |
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| 6. | Establishing performance criteria and award schedules under the Company’s Performance Unit Program (or any other similar or successor plans) and certifying the performance level achieved and award payments at the end of each performance cycle. |
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| 7. | Approving any other incentive or bonus plans applicable to specified officers of the Company, its subsidiaries and affiliates. |
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| 8. | Administering awards under the Company’s 1993 Stock and Incentive Plan and Supplemental Executive Discretionary Retirement Plan (or any other similar or successor plans). |
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| 9. | Selecting an appropriate peer group or peer groups against which the Company’s total executive compensation program is measured. |
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| 10. | Reviewing and approving or recommending to the Board of Directors, as appropriate, major changes to, and taking administrative actions associated with, any other forms of non-salary compensation under its purview. |
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| 11. | Reviewing and approving the stock allocation budget among all employee groups of the Company, its subsidiaries and affiliates. |
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| 12. | Monitoring and reviewing periodically overall compensation program design and practice to ensure continued competitiveness, appropriateness and alignment with established philosophies, strategies and guidelines. |
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| 13. | Reviewing and approving appointments to the Administrative Committee which oversees the day-to-day administration of certain non-qualified executive compensation plans. |
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| 14. | Retaining persons having special competence (including consultants and other third-party service providers) as necessary to assist the Committee in fulfilling its responsibilities and maintaining the |
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| | sole authority to retain and terminate these persons, including the authority to approve fees and other retention terms. |
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| 15. | Performing such other duties and functions as the Board of Directors may from time to time delegate. |
IV. COMMITTEE EVALUATION AND CHARTER REVIEW
The Committee will annually complete an evaluation of its performance and effectiveness and will annually review the Committee’s Charter.
V. RESOURCES AND AUTHORITY OF THE COMMITTEE
The Committee has the authority to retain, set terms of engagement, and dismiss such outside advisors, including compensation consultants, legal counsel or other experts, as it deems appropriate, and to approve the fees and expenses of such advisors.
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| Approved as revised: Board of Directors of Halliburton Company |
| December 7, 2005 |
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| Supersedes previous version dated: |
| July 15, 2004 |
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CORPORATE POLICY
SERVICES OF INDEPENDENT ACCOUNTANTS To establish the policy of Halliburton Company, its subsidiaries and affiliates (the “Company”) with respect to (1) the types of services that may be provided by the independent accounting firm appointed to audit the financial statements of Halliburton Company (the “Principal Independent Accountants”) and (2) the approval of all services provided by the Principal Independent Accountants and all audit services provided by other independent accountants.
This Policy is intended to assist management, the Audit Committee and the Board of Directors in carrying out their respective responsibilities to ensure that (1) the independence of the Principal Independent Accountants is not impaired, (2) no prohibited services are provided by the Principal Independent Accountants and (3) that all services provided by the Principal Independent Accountants and all audit services provided by independent accountants other than the Principal Independent Accountants are pre-approved by the Audit Committee. Nothing herein shall be deemed to amend or restrict the Audit Committee Charter, to restrict the authority of the Audit Committee to appoint, compensate, retain and oversee the work of the Principal Independent Accountants and audit services work of other independent accountants or to alter in any way the responsibilities of the Audit Committee, the Principal Independent Accountants, other independent accountants and management as set forth in the Audit Committee Charter or as required under applicable laws, rules or regulations as they relate to the matters covered herein.
1. The services (“Permitted Services”) which can be performed for the Company by the Principal Independent Accountants will be categorized as follows consistent with rules of the Securities and Exchange Commission (the “SEC”) pertaining to fee disclosure:
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1. | The services (“Permitted Services”) which can be performed for the Company by the Principal Independent Accountants will be categorized as follows consistent with rules of the Securities and Exchange Commission (the “SEC”) pertaining to fee disclosure: |
2. Audit services include:
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2. | Audit services include: |
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| • | audit of financial statements that are filed with the SEC; |
• | • | review of registration statements; |
• | • | Sarbanes-Oxley Section 404 attestations; |
• | • | accounting research for completed transactions; |
• | • | tax or information technology control assistance for Audit services; and |
• | • | such other services as the SEC may, from time to time, deem to constitute Audit services. |
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3. Audit-Related services include:
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3. | Audit-Related services include: |
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| • | employee benefit plan audits; |
• | • | due diligence assistance; |
• | • | accounting research on proposed transactions; |
• | • | assistance with regulatory matters involving the SEC and Public Company Accounting Oversight Board (“PCAOB”), environmental compliance, and project bidding or execution; and |
• | • | other audit or attest services required by regulatory authorities. |
4. Tax services include:
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4. | Tax services include: |
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| • | preparation of original and amended tax returns, claims for refund and tax payment-planning services; |
• | • | tax planning and tax advice, which includes assistance with tax audits and appeals, tax advice relating to proposed transactions, employee benefit plans and requests for rulings or technical advice from taxing authorities; and |
• | • | global tax compliance and advisory services for expatriate employees. |
Notwithstanding the above, Tax services will not include representation before a tax court, district court or U.S. federal court of claims.
5. Other services include:
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| | Notwithstanding the above, Tax services will not include representation before a tax court, district court or U.S. federal court of claims. |
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5. | Other services include: |
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| • | special investigations to assist the Audit Committee or its counsel; |
• | • | corporate secretarial services in foreign jurisdictions; and |
• | • | other services that can be performed for the Company by the Principal Independent Accountants which are allowed by the rules of the SEC and PCAOB and are specifically approved by the Audit Committee or the Committee Designee (as defined below). |
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6. | The Audit Committee has determined that the Principal Independent Accountants providing Audit-Related services, Tax services and Other services is consistent with the maintenance of auditor independence. Accordingly, the Audit Committee is pre-approving as set forth in this Paragraph 6 the performance by the Principal Independent Accountants of the enumerated Permitted Services: |
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| a. | Audit, Audit-Related and Tax services will be described in a plan submitted by the Principal Independent Accountants to, and approved in advance on, an annual basis by the Audit Committee. The approved plan, together with any approved modifications or supplements to the plan, is referred to in this policy as the “Principal Independent Accountants Auditor Services Plan”; |
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| b. | For Audit, Audit-Related and Tax services that are not included in the Principal Independent Accountants Auditor Services Plan, (1) any service the fees for which will be $150,000 or less are approved, and (2) any service the fees for which will be greater than $150,000 will require the specific approval of (a) the Audit Committee, or (b) the Chairman of the Audit Committee or another member of the Audit Committee designated by the Audit Committee or the Chairman of the Audit Committee (the “Committee Designee”); and |
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| c. | Other services (1) the fees for which will be $50,000 or less are approved, and (2) the fees for which will be greater than $50,000 will require the specific approval of (a) the Audit Committee, or (b) the Committee Designee. |
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| Any services of the Principal Independent Accountants (i) approved by the Committee Designee or (ii) pre-approved by the Audit Committee by virtue of this paragraph 6 but not included in the Principal Independent Accountants Auditor Services Plan will be reported to the full Audit Committee at its next regularly scheduled meeting. |
6. The Audit Committee has determined that the Principal Independent Accountants providing Audit-Related services, Tax services and Other services is consistent with the maintenance of auditor independence. Accordingly, the Audit Committee is pre-approving as set forth in this Paragraph 6 the performance by the Principal Independent Accountants of the enumerated Permitted Services:
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a. Audit, Audit-Related and Tax services will be described in a plan submitted by the Principal Independent Accountants to, and approved in advance on, an annual basis by the Audit Committee. The approved plan, together with any approved modifications or supplements to the plan, is referred to in this policy as the “Principal Independent Accountants Auditor Services Plan”;
b. For Audit, Audit-Related and Tax services that are not included in the Principal Independent Accountants Auditor Services Plan, (1) any service the fees for which will be $150,000 or less are approved, and (2) any service the fees for which will be greater than $150,000 will require the specific approval of (a) the Audit Committee, or (b) the Chairman of the Audit Committee or another member of the Audit Committee designated by the Audit Committee or the Chairman of the Audit Committee (the “Committee Designee”); and
c. Other services (1) the fees for which will be $50,000 or less are approved, and (2) the fees for which will be greater than $50,000 will require the specific approval of (a) the Audit Committee, or (b) the Committee Designee.
Any services of the Principal Independent Accountants (i) approved by the Committee Designee or (ii) pre-approved by the Audit Committee by virtue of this paragraph 6 but not included in the Principal
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Independent Accountants Auditor Services Plan will be reported to the full Audit Committee at its next regularly scheduled meeting.
7. Any other Permitted Services to be provided by the Principal Independent Accountants not specifically listed under paragraphs 2 through 5 will require specific approval by the (a) Audit Committee or (b) Committee Designee.
8. On a quarterly basis, the Principal Independent Accountants will furnish to the Audit Committee a report reflecting the Permitted Services approved year-to-date categorized as follows:
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7. | Any other Permitted Services to be provided by the Principal Independent Accountants not specifically listed under paragraphs 2 through 5 will require specific approval by the (a) Audit Committee or (b) Committee Designee. |
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8. | On a quarterly basis, the Principal Independent Accountants will furnish to the Audit Committee a report reflecting the Permitted Services approvedyear-to-date categorized as follows: |
9. For any Audit services to be provided by independent accountants other than the Principal Independent Accountants, the Audit Committee is pre-approving as set forth in this Paragraph 9 the performance of Audit services by such independent accountants as follows:
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9. | For any Audit services to be provided by independent accountants other than the Principal Independent Accountants, the Audit Committee is pre-approving as set forth in this Paragraph 9 the performance of Audit services by such independent accountants as follows: |
a. Audit services will be described in a plan submitted by the Chief Accounting Officer to, and approved in advance on, an annual basis by the Audit Committee. The approved plan, together with any approved modifications or supplements to the plan, is referred to in this policy as the “Other Auditor Services Plan”; and
b. For Audit services that are not included in the Other Auditor Services Plan, (1) any service the fees for which will be $150,000 or less are approved, and (2) any service the fees for which will be greater than $150,000 will require the specific approval of (a) the Audit Committee, or (b) the Committee Designee.
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| a. | Audit services will be described in a plan submitted by the Chief Accounting Officer to, and approved in advance on, an annual basis by the Audit Committee. The approved plan, together with any approved modifications or supplements to the plan, is referred to in this policy as the “Other Auditor Services Plan”; and |
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| b. | For Audit services that are not included in the Other Auditor Services Plan, (1) any service the fees for which will be $150,000 or less are approved, and (2) any service the fees for which will be greater than $150,000 will require the specific approval of (a) the Audit Committee, or (b) the Committee Designee. |
Any Audit services to be provided by independent accountants other than the Principal Independent Accountants which have been (i) approved by the Committee Designee or (ii) pre-approved by the Audit Committee by virtue of this paragraph 9 but not included in the Other Auditor Services Plan will be reported to the full Audit Committee at its next regularly scheduled meeting.
10. The Principal Independent Accountants shall not be engaged to provide any service that would result in the Principal Independent Accountants:
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10. | The Principal Independent Accountants shall not be engaged to provide any service that would result in the Principal Independent Accountants: |
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| • | functioning in the role of management; |
• | • | auditing its own work; or |
• | • | serving in an advocacy role. |
Without limiting the generality of the previous sentence, the following “Prohibited Non-Audit Services” shall not be performed for the Company by the Principal Independent Accountants:
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| • | bookkeeping or other services related to the accounting records or financial statements of the Company; |
• | • | financial information systems design and implementation; |
• | • | appraisal or valuation services, fairness opinions, or contribution-in-kindcontribution-in-kind reports; |
• | • | internal audit outsourcing services; |
• | • | management functions or human resources; |
• | • | broker-dealer, investment adviser, or investment banking services; |
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• | • | expert services unrelated to the audit; and |
• | • | any other service that the PCAOB or SEC determines, by regulation, is impermissible. |
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11. The Company shall not hire any of the following individuals to fill a “financial reporting oversight role” (being a position where that person can influence the contents of Halliburton Company’s financial statements or anyone who prepares them, such as when the person is a member of the Board of Directors, or the chief executive officer, president, chief financial officer, chief operating officer, general counsel, chief accounting officer, corporate controller, director of internal audit, director of financial reporting, corporate treasurer, or any equivalent position for Halliburton Company) for a one year period following the completion of the annual audit for the Company:
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11. | The Company shall not hire any of the following individuals to fill a “financial reporting oversight role” (being a position where that person can influence the contents of Halliburton Company’s financial statements or anyone who prepares them, such as when the person is a member of the Board of Directors, or the chief executive officer, president, chief financial officer, chief operating officer, general counsel, chief accounting officer, corporate controller, director of internal audit, director of financial reporting, corporate treasurer, or any equivalent position for Halliburton Company) for a one year period following the completion of the annual audit for the Company: |
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| • | lead partner for the audit; |
• | • | concurring partner for the audit; or |
• | • | any other member of the audit engagement team who provides more than ten hours of audit, review or attest services for the Company. |
The Principal Independent Accountants will maintain a list of all members of the audit engagement team who fall into the categories described above and present such list to the Chief Accounting Officer on an annual basis.
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| The Principal Independent Accountants will maintain a list of all members of the audit engagement team who fall into the categories described above and present such list to the Chief Accounting Officer on an annual basis. |
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| The approval of the Chief Financial Officer is required before the Company extends an offer for a position to any personnel of the Principal Independent Accountants, including any individuals that were formerly personnel of the Principal Independent Accountants, who participated in the Company’s audit engagement team within the previous two years. The Chief Financial Officer will report to the Audit Committee as to any personnel or former personnel of the Principal Independent Accountants who are hired by the Company during the previous quarter. Additionally, approval of the Audit Committee Chairman is required before the Company may hire any partner or former partner of the Principal Independent Accountants. |
The approval of the Chief Financial Officer is required before the Company extends an offer for a position to any personnel of the Principal Independent Accountants, including any individuals that were formerly personnel of the Principal Independent Accountants, who participated in the Company’s audit engagement team within the previous two years. The Chief Financial Officer will report to the Audit Committee as to any personnel or former personnel of the Principal Independent Accountants who are hired by the Company during the previous quarter. Additionally, approval of the Audit Committee Chairman is required before the Company may hire any partner or former partner of the Principal Independent Accountants.
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12. | Both the lead and concurring partners of the Principal Independent Accountants shall be rotated after five years of service and, upon rotation, are subject to a five year “time out” period. Other audit partners of the Principal Independent Accountants shall be rotated after seven years of service and, upon rotation, are subject to a two-year “time out” period. Audit partners shall mean partners on the audit engagement team who have responsibility for decision-making on significant auditing, accounting and reporting matters that affect the financial statements or who maintain regular contact with management and the Audit Committee. On an annual basis, the Principal Independent Accountants will report to the Audit Committee the names and status of rotation of all audit partners subject to rotation. |
12. Both the lead and concurring partners of the Principal Independent Accountants shall be rotated after five years of service and, upon rotation, are subject to a five year “time out” period. Other audit partners of the Principal Independent Accountants shall be rotated after seven years of service and, upon rotation, are subject to a two-year “time out” period. Audit partners shall mean partners on the audit engagement team who have responsibility for decision-making on significant auditing, accounting and reporting matters that affect the financial statements or who maintain regular contact with management and the Audit Committee. On an annual basis, the Principal Independent Accountants will report to the Audit Committee the names and status of rotation of all audit partners subject to rotation.
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| Approved as revised: Audit Committee of Halliburton Company |
| March 15, 2004 |
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| Supersedes previous version dated: |
| May 7, 2003 |
Approved as revised: Audit Committee of Halliburton Company
March 15, 2004
Supersedes previous version dated:
May 7, 2003
Other References:
1. Halliburton Company Audit Committee Charter.
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Appendix D
AMENDMENT TO CERTIFICATE OF INCORPORATION
RESOLVED, that the first sentence of Article FOURTH of the Restated Certificate of Incorporation of Halliburton be amended to increase the number of authorized shares of Common Stock, par value $2.50 per share, of Halliburton from 1,000,000,000 to 2,000,000,000, such first sentence of Article FOURTH of the Restated Certificate of Incorporation, when so amended, to be and read in its entirety as follows:
The aggregate number of shares which the Corporation shall have authority to issue shall be two billion five million (2,005,000,000), consisting of two billion (2,000,000,000) shares of Common Stock of the par value of Two and 50/100 Dollars ($2.50) per share and five million (5,000,000) shares of Preferred Stock without par value.
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Appendix E
FUTURE SEVERANCE AGREEMENTS POLICY
RESOLVED, that the stockholders of Halliburton Company (“Halliburton” or the “Company”) hereby approve the Board of Directors’ policy (the “Policy”) that the Company will not enter into a Future Severance Agreement with any Executive Officer that provides Benefits in an amount that exceeds 2.99 times the Executive Officer’s annual base salary and bonus at the time of severance, unless such Future Severance Agreement receives prior stockholder approval or is ratified by stockholders at a regularly scheduled annual meeting within the following 15 months. An “Executive Officer” is any person who is or becomes at the time of execution of a Future Severance Agreement an officer of Halliburton or an affiliate who is required to file reports pursuant to Section 16 of the Securities Exchange Act of 1934, as amended.
“Future Severance Agreement” means a Future Employment Agreement or a Severance Agreement entered into after the effective date of the Policy. A “Future Employment Agreement” means an agreement between Halliburton or one of its affiliates and an Executive Officer pursuant to which the individual renders services to Halliburton or one of its affiliates as an employee. A “Severance Agreement” means an agreement between Halliburton or one of its affiliates and an Executive Officer, which relates to such individual’s termination of employment with Halliburton and its affiliates.
“Benefits” means (i) cash amounts payable by Halliburton in the event of termination of the Executive Officer’s employment; and (ii) the present value of benefits or perquisites provided for periods after termination of employment (but excluding benefits or perquisites provided to employees generally). Benefits include lump-sum payments and the estimated present value of any periodic payments made or benefits or perquisites provided following the date of termination.
Benefits, however, does not include (i) payments of salary, bonus or performance award amounts that had accrued at the time of termination; (ii) payments based on accrued qualified and non-qualified deferred compensation plans, including retirement and savings benefits; (iii) any benefits or perquisites provided under plans or programs applicable to employees generally; (iv) amounts paid as part of any employment agreement intended to “make-whole” any forfeiture of benefits from a prior employer; (v) amounts paid for services following termination of employment for a reasonable consulting agreement for a period not to exceed one year; (vi) amounts paid for post-termination covenants, such as a covenant not to compete; (vii) the value of accelerated vesting or payment of any outstanding equity-based award; or (viii) any payment that the Board determines in good faith to be a reasonable settlement of any claim made against Halliburton.
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DIRECTIONS TO THE FOUR SEASONS HOTEL, HOUSTON, TEXAS
SIMMONS CENTER, DUNCAN, OKLAHOMA
Heading North on I-45, from Hobby Airport (HOU)/Galveston AreaForm # HO4639
Take I-45 North. The right lanes will lead to the Scott Street/Downtown Destinations split. From there, take the Pease Street exit. Follow Pease about 10 blocks to Austin and turn right. Follow Austin 6 blocks to Lamar and turn left. Hotel will be immediately on the left.
Heading South on I-45, from Bush Intercontinental Airport (IAH)/North Texas Area
Take I-45 South to the Dallas/Pierce exit, stay left and exit Jefferson, go about 8 blocks and turn left on Austin, follow Austin to Lamar and turn left. The hotel will be immediately on the left.
Heading South on Hwy 59, from Bush Intercontinental Airport (IAH)
Take Highway 59 Southbound to the McGowan/Tuam exit, turn right on McGowan, right at Austin and left on Lamar. The hotel will be immediately on the left.
Heading East on Hwy 290, from Austin
Take Hwy 290 South to 610 South. Follow 610 almost 2 miles to I-10 East to Downtown. Follow the directions below.
Heading East on I-10, from Katy/San Antonio Areas
Take I-10 East I-45 South. Follow I-45 a short distance and take the Dallas/Pierce exit. Stay left and exit Jefferson, go about 8 blocks and turn left on Austin, follow Austin to Lamar and turn left. The hotel will be immediately on the left.
Heading West on I-10, from Beaumont/Louisiana Areas
Take I-10 West to Hwy 59 South (left exit). Take Highway 59 Southbound to the McGowan/Tuam exit, turn right on McGowan, right at Austin and left on Lamar. The hotel will be immediately on the left.
Heading North on 288, from the Reliant Park Area
Take Highway 288 to 59 north/Cleveland. Exit at Downtown Destinations/Polk Street exit. Turn left at the first light onto Polk. Follow Polk about 5 blocks to Austin and turn right. Go 2 blocks to Lamar and turn left. Hotel will be immediately on the left.
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To vote in accordance with the Board of Directors’ recommendations just sign below;below, no boxes need to be checked. If no direction is made, this proxy will be Voted FOR Items 1, 2, 3 and 24 and Voted AGAINST Items 35, 6 and 4.7. | | Please Mark Here for Address Change orComments
Comments | ¨ |
| SEE REVERSE SIDE |
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A. The Board of Directors Recommendrecommends a Vote FORvote “FOR” the listed nominees and proposals 2, 3 and 4. Item 1.1 — ELECTION OF DIRECTORS. | | B. The Board of Directors recommends a vote “AGAINST” proposals 5, 6 and 7. |
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Item 1 – ELECTION OF DIRECTORS. |
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NOMINEES: | | |
01 R.L. Crandall | | 06 D.J. Lesar |
02 K.T. Derr | | 07 J.L. Martin |
03 S.M. Gillis | | 08 J.A. Precourt |
04 W.R. Howell | | 09 D.L. Reed |
05 R.L. Hunt | | |
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01 A.M. Bennett 02 J.R. Boyd 03 R.L. Crandall 04 K.T. Derr 05 S.M. Gillis 06 W.R. Howell
| | | | 7 R.L. Hunt 8 D.J. Lesar 9 J.L. Martin 10 J.A. Precourt 11 D.L. Reed
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FOR all nominees listed (except as marked to the contrary) | ¨ | o | | WITHHOLD AUTHORITY to vote for all nominees listed | ¨ | o |
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(Instruction: To withhold authority to vote for an individual nominee, write that nominee’s name on the space provided below.) |
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Directors Recommend a Vote FOR Item 2. |
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| | FOR | | AGAINST | | ABSTAIN |
Item 2 – Proposal for Ratification of the Selection of Auditors. | | ¨ | | ¨ | | ¨ |
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Directors Recommend a Vote AGAINST Items 3 and 4. |
| | FOR | | AGAINST | | ABSTAIN |
Item 3 – Stockholder Proposal on Severance Agreements. | | ¨ | | ¨ | | ¨ |
| | FOR | | AGAINST | | ABSTAIN |
Item 4 – Stockholder Proposal on Director Election Vote Threshold. | | ¨ | | ¨ | | ¨ |
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Item 5 – IN THEIR DISCRETION, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. |
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| | YES |
I PLAN TO ATTEND
THE MEETING | ¨ |
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| | | | | | FOR | | AGAINST | | ABSTAIN | | | | | | | | FOR | | AGAINST | | ABSTAIN |
Item 2 | | - | | Proposal for Ratification of the Selection of Auditors. | | o | | o | | o | | Item 5 | | - | | Proposal on Human Rights Review. | | o | | o | | o |
| | | | | | FOR | | AGAINST | | ABSTAIN | | | | | | | | FOR | | AGAINST | | ABSTAIN |
Item 3 | | - | | Proposal to Amend Certificate of Incorporation. | | o | | o | | o | | Item 6 | | - | | Proposal on Director Election Vote Threshold. | | o | | o | | o |
| | | | | | FOR | | AGAINST | | ABSTAIN | | | | | | | | FOR | | AGAINST | | ABSTAIN |
Item 4 | | - | | Proposal on Severance Agreements. | | o | | o | | o | | Item 7 | | - | | Proposal on Poison Pill. | | o | | o | | o |
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Item 8 | | - | | IN THEIR DISCRETION, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. | | | | | |
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| | YES |
I PLAN TO ATTEND THE MEETING | | o | | | | | |
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Signature | | Signature | | DateSignature | | | | Date |
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NOTE: | | Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. |
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
5FOLD AND DETACH HERE5
ChooseMLinkSMMLinkSMfor fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ServiceDirect®atwww.melloninvestor.com/isd where step-by-step instructions will prompt you through enrollment. |
Vote by Internet or Telephone or Mail24 Hours a Day, 7 Days a Week Internet and telephone voting is available through 11:59 PMpm Eastern Time
the day prior to annual meeting day. Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
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Internet http://www.proxyvoting.com/halUse the internet to vote your proxy. Have your proxy card in hand when you access the web site. | | OR | | Telephone 1-866-540-5760Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | | OR | | Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
PROXY
PROXY
PROXY FOR 20052006 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS | The undersigned hereby appoints D.J. Lesar, A.O. Cornelison, Jr. and M.E. Carriere, 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 at the Four Seasons Hotel, 1300 Lamar Street, Houston, Texas, on Wednesday, May 18, 2005, 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, 2005, is acknowledged. |
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| The undersigned hereby appoints D.J. Lesar, A.O. Cornelison, Jr. and M.E. Carriere, 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 at the Simmons Center, 800 Chisholm Trail Parkway, Duncan, Oklahoma 73534, on Wednesday, May 17, 2006, 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 April 18, 2006, is acknowledged. 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, FOR the Proposals set forth in Items 2, 3 and 4 and AGAINST the Proposals set forth in Items 5, 6 and 7. This proxy when properly executed will be voted in the manner directed herein by the undersigned.
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In the absence of such direction the proxy will be voted FOR the nominees listed in Item 1, FOR the Proposal set forth in Item 2 and AGAINST the Proposals set forth in Items 3 and 4.
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(Continued and to be signed on reverse side)
Address Change/Comments (Mark the corresponding box on the reverse side)
Participants in one or more of the Halliburton Company employee plans should contact
their plan administrator for information on their account. Registered Stockholders can now access their Halliburton Company account online. Access your Halliburton Company stockholder account online via Investor ServiceDirect
®(ISD).
Mellon Investor Services LLC, Transfer Agent for Halliburton Company, now makes it easy and convenient to get current information on your stockholder account.
| | | | |
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• | | View account status | | • | | View payment history for dividends |
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