EXHIBIT 10.1

 
STOCKHOLDER AGREEMENT

BETWEEN

HALLIBURTON COMPANY

AND

THE STOCKHOLDER,

AS DEFINED HEREIN

JANUARY 20, 2005
 

TABLE OF CONTENTS

SECTION 1 TERM
 
1
 
1.1
 
Term
 
1
 
1.2
 
Effect of Termination
 
1
 
SECTION 2 STANDSTILL
 
1
 
2.1
 
Standstill
 
1
 
SECTION 3 TRANSFERS
 
2
 
3.1
 
Transfers
 
2
 
3.2
 
Compliance Certificate
 
3
 
3.3
 
Invalid Transfers
 
3
 
3.4
 
Compliance with Securities Laws
 
3
 
3.5
 
Restrictive Legends
 
3
 
SECTION 4 REGISTRATION RIGHTS
 
4
 
4.1
 
Shelf Registration
 
4
 
4.2
 
Demand Registration Rights
 
6
 
4.3
 
Hedging Transactions
 
7
 
4.4
 
Piggyback Registration Rights
 
8
 
4.5
 
Additional Company Obligations
 
9
 
4.6
 
Additional Obligations of the Stockholder
 
11
 
4.7
 
Expenses of Registration
 
12
 
4.8
 
Indemnification
 
12
 
4.9
 
Rule 144
 
14
 
4.10
 
Assignment
 
14
 
4.11
 
Recapitalizations, Exchanges, etc.
 
14
 
SECTION 5 MISCELLANEOUS
 
14
 
5.1
 
Successors and Assigns
 
14
 
5.2
 
Benefits of Agreement Restricted to Parties
 
15
 
5.3
 
Notices
 
15
 
5.4
 
Severability
 
16
 
5.5
 
Construction
 
16
 
5.6
 
Entire Agreement
 
16
 
5.7
 
Counterparts
 
16
 
5.8
 
Governing Law
 
16
 
5.9
 
Transaction Costs
 
16
 
5.10
 
Amendment
 
16
 
5.11
 
Specific Performance
 
16
 
5.12
 
Jurisdiction; Consent to Service of Process; Waiver
 
17
 
5.13
 
Waiver of Jury Trial
 
17
 
5.14
 
Further Assurances
 
17
 
5.15
Confidentiality
17

APPENDIX

Appendix A Definitions

        

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EXHIBITS

Exhibit A Compliance Certificate
Exhibit B Form of “Plan of Distribution”

 

     

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STOCKHOLDER AGREEMENT

This STOCKHOLDER AGREEMENT (this “Agreement”), dated as of January 20, 2005, is
entered into by and between Halliburton Company, a Delaware corporation, and the
Stockholder.

The definitions of capitalized terms used in this Agreement are set forth in
Appendix A.

RECITALS

In consideration of the premises and the representations, warranties, covenants,
and agreements contained in this Agreement, the Parties hereby agree as follows:

SECTION 1

TERM

1.1 Term. This Agreement is effective as of the date hereof until the
Termination Date. “Termination Date” means the date the Stockholder does not
beneficially own or hold, directly or indirectly, any Subject Shares.

1.2 Effect of Termination. From and after the Termination Date, this Agreement
shall become null and void and of no further force or effect except for the
provisions of sections 1.2, 3.4, 4.8 and 5. Nothing in this section 1.2 shall be
deemed to release any Party from any liability for its breach of the terms,
conditions, and restrictions of this Agreement before the Termination Date.

SECTION 2

STANDSTILL

2.1 Standstill. The Stockholder agrees that prior to the Preliminary Termination
Date, neither it nor any of its Affiliates, shall either alone or in concert
with any Person (provided that no Person who is a counterparty to a Hedging
Transaction entered into by the Stockholder or any of its Affiliates shall be
deemed to be acting in concert with the Stockholder or any of its Affiliates):

(a) in any manner acquire, agree to acquire, or make any proposal to acquire,
directly or indirectly, any Securities of the Company, whether such agreement or
proposal is made with or to the Company or a third party;

(b) make any unsolicited inquiry, proposal or offer to enter into, directly or
indirectly, any sale of all or substantially all assets or property of the
Company, merger or other similar business combination involving the Company;

(c) make, or in any way participate, directly or indirectly, in any
“solicitation” of “proxies” (as such terms are used in the proxy rules of the
SEC) to vote, or seek to advise or influence any Person with respect to the
voting of, any Voting Securities of the Company;

(d) form, join, or in any way participate in a “group” (within the meaning of
section 13(d)(3) of the Exchange Act), with respect to any Voting Securities of
the Company for any purpose prohibited by this section 2.1;

(e) take any action that is reasonably likely to require the Company to make a
public announcement regarding the possibility of a merger or other similar
business combination of the Company;

(f) initiate, solicit (or participate in a solicitation), or propose, directly
or indirectly, the approval of one or more stockholder proposals with respect to
the Company or any of its Subsidiaries;

(g) request the Company to, or seek to cause the Company (or its Board of
Directors) to, call any meeting of the stockholders of the Company or any of its
Subsidiaries;

(h) initiate any written consent of the stockholders of the Company unless
requested to do so by the Board of Directors;

(i) grant or agree to grant any proxy or other voting power to any Person other
than the Company or other Persons designated by the Company to vote at any
meeting of the stockholders of the Company, or deposit any Voting Securities of
the Company in a voting trust or, except as specifically contemplated by this
Agreement, subject them to a voting agreement or other agreement or arrangement
with respect to the voting of such Voting Securities; or

(j) disclose any intention, plan, or arrangement inconsistent with the
foregoing.

SECTION 3

TRANSFERS

3.1 Transfers.

(a) The Stockholder may Transfer the Subject Shares only as permitted by, and in
accordance with, section 3.1(b); provided, however, that once a Subject Share
has been Transferred in accordance with section 3.1(b), such Subject Share shall
no longer be subject to the restrictions set forth in this section 3.1.

(b) The Stockholder may Transfer, subject to applicable laws, the Subject Shares
only as follows:

(i) during the Preliminary Restriction Period, pursuant to a Shelf Registration
in accordance with the terms and conditions of section 4, in which the number of
Subject Shares the Stockholder will be permitted to Transfer pursuant to such
Shelf Registration, combined with any Subject Shares Transferred pursuant to
section 3.1(b)(iv), shall be limited to the applicable Agreed Volume
Limitations, as may be increased pursuant to section 4.1(b)(iii);

(ii) after the Preliminary Restriction Period and prior to the Demand
Registration Rights Termination Date, pursuant to a Demand Registration in
accordance with the terms and conditions of section 4;

(iii) prior to the Piggyback Registration Rights Termination Date, pursuant to
exercise of the Stockholder’s piggyback registration rights in accordance with
the terms and conditions of section 4;

(iv) pursuant to a privately negotiated transaction or series of related
transactions that is exempt from the registration requirements of the Securities
Act if the following conditions are satisfied:

(A) the number of Subject Shares Transferred pursuant to this section 3.1(b)(iv)
by the Stockholder, combined with any Subject Shares Transferred pursuant to
section 3.1(b)(i), is limited to the applicable Agreed Volume Limitations, as
may be increased pursuant to section 4.1(b)(iii);

(B) after giving effect to the transaction, the transferee and its Affiliates
will not, after reasonable inquiry by the Stockholder, be required to file a
Schedule 13D with the SEC; and

(C) during the Preliminary Restriction Period, no suspension of the Shelf
Registration has been invoked pursuant to section 4.1(b)(i) and is continuing;
provided, however, that if the Shelf Registration is suspended pursuant to
section 4.1(b)(i) during the 30 days beginning on the Funding Date, the
Stockholder may Transfer a number of Subject Shares pursuant to this section
3.1(b)(iv) during such 30-day period equal to 2.5 million less any Subject
Shares otherwise Transferred under this section 3.1(b)(iv) or under section
3.1(b)(i) during such 30-day period;

(v) after the Preliminary Restriction Period, pursuant to Rule 144 of the
Securities Act, including Rule 144(k), if applicable; or

(vi) as a bona fide pledge of Subject Shares to secure a loan.

3.2 Compliance Certificate. Within ten Business Days following the end of each
Three-Month Period from the Funding Date until the second anniversary thereof,
the Stockholder shall execute and deliver a certificate of compliance with
section 3.1(b) in the form of Exhibit A attached hereto.

3.3 Invalid Transfers. Any Transfer of Subject Shares contrary to the provisions
of this section 3 shall be null and void, and the transferee shall not be
recognized by the Company as the holder or owner of such Subject Shares
Transferred for any purpose (including voting or dividend rights), unless and
until the requirements of sections 3.1 and 3.4 have been satisfied. No Subject
Share shall be Transferred on the books of the Company until sections 3.1 and
3.4 have been satisfied.

3.4 Compliance with Securities Laws. The Stockholder shall not Transfer its
interest in a Subject Share at any time if such action would constitute a
violation of any federal- or state-securities or blue-sky laws, or a breach of
the conditions to any exemption from registration of such Subject Shares under
any such laws, or a breach of any undertaking or agreement of the Stockholder
entered into pursuant to such laws, or in connection with obtaining an exemption
thereunder. This section 3.4 shall survive termination of this Agreement for the
maximum period permitted by applicable law.

3.5 Restrictive Legends.

(a) A copy of this Agreement will be filed with the Secretary of the Company and
kept with the records of the Company.

(b) Until such time as a Subject Share held by the Stockholder has been
registered pursuant to a registration statement under the Securities Act in
accordance with the terms and provisions of section 4, the certificate
representing such Subject Share (including all certificates issued upon Transfer
or in exchange thereof or substitution therefor) shall bear the following legend
noted conspicuously on such certificate:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER
AS SET FORTH IN A STOCKHOLDER AGREEMENT. NO TRANSFER OF THESE SHARES WILL BE
EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS OF SUCH STOCKHOLDER
AGREEMENT HAVE BEEN COMPLIED WITH IN FULL AND NO PERSON MAY REQUEST THE COMPANY
TO RECORD THE TRANSFER OF ANY SHARES IF SUCH TRANSFER IS IN VIOLATION OF SUCH
STOCKHOLDER AGREEMENT. A COPY OF SUCH STOCKHOLDER AGREEMENT MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
THE SECRETARY OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY;

provided, however, that upon a Transfer of any Subject Share in accordance with
the provisions of this section 3 to a Person other than any Affiliate of the
Stockholder, the transferee of such Transfer shall have the right to require the
Company to remove the second paragraph of the foregoing legend.

(c) Until such time as a Subject Share held by the Stockholder has been
registered pursuant to a registration statement under the Securities Act in
accordance with the terms and provisions of section 4, the certificate
representing such Subject Share (including all certificates issued upon Transfer
or in exchange thereof or substitution therefor) will also bear any legend
required under any other applicable laws, including state securities or blue sky
laws.

(d) In the event the Stockholder and/or its Affiliates acquire beneficial
ownership, directly or indirectly, of any other or additional Securities of the
Company, the Stockholder shall, and shall cause its Affiliates, if applicable,
to, submit all certificates representing such Securities to the Company so that
the legend or legends required by this section 3.5 may be placed thereon.

(e) The Company may make a notation on its records or give stop-transfer
instructions to any transfer agents or registrars for the Subject Shares in
order to implement the restrictions set forth in this section 3.

SECTION 4

REGISTRATION RIGHTS

4.1 Shelf Registration.

(a) Shelf Registration Statement. The Company shall prepare and file with the
SEC at least 30 days prior to the Funding Date a “shelf” registration statement
(the “Shelf Registration Statement” and any registration effected pursuant to a
Shelf Registration Statement being referred to as a “Shelf Registration”) for an
offering to be made on a continuous basis pursuant to Rule 415 of the Securities
Act covering the Subject Shares. The Shelf Registration Statement shall be on
Form S-3 or another appropriate form permitting registration of such Registrable
Securities for resale by the Stockholder. The Company shall not permit any
Securities other than the Registrable Securities to be included in the Shelf
Registration Statement.

The Company shall use its reasonable best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act on or
as soon as possible after the Funding Date and to keep the Shelf Registration
Statement continuously effective under the Securities Act until the date that is
one year from the Funding Date or such shorter period ending when all
Registrable Securities covered by the Shelf Registration Statement have been
sold in the manner set forth and as contemplated in the Shelf Registration
Statement or cease to be outstanding or cease to be Registrable Securities (the
“Effectiveness Period”); provided, however, that if (i) the Company exercises
its right to suspend the Shelf Registration in accordance with section 4.1(b)(i)
below or (ii) the Shelf Registration Statement is not declared effective under
the Securities Act on the Funding Date, then (A) the Effectiveness Period in
respect of the related Shelf Registration Statement shall be extended by the
same number of days as the suspension period invoked by the Company or the
number of days from the Funding Date until the Shelf Registration Statement is
declared effective under the Securities Act, respectively, or both, if
applicable, and (B) notwithstanding section 3.1, the Stockholder may Transfer
the Subject Shares pursuant to the Shelf Registration Statement during such
extension of the Effectiveness Period, subject to the Agreed Volume Limitations,
as the Agreed Volume Limitations may be increased pursuant to section
4.1(b)(iii).

(b) Limitations.

(i) The Company shall have the right to suspend the effectiveness of the Shelf
Registration at any time if (A) its Chief Executive Officer determines, in his
good faith judgment, that the registration and distribution of Registrable
Securities in a Shelf Registration would, materially impede, delay or interfere
with any firm commitment underwritten offering of Securities by the Company
(including an offering involving sales of Securities to initial purchasers who
intend to resell the Securities under Rule 144A of the Securities Act,
Regulation S or to accredited investors (as defined in the Securities Act)) or
any material acquisition, corporate reorganization or other material transaction
involving the Company, or (B) its Chief Executive Officer determines, in his
good faith judgment based on advice of counsel, that the registration and
distribution of Registrable Securities in a Shelf Registration would require
disclosure of material nonpublic information, and that the disclosure of such
information at that time would materially and adversely affect the Company. If
either of subclauses (A) or (B) above apply, the Company will have the right to
suspend the effectiveness of such Shelf Registration for a period of not more
than 90 days; provided, however, that the Company may not use the right set
forth in this clause (i): (x) more than once during the Effectiveness Period;
(y) unless each director and executive officer of the Company is also prohibited
by the Company’s insider trading policy or otherwise from making purchases and
sales (other than those made pursuant to plans designed to comply with Rule
10b5-1(c)(1)(i) under the Exchange Act) for the same reason for which the Shelf
Registration is being suspended; and (z) unless each other holder entitled to
sell equity Securities pursuant to registration rights under a selling
stockholder prospectus (other than a registration in which the only Common Stock
being registered is Common Stock issuable upon conversion of debt or equity
Securities that are also being registered) is, or agrees to be, subject to
deferral provisions substantially similar to, or more restrictive than, those
contained in this clause (i).

(ii) The Company shall give notice to the Stockholder at the beginning of any
suspension period under this section 4.1(b). Following the end of any such
suspension period, the Company shall give prompt notice to the Stockholder, make
any other filing with the SEC required of it or terminate any suspension of
sales it has put into effect and take all such other commercially reasonable
actions to permit registered sales of Registrable Securities as contemplated
hereby. It is understood and agreed that this section 4.1(b) shall not prevent a
Transfer permitted by section 3.1(b)(iii) or (vi).

(iii) If (A) the Company invokes its right to suspend the effectiveness of the
Shelf Registration pursuant to section 4.1(b)(i) or (B) the Shelf Registration
Statement is not declared effective under the Securities Act on the Funding
Date, then the Agreed Volume Limitations in the Three-Month Period subsequent to
any Three-Month Period in which (x) such a suspension occurs or is continuing or
(y) such Shelf Registration Statement is not declared effective under the
Securities Act, as applicable, shall be increased by an amount of Subject Shares
equal to the difference between (I) the product of (a) the maximum number of
Subject Shares permitted to be Transferred pursuant to section 3.1(b)(i) and
(iv) in the Three-Month Period in which the suspension occurred or is continuing
or in which the Shelf Registration Statement is not declared effective under the
Securities Act, assuming such suspension had not occurred or been continuing and
such Shelf Registration Statement had been declared effective under the
Securities Act on the Funding Date and (b) a fraction, the numerator of which is
the aggregate number of days that the Shelf Registration was not effective
and/or was suspended in the Three-Month Period and the denominator of which is
91, and (II) the number of Subject Shares actually Transferred pursuant to
section 3.1(b)(i) and (iv) in such Three-Month Period.

(c) Penalty Interest. The Company and the Stockholder agree that the Stockholder
will suffer damages if the Company fails to fulfill its obligations under this
section 4.1 and that it would not be feasible to ascertain the extent of such
damages with precision. Accordingly, the Company agrees to pay, as liquidated
damages, penalty interest on the Registrable Securities (“Penalty Interest”)
under the circumstances and to the extent set forth below:

(i) If the Shelf Registration Statement has not been declared effective by the
SEC on or prior to the 91st day after the Funding Date then, commencing on the
Funding Date, Penalty Interest shall accrue and be calculated daily at the
Penalty Rate on an amount equal to the product of (A) the Share Amount and (B)
the Trading Price; provided, however, that all Penalty Interest shall cease to
accrue upon the earliest to occur of (x) the expiration of the first anniversary
of the Funding Date, (y) the effectiveness of the Shelf Registration Statement,
and (z) such time as there are no Registrable Securities outstanding.

(ii) As used in this section 4.1(c) the term “Penalty Rate” means:

(A) 5% per annum during the first 91 days after the Funding Date;

(B) 10% per annum from day 92 through day 182 after the Funding Date;

(C) 20% per annum from day 183 through day 273 after the Funding Date; and

(D) 25% per annum from day 274 through day 365 after the Funding Date.

(iii) As used in this section 4.1(c) the term “Share Amount” means:

(A) for purposes of calculating the Penalty Interest accruing during the first
91 days after the Funding Date, five million Subject Shares;

(B) for purposes of calculating the Penalty Interest accruing from day 92
through day 182 after the Funding Date, 15 million Subject Shares;

(C) for purposes of calculating the Penalty Interest accruing from day 183
through day 273 after the Funding Date, the sum of (x) 15 million Subject Shares
plus (y) the Penalty Average Weekly Trading Volume applicable to days 183
through 273 after the Funding Date, and

(D) for purposes of calculating the Penalty Interest accruing from day 273
through day 365 after the Funding Date, the sum of (x) 15 million Subject Shares
plus (y) the Penalty Average Weekly Trading Volume applicable to days 183
through 273 after the Funding Date plus (z) the Penalty Average Weekly Trading
Volume applicable to days 274 through 365 after the Funding Date.

(iv) Any amounts of Penalty Interest due pursuant to this section 4.1(c) will be
payable in cash by wire transfer of immediately available funds to an account
designated by the Stockholder within five Business Days of (A) the 91st day
following the Funding Date, (B) the 182nd day following the Funding Date, (C)
the 273rd day following the Funding Date, and (D) the 365th day following the
Funding Date; provided, however that if the Shelf Registration Statement is
declared effective during one of such periods, then the Penalty Interest payable
shall be prorated for such period to the effective date of the Shelf
Registration Statement.

(v) Notwithstanding the forgoing, any suspension of effectiveness of a Shelf
Registration Statement or a Shelf Registration pursuant to section 4.1(b)(i)
above shall not give rise to the obligation of the Company to pay Penalty
Interest or result in the accrual of Penalty Interest.

4.2 Demand Registration Rights. After the Preliminary Restriction Period and
prior to the Demand Registration Rights Termination Date, the Stockholder shall
have demand registration rights as follows:

(a) Exercise of Demand Registration Rights. Subject to sections 4.2(b) and (c),
if the Stockholder provides the Company with a written request that the Company
file a registration statement under the Securities Act covering the registration
of Registrable Securities owned by the Stockholder (that request being referred
to as a “Demand Request” and such registration being referred to as a “Demand
Registration”), the Company shall within 30 days after receiving the Demand
Request, file a registration statement under the Securities Act covering all
Registrable Securities that the Stockholder requested to be registered and,
after such filing, use commercially reasonable efforts to cause such
registration statement to be declared effective. The Demand Request shall
specify the number of shares of Registrable Securities proposed to be sold and
the manner of distribution.

(b) Underwriting Requirements. If requested by the Stockholder, the offering to
be made pursuant to any Demand Registration shall be an underwritten offering.
The Stockholder shall have the right to select all underwriters for any
Securities being offered pursuant to any Demand Request; provided, however,
that, the underwriters selected by the Stockholder shall be reasonably
acceptable to the Company. The Stockholder shall participate, and include those
Registrable Securities, in the underwriting as provided in this Agreement. If
the lead managing underwriter for an offering determines in its sole discretion
that the total amount of Securities proposed to be included in such offering is
of such an amount as would have a material adverse effect on the offering’s
success, then the Company shall have the right to reduce the number of
Securities included in the offering to a number that the lead managing
underwriter determines in its sole discretion would not have a material adverse
effect on the offering’s success. In the event a reduction occurs, the amount of
Securities to be included in the offering shall be reduced as follows:

(i) to the extent necessary to reduce the total number of Securities to be
included in such offering to the amount that the lead managing underwriter
determines in its sole discretion would not have a material adverse effect on
the offering’s success, Securities offered for the account of any stockholder,
other than the Stockholder, shall be excluded from the offering;

(ii) to the extent further reduction is necessary, after application of clause
(i) above, to reduce the total number of Securities to be included in such
offering to the amount that the lead managing underwriter determines in its sole
discretion would not have a material adverse effect on the offering’s success,
Securities offered for the account of the Company, shall be excluded from the
offering; and

(iii) to the extent further reduction is necessary, after application of clauses
(i) and (ii) above, to reduce the total number of Securities to be included in
such offering to the amount that the lead managing underwriter determines in its
sole discretion would not have a material adverse effect on the offering’s
success, Registrable Securities offered for the account of the Stockholder shall
be excluded.

(c) Limitations.

(i) The Company will not be obligated to initiate any Demand Registration at any
time if (A) doing so would breach any provision of any Stockholder’s agreement
entered into pursuant to section 4.6(d), (B) in the good faith judgment of its
Chief Executive Officer, the registration and distribution of Registrable
Securities in a Demand Registration would materially impede, delay or interfere
with any firm commitment underwritten offering of Securities by the Company
(including an offering involving sales of Securities to initial purchasers who
intend to resell the Securities under Rule 144A of the Securities Act,
Regulation S or to accredited investors (as defined in the Securities Act)) on
which the Company has commenced work prior to receiving a Demand Request, (C) in
the good faith judgment of the Chief Executive Officer of the Company, the
registration and distribution of Registrable Securities in a Demand Registration
would materially impede any material acquisition, corporate reorganization or
other material transaction involving the Company, or (D) its Chief Executive
Officer determines, in his good faith judgment based on advice of counsel, that
the registration and distribution of Registrable Securities in a Demand
Registration would require disclosure of material non-public information, and
that the disclosure of such information at that time would materially and
adversely affect the Company. If any of subclauses (A) through (D) above apply,
the Company shall have the right to defer the filing or effectiveness of the
registration statement relating to such Demand Registration for a period of not
more than 120 days after receipt of the Demand Request; provided, however, that
the Company may not use the right set forth in this clause (i): (x) more than
once in any twelve month period, (y) unless each director and executive officer
of the Company is also prohibited by the Company’s insider trading policy or
otherwise from making purchases and sales (other than those made pursuant to
plans designed to comply with Rule 10b5-1(c)(1)(i) under the Exchange Act) for
the same reason for which the Demand Registration is being deferred, and (z)
except for a deferral pursuant to clause (B), unless each other holder entitled
to sell equity Securities pursuant to registration rights under a selling
stockholder prospectus (other than a registration in which the only Common Stock
being registered is Common Stock issuable upon conversion of debt or equity
Securities that are also being registered) is, or agrees to be, subject to
deferral provisions substantially similar to or more restrictive than those
contained in this clause (i).

(ii) The Company will only be obligated to initiate a Demand Registration if the
amount of Registrable Securities to be registered and sold pursuant to this
section 4.2 in the aggregate (A) is greater than or equal to either (x) 5
million shares of Common Stock or (y) a Market Value of $100 million and (B) is
less than or equal to 25 million shares of Common Stock (as adjusted for stock
splits, stock distributions, reclassifications or other reorganizations of the
Company’s capital stock).

(iii) The Company will not be required to effect more than two Demand
Registrations in any 12-month period and will not be obligated to effect any
Demand Registration within 180 days after the effective date of a previous
Demand Registration. A Demand Registration will not be deemed effected unless a
registration statement with respect thereto has become effective; provided,
however, that (A) a registration which does not become effective after the
Company has filed a registration statement with respect thereto solely by reason
of the refusal to proceed of the Stockholder (other than a refusal to proceed
based upon the advice of counsel relating to a matter with respect to the
Company) shall be deemed to have been effected by the Company, (B) if the
Stockholder elects to terminate a registration following the Company’s exercise
of any deferral right pursuant to sections 4.2(c)(i)(B) or 4.2(c)(iv), such
registration shall not be deemed effected, (C) if the Company fails to comply
with its obligations under this Agreement with respect to such Demand
Registration and the Stockholder reasonably determines, and notifies the
Company, that such failure has a material adverse effect on the Stockholder,
such registration shall not be deemed effected, and (D) if the conditions to
closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied, other than by
reason of some act or omission by the Stockholder, such registration shall not
be deemed effected.

(iv) The Company shall give notice to the Stockholder (A) at the beginning of
any deferral period under this section 4.2(c) promptly following its receipt of
the Demand Request and (B) promptly following the end of any such deferral
period.

4.3 Hedging Transactions.

(a) In connection with any Shelf Registration or Demand Registration, the
Company agrees that if, in the reasonable judgment of counsel to the
Stockholder, it is necessary or desirable to register under the Securities Act
any proposed Hedging Transaction or any sales or transfers of Registrable
Securities in connection therewith, then the Company shall use its reasonable
best efforts to take such actions (which may include, among other things, the
filing of a post-effective amendment to the Shelf Registration Statement or any
registration statement filed in connection with any Demand Registration to
include additional or changed information that is material or is otherwise
required to be disclosed, including, without limitation, a description of such
Hedging Transaction, the name of the counterparty to the Hedging Transaction,
identification of the counterparty to the Hedging Transaction or its Affiliates
as underwriters or potential underwriters, if applicable, or any change to the
“Plan of Distribution” in such registration statement) as may reasonably be
required to register such Hedging Transactions or sales or transfer of
Registrable Securities in connection therewith under the Securities Act in a
manner consistent with the rights and obligations of the Company hereunder with
respect to the registration of Registrable Securities; provided, however, that
section 4.1(c) shall not be applicable to any such post-effective amendment to
the Shelf Registration Statement and any such Demand Registration shall be
deemed effected under section 4.2(c)(iii) whether or not the post-effective
amendment is declared effective.

(b) The Company further agrees to include, under the caption “Plan of
Distribution” (or the equivalent), in the Shelf Registration Statement or any
registration statement filed in connection with any Demand Registration, and any
related prospectus (to the extent such inclusion is permitted under the
applicable SEC regulations and is consistent with comments received from the SEC
during any SEC review of such registration statement), language substantially in
the form of Exhibit B attached hereto and to include in each prospectus
supplement filed in connection with any proposed Hedging Transaction language
mutually agreed upon by the Company, the Stockholder and the counterparty to the
Hedging Transaction describing such Hedging Transaction.

4.4 Piggyback Registration Rights. Prior to the Piggyback Registration Rights
Termination Date, the Stockholder shall have piggyback registration rights as
follows:

(a) Exercise of Piggyback Registration Rights. If the Company proposes to
register any shares of Common Stock under the Securities Act for its own account
or for the account of any stockholder of the Company other than the Stockholder
(other than a registration on Form S-4 or such other forms as are then
prescribed under the Securities Act for the same purposes as such form, a
registration relating solely to the sale of Securities to participants in a
Company compensation, benefit or stock plan or a registration in which the only
Common Stock being registered is Common Stock issuable upon conversion of debt
or equity Securities that are also being registered), the Company shall, at that
time, promptly give the Stockholder written notice of such registration. Upon
the written request of the Stockholder (to the extent the Company receives such
request within 10 Business Days after the Company delivered its notice of
registration under this section 4.4(a)), the Company shall, subject to the
provisions of section 4.4(b), (c) and (d), cause to be registered under the
Securities Act all of the Registrable Securities that the Stockholder has
requested to be registered.

(b) Underwriting Requirements. If the offering for which the Company gave notice
pursuant to section 4.4(a) is an underwritten offering and the lead managing
underwriter for such offering determines in its sole discretion that the total
amount of Securities proposed to be included in such offering, including by the
Company and the Stockholder, is of such an amount as would have a material
adverse effect on the offering’s success, then the Company shall have the right
to reduce the number of Securities, including Registrable Securities, included
in the offering to a number that the lead managing underwriter determines in its
sole discretion would not have a material adverse effect on the offering’s
success. In the event that a reduction occurs, the amount of Registrable
Securities to be included in the offering on behalf of the Stockholder shall be
reduced as follows:

(i) if the registration of Securities is pursuant to any demand registration
rights of a stockholder (other than a Demand Registration initiated by the
Stockholder pursuant to section 4.2 of this Agreement, in which case the
reduction mechanism described in section 4.2(b) shall apply), the Securities
offered by the Stockholder, the Company and any other stockholder that desires
to exercise its piggyback registration rights, if any, shall be excluded from
the offering on a pro rata basis to the extent necessary to reduce the total
amount of Securities to be included in the offering to such an amount as would
not have a material adverse effect on the offering’s success as determined by
the lead managing underwriter in its sole discretion; or

(ii) if the registration of Securities is initiated by the Company and is not
initiated pursuant to any demand registration rights of any stockholder, the
Securities offered by the Stockholder and any other stockholder that desires to
exercise its piggyback registration rights, if any, shall be excluded from the
offering on a pro rata basis to the extent necessary to reduce the total amount
of Securities to be included in the offering to such an amount as would not have
a material adverse effect on the offering’s success as determined by the lead
managing underwriter in its sole discretion.

(c) Stockholder Right to Withdraw. The Stockholder has the right to withdraw all
or any portion of its Registrable Securities from a registration under section
4.4(a) at any time before the effective date of the applicable registration
statement.

(d) Company Right to Withdraw. The Company has the right to withdraw any
registration statement and abandon any proposed offering, subject to section
4.4(a), without the consent of the Stockholder, notwithstanding the request of
the Stockholder to participate therein in accordance with section 4.4(a), if the
Company determines to do so in its sole discretion.

4.5 Additional Company Obligations. Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as is commercially reasonably possible (or within any
more-specific time period this Agreement requires):

(a) at least five Business Days before filing a registration statement,
prospectus or any amendments or supplements thereto, furnish to the Stockholder,
the underwriters, and a single counsel to the Stockholder (which counsel must be
reasonably satisfactory to the Company), copies of the registration statement,
prospectus or any amendments or supplements thereto proposed to be filed. These
documents will be subject to the review of the Stockholder, underwriters and
counsel, and the Company shall use commercially reasonable efforts to take into
account, and, if appropriate, reflect such comments as the Stockholder,
underwriters and counsel may reasonably propose. In addition, promptly after
receipt of any and all transmittal letters and any other correspondence
(including, without limitation, comment letters) from the SEC or any other
governmental entity relating to any such registration statement or amendment or
supplement thereto relating to the sections “Plan of Distribution” or “Selling
Stockholders” (or any such similar provision) the Company shall furnish such
transmittal letters or other correspondence to the Stockholder and the
Stockholder shall have the right to request that the Company modify any such
information contained in such registration statement or amendment or supplement
thereto pertaining to such Stockholder in such sections, and the Company shall
use its commercially best efforts to comply with such request;

(b) prepare and file with the SEC a registration statement with respect to those
Registrable Securities offered pursuant to piggyback registration rights or a
Demand Registration and use its commercially reasonable efforts to cause such
registration statement to become effective, and keep (i) any such piggyback
registration or any such Demand Registration that is an underwritten offering
effective (including, without limitation, by filing any amendments or
supplements to such registration statement or prospectus) until the distribution
contemplated in the registration statement is completed and (ii) any such Demand
Registration that is not an underwritten offering effective (including, without
limitation, by filing any amendments or supplements to such registration
statement or prospectus) for a period of at least 60 days (or such shorter
period during which the distribution contemplated in the registration statement
is completed); provided, however, if the Company exercises its right to defer
the Demand Registration in accordance with section 4.2(c)(i), such 60 day period
shall be extended by the same number of days as the deferral period invoked by
the Company;

(c) prepare and file with the SEC any amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act and the terms hereof with respect to the disposition of all
Securities such registration statement covers and make generally available an
earnings statement satisfying the provisions of section 11(a) of the Securities
Act (except that the Company will be deemed to have complied with this clause if
it has complied with Rule 158 under the Securities Act);

(d) notify the Stockholder promptly and (if requested) confirm such notice in
writing,

(i) when any registration statement, prospectus, prospectus supplement or
post-effective amendment relating to such registration has been filed, and, with
respect to such registration statement or any post-effective amendment, when the
same has become effective,

(ii) of any SEC request for amendments or supplements to such registration
statement or the related prospectus or for additional information regarding the
Stockholder,

(iii) of the SEC’s issuance of any stop order suspending the effectiveness of
such registration statement or the initiation of any proceedings for such
purpose,

(iv) of the Company’s receipt of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose,

(v) of any determination by the Company that any event has occurred that
requires making any changes in such registration statement, prospectus, or
documents incorporated (or deemed to be incorporated) by reference in any of
such documents so that they will not contain any untrue statement of a material
fact or omit to state any material fact that they are required to state or that
is necessary to make the statements in such documents not misleading, and

(vi) of any determination by the Company that any event has occurred that would
cause such registration statement or the prospectus contained therein not to be
usable for resale of the Registrable Securities;

(e) use reasonable best efforts to obtain the withdrawal of any order suspending
the effectiveness of such registration statement, or the lifting of any
suspension of the qualification or exemption from qualification of any
Registrable Securities for sale in any jurisdiction in the United States;

(f) furnish to the Stockholder, the designated counsel for the Stockholder, and
each managing underwriter, if any, without charge, one conformed copy of such
registration statement, as declared effective by the SEC, and of each
post-effective amendment to such registration statement, in each case including
financial statements and schedules, and deliver, without charge, the number of
copies of the preliminary prospectus, any amended preliminary prospectus, each
final prospectus and any post-effective amendment or supplement to any of such
documents, as the Stockholder may reasonably request in order to facilitate its
disposition of the Registrable Securities included in such registration
statement in conformity with the Securities Act’s requirements;

(g) use its reasonable best efforts to register and qualify the Securities such
registration statement covers under all securities laws or blue sky laws of
United States and Canadian jurisdictions that the Stockholder reasonably
requests; provided that the Company will not be required to qualify generally to
do business in any jurisdiction where it is not then so qualified or to take any
action that would subject it to general service of process or taxation in any
such jurisdiction where it is not then so subject;

(h) upon the occurrence of any event contemplated by section 4.5(d)(v) or
4.5(d)(vi), prepare a supplement or post-effective amendment to such
registration statement or the related prospectus or any document incorporated
(or deemed to be incorporated) by reference in such documents and file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Securities being sold under such documents, such documents will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated in such documents or necessary to make the statements
in such documents, in light of the circumstances under which they were made, not
misleading;

(i) use commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC, any applicable securities exchange and the requirements
of the Securities Act;

(j) on or before the registration statement’s effective date, provide the
Company’s transfer agent for the Registrable Securities with printed
certificates for the Registrable Securities that such registration statement
covers in a form eligible for deposit with The Depository Trust Company;

(k) cause all Registrable Securities registered under this Agreement to be
listed on each securities exchange or automated quotation system that similar
Securities are then listed on, and to thereafter comply with all applicable
rules of such securities exchange or automated quotation system so as to permit
the continued listing of such Registrable Securities on such exchange or
automated quotation system;

(l) make available for inspection by the Stockholder, any underwriter
participating in any offering pursuant to such registration statement, the
designated counsel for the Stockholder, any counsel to the underwriters, and any
accountant or other agent retained by the Stockholder or underwriters
(collectively, the “Inspectors”), financial and other records and information,
pertinent corporate documents and properties of any of the Company and its
Affiliates (collectively, the “Records”), as are reasonably necessary to enable
them to exercise their due diligence responsibilities and cause the Company’s
and its Subsidiaries’ officers, directors and employees, and the independent
public accountants of the Company, at reasonably requested times to discuss the
business and affairs of the Company and its Subsidiaries, to supply promptly all
information reasonably requested by any such Inspector in connection with such
registration statement and to otherwise reasonably cooperate in the due
diligence process of the Inspectors; provided, however, that if the Company
determines in good faith that certain Records are confidential and so notifies
the Inspectors in writing, the Company need not disclose such confidential
Records to any Inspector unless the Inspector signs a confidentiality agreement
reasonably satisfactory to the Company, which agreement shall permit the release
of such confidential Records if disclosing such Records is necessary to avoid or
correct a misstatement or omission in such registration statement or so ordered
pursuant to a subpoena or other order from a court of competent jurisdiction;
and

(m) enter into any agreements (including an underwriting agreement in form,
scope and substance as is customary in underwritten offerings, including
customary lock-up provisions) and take all other customary, appropriate and
reasonable actions (including, without limitation, causing appropriate officers
at reasonably requested times to attend and participate in roadshows and other
informational meetings and otherwise assisting at reasonably requested times
with the roadshow and other information meetings) that the managing underwriters
or the Stockholder requests in connection with such agreements in order to
expedite or facilitate the disposition of the Registrable Securities included in
the offering, and in that connection,

(i) use its commercially reasonable efforts to obtain opinions (in form, scope
and substance reasonably satisfactory to the managing underwriters’ counsel) of
the Company’s counsel and updates of such opinions, addressed to each of the
underwriters, as to the matters customarily covered in opinions requested in
underwritten offerings and any other matters those counsel and underwriters
reasonably request,

(ii) use its commercially reasonable efforts to obtain “cold-comfort” letters
and updates of such letters from the Company’s independent certified public
accountants (and, if necessary, any other independent certified public
accountants of any Company Affiliate or of any business the Company owns for
which financial statements and financial data are, or are required to be,
included in the registration statement), addressed to each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in “cold-comfort” letters in connection with underwritten
offerings, and

(iii) if requested and upon entering into any underwriting agreement, provide
indemnification provisions and procedures substantially to the effect included
in section 4.8 with respect to all Persons to be indemnified pursuant to such
section.

The Company shall perform its obligations under this section 4.5(m) at each
closing under the applicable underwriting or similar agreement, or as and to the
extent such agreements require.

4.6 Additional Obligations of the Stockholder. The Company’s obligation to take
any action pursuant to this Agreement with respect to the Registrable Securities
of the Stockholder is conditioned on and the Stockholder agrees as follows:

(a) General. The Stockholder shall (i) furnish the Company information regarding
itself, its Registrable Securities, and its intended method of disposing of
those Registrable Securities as the Company reasonably requests in writing to
allow the Company to effect the registration of the Stockholder’s Registrable
Securities and (ii) take all such action as may be reasonably required in order
not to delay the registration and offering of the Securities by the Company.

(b) Participation in Underwritten Registrations. In connection with any
underwritten offering contemplated hereby, the Stockholder shall have the right
to be a party to the underwriting agreement between the Company and such
underwriters and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of the Stockholder and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such Stockholder. The
Stockholder shall not be required to make any representations or warranties to
or agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Stockholder, such Stockholder’s
Registrable Securities and such Stockholder’s intended method of distribution.

(c) Discontinuation of Sales Upon Certain Events. Upon receipt of any notice
from the Company pursuant to section 4.5(d)(v) or 4.5(d)(vi), the Stockholder
will forthwith discontinue the offer and sale of Registrable Securities pursuant
to the registration statement covering such Registrable Securities until receipt
by the Stockholder and the underwriters of copies of the supplemented or amended
prospectus contemplated by section 4.5(h), or until it is advised in writing by
the Company that the use of the prospectus may be resumed, and, if so directed
by the Company, the Stockholder will, and will request the underwriters to,
deliver to the Company all copies, other than permanent file copies, then in its
or their possession of the most recent prospectus covering such Registrable
Securities at the time of receipt of such notice.

(d) Holdback. Prior to the Piggyback Registration Rights Termination Date, the
Stockholder agrees not to effect any sale (including a sale pursuant to Rule 144
of the Securities Act) of any Securities, before or after the effective date of
a registration statement filed by the Company with the SEC for an underwritten
offering of equity Securities (except for Registrable Securities that are
included in such registration statement pursuant to this Agreement) but only if,
and to the extent that, the managing underwriter for such offering requests.
However, any limits on the Stockholder’s sales (i) shall not be greater in any
way than the limits on the Company’s directors, executive officers and any other
significant stockholders who have purchased Securities of the Company directly
from the Company, (ii) shall expire within 90 days after the offering’s
effective date and (iii) shall not restrict the Stockholder from exercising its
piggy-back registration rights pursuant to section 4.4 hereof. The Stockholder
shall execute and deliver to the managing underwriter any letter or agreement,
which shall be in substantially the same form as to be delivered by the
Company’s directors, executive officers and any applicable significant
stockholders of the Company, that the underwriter may reasonably request to the
foregoing effect. Promptly upon the Stockholder’s request, the Company shall
request the underwriter to waive any such agreement executed by the Stockholder
pursuant to this section 4.6(d). The Company shall cause its officers and
directors to remain subject to any such agreement for so long as the Stockholder
is subject to such agreement. Notwithstanding the foregoing, the Stockholder
agrees not to effect any other sale (including a sale pursuant to Rule 144 of
the Securities Act) of any Securities during the offering of Securities pursuant
to a Demand Registration whether or not the managing underwriter for such
offering so requests.

4.7 Expenses of Registration. The Company shall bear all costs, fees and
expenses (excluding underwriting discounts and commissions applicable to the
Registrable Securities (which discounts and commissions shall be deducted from
any proceeds distributable to the Stockholder) and fees and expenses of separate
counsel for the Stockholder, fees and expenses of any other expert or advisor
retained by or at the request of the Stockholder) incident to its performance of
or compliance with this Agreement, including all registration, filing and
qualification fees (including qualification with state blue sky laws, the New
York Stock Exchange or any other exchange or automated quotation system the
Company’s Securities are then listed on), printers’ fees and fees and expenses
of the Company’s accountants (including the costs of any “cold-comfort” letters)
and fees and expenses of the Company’s counsel.

4.8 Indemnification. The rights and obligations of the Company and the
Stockholder with respect to indemnification for matters set forth in this
section 4 are as follows:

(a) Company’s Indemnification. To the fullest extent permitted by law, the
Company shall indemnify and hold harmless the Stockholder, each underwriter (as
defined in the Securities Act) for the Stockholder, each Person, if any, who
controls the Stockholder or each underwriter within the meaning of the
Securities Act, and each of their respective constituent partners, members,
employees, agents, contractors, officers and directors against any losses,
claims, damages, fines, penalties, assessments by public agencies, settlement,
costs and expenses (including costs of preparation and reasonable attorneys’
fees) and other liabilities (any of the foregoing being a “Loss”) that relate in
any way to any Violation. The Company shall pay to each Person entitled to
indemnification under this section 4.8(a) the amount of Losses they incur as
they incur such Losses. However, the Company will not need to pay any
indemnified Person the amount of (i) Losses that are settlement payments if such
indemnified Person makes the settlement without the Company’s consent (so long
as the Company did not unreasonably withhold its consent), or (ii) Losses to the
extent such Losses arise out of a Violation that occurs because the Company
relied on written information about the indemnified Person that the indemnified
Person furnished to the Company expressly for the Company to use in connection
with the applicable registration or (iii) Losses, in the case of any Person who
participates as an underwriter in the offering or sale of Registrable Securities
or any other Person, if any, who controls such underwriter within the meaning of
the Securities Act, or any constituent partner, member, employee, agent,
contractor, officer or director of any such underwriter, in any such case to the
extent such Losses arise out of such underwriter’s failure to send or give a
copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus.

(b) Stockholder’s Indemnification. In connection with any offering in which
Registrable Securities of the Stockholder are included pursuant to section 4.1,
4.2 or 4.4 hereof, to the fullest extent permitted by law, the Stockholder shall
indemnify and hold harmless the Company, each underwriter (as defined in the
Securities Act), each Person, if any, who controls the Company or underwriter
within the meaning of the Securities Act and each of their respective
constituent partners, members, employees, agents, contractors, officers and
directors against any Losses to the extent such Losses arise out of a Violation
that occurs because the Company relied on written information about the
Stockholder that the Stockholder furnished to the Company expressly for the
Company to use in connection with the applicable registration; provided,
however, that in no event shall the Stockholder be liable pursuant to this
section 4.8(b) for any Losses which, together with all other Losses for which
the Stockholder has provided indemnification pursuant to this section 4.8(b),
are in excess of the net proceeds received by the Stockholder in the transaction
giving rise to such Losses. The Stockholder shall pay each Person entitled to
indemnification under this section 4.8(b) the amount of Losses they incur as
they incur a Loss. However, the Stockholder will not need to pay any indemnified
Person the amount of (i) Losses that are settlement payments if such indemnified
Person makes the settlement without the Stockholder’s consent or (ii) Losses, in
the case of any Person who participates as an underwriter in the offering or
sale of Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, or any constituent
partner, member, employee, agent, contractor, officer or director of any such
underwriter, in any such case to the extent such Losses arise out of such
underwriter’s failure to send or give a copy of the final prospectus, as the
same may be then supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.

(c) Additional Procedures. Promptly after a Person entitled to indemnification
under this section 4.8 receives notice that it might be subject to Losses, such
indemnified Person shall notify the indemnifying Person in writing regarding
such potential Losses. The indemnifying Person will have the right to
participate in, and, jointly with any other indemnifying Person, to assume the
defense against such Losses with one counsel selected by the indemnifying
Person, subject to the consent of the indemnified Person (which shall not be
unreasonably withheld). If a conflict of interest exists or develops that would
prohibit one counsel from representing both the indemnifying Person and the
indemnified Person, then the indemnified Person (together with all other
indemnified Persons that one counsel can represent without a conflict of
interest) will have the right to retain one separate counsel of their own
choosing, with the indemnifying Person paying all the fees and expenses. Except
in the event of a conflict of interest, if the indemnifying Person notifies the
indemnified Person that it has elected, and then promptly begins, to defend the
indemnified Person against Losses, the indemnifying Person will not be liable to
such indemnified Person for any legal expenses such indemnified Person
subsequently incurs in connection with such defense. If the indemnifying Person
elects to assume the defense against any Losses, the indemnifying Person shall
allow the indemnified Person to continue to participate in defending against
such Losses (at the expense of the indemnified Person) if the indemnified Person
so chooses. The indemnified Person’s failure to notify the indemnifying Person
within a reasonable time regarding Losses will not relieve the indemnifying
Person of any liability to the indemnified Person under this section 4.8 except
to the extent such failure to notify materially prejudices the indemnifying
Person’s ability to defend against such Losses. In defending against Losses, an
indemnifying Person shall not consent to entry of any judgment regarding, or
otherwise settle, any claim involving Losses unless (i) the indemnified Person
has approved in writing the judgment or other settlement or (ii) the judgment or
other settlement includes the claimant’s unconditional release of the
indemnified Person from all liability related to the subject matter of that
claim.

(d) Unavailability. If a court of competent jurisdiction holds that the
indemnification under this section 4.8 is unavailable to an indemnified Person
with respect to any Losses, then the indemnifying Person, in lieu of
indemnifying such indemnified Person, shall contribute to the amount the
indemnified Person must pay in connection with such Losses the appropriate
proportion to reflect the indemnifying Person’s relative fault in connection
with such Losses. The indemnifying and indemnified Persons shall determine the
indemnifying Person’s and indemnified Person’s relative fault based on, among
other things, which Person supplied information relating to the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact and the Person’s relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

(e) Conflict With Underwriting Agreement. Notwithstanding anything to the
contrary in section 4.8, to the extent (but only to the extent) that the
underwriting agreement’s provisions on indemnification and contribution conflict
with the provisions of this section 4.8, the underwriting agreement’s provisions
will control.

(f) Survival. The Company’s and the Stockholder’s obligations under this section
4.8 will survive (i) the completion of any offering of Registrable Securities in
a registration statement under this Agreement and (ii) this Agreement’s
termination.

4.9 Rule 144. The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if the Company is not required to
file such reports, it will, upon the request of the Stockholder, make publicly
available other non-confidential information so long as necessary to permit
sales under Rule 144 under the Securities Act), and it will take such other
action as the Stockholder may reasonably request, all to the extent required
from time to time to enable the Stockholder to sell or hedge Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of the
Stockholder, the Company will deliver to the Stockholder a written statement as
to whether it has complied with such requirements.

4.10 Assignment. The Stockholder may assign its rights under this Agreement only
in connection with a Permitted Transfer pursuant to which the assignee executes
a written agreement reasonably satisfactory to the Company whereby the assignee
agrees to assume all of the obligations of such Stockholder hereunder and to be
bound by all of the terms, conditions and restrictions set forth in this
Agreement other than the terms and conditions of section 2 and section 3, other
than section 3.4 and clauses (a) through (c) of section 3.5. The Stockholder’s
assignment of any rights under this section 4.10 will pertain only to the
Registrable Securities that the Stockholder Transfers so that the Stockholder
will retain any rights it held prior to such Transfer under this Agreement with
respect to any Registrable Securities that the Stockholder continues to own.

4.11 Recapitalizations, Exchanges, etc. The provisions of section 4 of this
Agreement shall apply, to the full extent set forth herein with respect to the
Registrable Securities, to any and all shares of equity capital of the Company
or any successor or assign of the Company (whether by merger, consolidation,
sale of assets or otherwise) that may be issued in respect of, in exchange for,
or in substitution of the Registrable Securities, in each case as the amounts of
such securities outstanding are appropriately adjusted for any equity dividends,
stock splits, reverse stock splits, combinations, recapitalizations and the like
occurring after the date of this Agreement.

SECTION 5

MISCELLANEOUS

5.1 Successors and Assigns. Except as may be expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the successors of
each of the Parties hereto. Except as provided in section 4.10, no Party may
otherwise assign or delegate any of its rights or obligations under this
Agreement by operation of law or otherwise (other than as a result of any merger
or consolidation) without the prior written consent of the other Parties, which
consent shall be in the sole and absolute discretion of such other Parties. Any
purported assignment or delegation without such consent shall be void and
ineffective.

5.2 Benefits of Agreement Restricted to Parties. This Agreement is made solely
for the benefit of the Parties, their successors and their permitted assigns and
no other Person (including each Party’s employees, stockholders or
beneficiaries) shall have any right, claim or cause of action under or by virtue
of this Agreement.

5.3 Notices. All notices, requests and other communications (collectively, the
“Notices”) made pursuant to this Agreement shall be in writing and signed and
correctly dated by the Party sending such Notice. All Notices shall be delivered
personally (by courier or otherwise) or by facsimile to the receiving Party at
the applicable address or facsimile set forth below:

If to the Company:

Halliburton Company
1401 McKinney, Suite 2400
Houston, Texas 77010-4035
Attention: Margaret Carriere, Vice President and Secretary
Facsimile: (713) 759-2619

with a copy to:

Baker Botts L.L.P.
910 Louisiana Street
Houston, Texas 77002
Attention: Darrell W. Taylor
Facsimile: (713) 229-2813

and

Halliburton Company
1401 McKinney, Suite 2400
Houston, Texas 77010-4035
Attention: Albert O. Cornelison, Jr., Executive Vice President and General
Counsel
Facsimile: (713) 759-2622

If to the Stockholder:

DII Industries, LLC Asbestos PI Trust
c/o Alan R. Kahn, Managing Trustee
P.O. Box 1107
230 Jack Leg Lane
Bozeman, Montana 59715
Facsimile: (406) 585-8585

With a copy to:

Gibson Dunn & Crutcher LLP
2100 McKinney Avenue, Suite 1100
Dallas, Texas 75201
Attn: Michael A. Rosenthal
Facsimile: (214) 698-3177

Any Notice delivered personally shall be deemed to have been given on the date
it is so delivered, or upon attempted delivery if acceptance of delivery is
refused, and any Notice delivered by facsimile shall be deemed to have been
given on the first Business Day it is received by the addressee (or, if such
Notice is not received during regular business hours of a Business Day, at the
beginning of the next such Business Day). The address and facsimiles set forth
above may be changed by a Party by giving Notice of such change of address or
facsimile in the manner set forth in this section 5.3.

5.4 Severability. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed severed
from this Agreement and every other provision of this Agreement shall remain in
full force and effect. If the economic and legal substance of the rights and
obligations of the Parties are affected in any materially adverse manner as to
any of the Parties and the Parties cannot agree on a lawful substitute
provision, the adversely affected Party shall have the right to terminate this
Agreement immediately upon notice to the other Parties.

5.5 Construction. In construing this Agreement, the following principles shall
be followed: (a) no consideration shall be given to the captions of the
sections, subsections or clauses, which are inserted for convenience in locating
the provisions of this Agreement and not as an aid in construction; (b) no
consideration shall be given to the fact or presumption that any of the Parties
had a greater or lesser hand in drafting this Agreement; (c) the word “includes”
and its syntactic variants mean “includes, but is not limited to” and
corresponding syntactic variant expressions; (d) the plural shall be deemed to
include the singular, and vice versa; (e) references in this Agreement to
sections, Appendices and Exhibits shall be deemed to be references to sections
of, and Appendices and Exhibits to, this Agreement unless the context shall
otherwise require; (f) all Exhibits and Appendices attached to this Agreement
shall be deemed incorporated herein as if set forth in full herein; (g) the
words “hereof”, “herein” and “hereunder” and words of similar import shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement; (h) references to a Person are also to its permitted successors and
permitted assigns; and (i) unless otherwise expressly provided, any agreement,
instrument or statute defined or referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.

5.6 Entire Agreement. This Agreement sets forth the entire agreement and
understanding among the Parties as to the subject matter hereof and merges with
and supercedes all prior discussions, agreements and understandings of every
kind and nature among them.

5.7 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, and all of which when taken together
shall constitute one and the same original document.

5.8 Governing Law. The laws of the State of Delaware shall govern the
construction, interpretation and effect of this Agreement without giving effect
to any conflicts of law principles.

5.9 Transaction Costs. Except as specifically provided otherwise herein, the
Company shall be solely responsible for and bear all costs, fees and expenses
incurred by the Parties in connection with preparation, execution and delivery
of this Agreement and any amendment, modification or supplement hereto.

5.10 Amendment. All waivers, modifications, amendments or alterations of this
Agreement shall require the written approval of each of the Parties. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including any investigation by or on behalf of any Party, shall be deemed to
constitute a waiver by the Party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein. The
waiver by any Party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.

5.11 Specific Performance. Each Party agrees that the other Parties would be
irreparably damaged if for any reason such Party fails to perform any of such
Party’s obligations under this Agreement, and that the other Parties would not
have an adequate remedy at law for money damages in such event. Accordingly, the
other Parties shall be entitled to seek specific performance and injunctive and
other equitable relief to enforce the performance of this Agreement by such
Party. This provision is without prejudice to any other rights that the Parties
may have against any other Party for any failure to perform its obligations
under this Agreement.

        

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5.12 Jurisdiction; Consent to Service of Process; Waiver. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY PARTY OR ANY DISPUTE UNDER, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT IN THE FEDERAL OR STATE COURTS
OF THE STATE OF DELAWARE, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
OF THE PARTIES ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT (AS FINALLY ADJUDICATED) RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES SHALL APPOINT THE
CORPORATION TRUST COMPANY, THE COMPANY SERVICE CORPORATION OR A SIMILAR ENTITY
(THE “AGENT”) AS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF PROCESS IN ANY
PROCEEDING IN ANY SUCH COURT IN THE STATE OF DELAWARE, AND EACH OF THE PARTIES
SHALL MAINTAIN THE APPOINTMENT OF SUCH AGENT (OR A SUBSTITUTE AGENT) FROM THE
DATE HEREOF UNTIL THE TERMINATION OF THIS AGREEMENT AND SATISFACTION OF ALL
OBLIGATIONS HEREUNDER. THE FOREGOING CONSENTS TO JURISDICTION AND APPOINTMENTS
OF AGENT TO RECEIVE SERVICE OF PROCESS SHALL NOT CONSTITUTE GENERAL CONSENTS TO
SERVICE OF PROCESS IN THE STATE OF DELAWARE FOR ANY PURPOSE EXCEPT AS PROVIDED
ABOVE AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER THAN THE
PARTIES. EACH PARTY HEREBY WAIVES ANY OBJECTION IT MAY HAVE BASED ON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NONCONVENIENS.

5.13 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY AND INTENTIONALLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING UNDER, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.

5.14 Further Assurances. From time to time, at the request of any other Party,
each Party shall execute and deliver or cause to be executed and delivered such
additional documents and instruments and take all such further action as may be
necessary or desirable to consummate the transactions contemplated by this
Agreement.

5.15 Confidentiality. The Stockholder agrees that any notice given by the
Company pursuant to section 4.1(b)(i) or section 4.2(c)(i) or any other
provision of this Agreement shall be confidential, and the Stockholder will not,
and will direct and cause its Affiliates not to, disclose to any Person that
such a notice has been received or the information contained in such notice,
except that the Stockholder may disclose to its or its Affiliates’ directors,
officers, employees, representatives, advisors or agents who need to know that
such a notice has been received or the information contained in any such notice
for the purpose of assisting or advising the Stockholder (the Persons to whom
disclosure is permitted being hereafter collectively called the
“Representatives”). The Stockholder will cause each such Representative to be
informed of the confidential nature of the notice and the information contained
in such notice and will direct each such Representative to treat such
information confidentially in accordance with the terms of this section 5.15.
The Stockholder agrees to be responsible for any noncompliance with the
provisions of this section 5.15 by its Representatives.

[signature pages follow]

        

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IN WITNESS WHEREOF, this Stockholder Agreement has been executed on behalf of
each of the Parties by their respective officers thereunto duly authorized,
effective as of the date first written above.

 
HALLIBURTON COMPANY,
a Delaware corporation

/s/ Albert O. Cornelison, Jr.    
Albert O. Cornelison, Jr.
Executive Vice President

        

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DII INDUSTRIES, LLC ASBESTOS PI TRUST

/s/ Alan R. Kahn            
Alan R. Kahn
Managing Trustee

        

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STOCKHOLDER

 
Shares Beneficially Owned at
Time of Execution
 
Stockholder
 
Original
    Common Stock
 
DII Industries, LLC Asbestos PI Trust
59,500,000

 

     

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APPENDIX A
TO
STOCKHOLDER AGREEMENT

DEFINITIONS

“Affiliate” shall mean any Person that directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified. For purposes of this definition, the term “control”
shall have the meaning set forth in 17 CFR 230.405 as in effect on the date
hereof.

“Agent” shall have the meaning set forth in section 5.12.

“Agreed Volume Limitations” shall mean:

(i) with respect to the first six months after the Funding Date, the Stockholder
may Transfer five million Subject Shares in the first Three-Month Period and the
Stockholder may Transfer 10 million Subject Shares in the second Three-Month
Period;

(ii) with respect to the third, fourth, fifth, sixth, seventh and eighth
Three-Month Periods, the Stockholder may Transfer so many Subject Shares as
would be permitted pursuant to Rule 144(e) under the Securities Act (as
currently in effect) without regard to the Subject Shares Transferred in
accordance with clause (i) above, whether or not Rule 144(e) is applicable, and
whether or not the other conditions set forth in Rule 144 are satisfied; and

(iii) with respect to any period after the second anniversary of the Funding
Date, the Stockholder may Transfer an unlimited amount of Subject Shares;
provided, however, that with respect to any Transfer pursuant to a Hedging
Transaction, only the amount (the “Hedging Sale Amount”) of Subject Shares equal
to the product of (x) the Initial Delta multiplied by (y) the amount of Subject
Shares Transferred in connection with such Hedging Transaction shall be subject
to the Agreed Volume Limitations set forth in clauses (i) and (ii) of this
definition. In the event that the Company shall at any time or from time to
time, after the date hereof (A) make a dividend or distribution on the
outstanding shares of Common Stock payable in Securities, (B) subdivide the
outstanding shares of Common Stock into a larger number of shares, (C) combine
the outstanding shares of Common Stock into a smaller number of shares or (D)
issue any Securities in a reclassification of the Common Stock, then, and in
each such case, the Agreed Volume Limitation set forth in clause (i) of this
definition shall be adjusted accordingly.

“Agreement” shall have the meaning set forth in the preamble.

“Beneficially Own”: A Person shall be deemed to “beneficially own,” or to have
“beneficial ownership” of, any securities of the Company (which securities shall
also be deemed “beneficially owned” by such Person) that such Person is deemed
to “beneficially own” within the meaning of Rule l3d-3 under the Exchange Act.

“Board of Directors” shall mean the Board of Directors of the Company and any
duly authorized committee thereof.

“Business Day” shall mean any day on which the New York Stock Exchange, Inc. is
open for trading.

“Combined Voting Power” shall mean the aggregate votes entitled to be cast
generally in the election of the board of directors, or similar managing group,
of a corporation or other entity by holders of then outstanding Voting
Securities of such corporation or other entity.

“Common Stock” shall mean the common stock, par value, $2.50 per share, of the
Company.

“Company” shall mean Halliburton Company, a Delaware corporation, or any
Surviving Entity.

        

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“Continuing Directors” shall mean, as of any date of determination, any member
of the Board of Directors who (i) was a member of the Board of Directors on the
date of this Agreement or (ii) was nominated for election to the Board of
Directors with the affirmative vote of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination, or
was elected or appointed by the affirmative vote of a majority of such
Continuing Directors.

“Demand Registration” shall have the meaning set forth in section 4.2(a).

“Demand Registration Rights Termination Date” shall mean the date upon which the
Stockholder and its Affiliates hold of record less than 5 million Subject
Shares.

“Demand Request” shall have the meaning set forth in section 4.2(a).

“Effectiveness Period” shall have the meaning set forth in section 4.1(a).

“Exchange Act” shall mean the Securities and Exchange Act of 1934 as amended,
and the SEC’s rules and regulations promulgated thereunder.

“Funding Date” shall mean the date that the Stockholder first becomes holder of
record of the Subject Shares.

“Hedging Sale Amount” shall have the meaning set forth in the definition of
Agreed Volume Restrictions.

“Hedging Transaction” means any transaction involving a security linked to the
Registrable Securities or any security that would be deemed to be a “derivative
security” (as defined in Rule 16a-1(c) under the Exchange Act) with respect to
the Registrable Security or transaction (even if not a security) which would
(were it a security) be considered such a derivative security, or which
transfers some or all of the economic risk of ownership of the Registrable
Securities, including, without limitation, any forward contract, equity swap,
put or call, put or call equivalent position, collar, non-recourse loan, sale of
exchangeable security or similar transaction.

“Initial Delta” means the quotient of (i) the difference between (x) the fair
market value of a Hedging Transaction assuming a 0.5% increase in the price per
share of the Subject Shares from the Initial Prevailing Price and (y) the fair
market value of a Hedging Transaction assuming a 0.5% decrease in the price per
share of the Subject Shares from the Initial Prevailing Price, divided by (ii)
the product of (A) the amount of the Subject Shares Transferred in connection
with such Hedging Transaction multiplied by (B) 1% of the Initial Prevailing
Price. The quotient set forth in the preceding sentence shall be calculated and
reported by the market maker who executes the Hedging Transaction on the date
the Hedging Transaction is entered into.

“Initial Prevailing Price” means the price per share of the Subject Shares on
the date and time the Hedging Transaction is entered into, as reported by the
market maker who executes the Hedging Transaction.

“Inspectors” shall have the meaning set forth in section 4.5(1).

“Loss” shall have the meaning set forth in section 4.8(a).

“Market Value” shall be computed by multiplying the number of shares of Common
Stock proposed to be offered in any Demand Registration for the account of the
Stockholder by the average Trading Price of the Common Stock for the ten trading
days prior to the day of the related Demand Request.

“Notices” has the meaning set forth in section 5.3.

“Party” shall mean the Company and the Stockholder.

“Penalty Average Weekly Trading Volume” shall mean the highest average weekly
trading volume of the Common Stock reported through the consolidated transaction
reporting system contemplated by Rule 11Aa3-1 under the Exchange Act for any
four-week period in the applicable period set forth in section
4.1(c)(iii)(C)-(D).

“Penalty Interest” shall have the meaning set forth in section 4.1(c).

“Penalty Rate” shall have the meaning set forth in section 4.1(c)(ii).

“Permitted Transfer” shall mean any Transfer of at least five million
Registrable Securities in accordance with section 3.1.

“Person” shall mean any individual, group, corporation, firm, partnership, joint
venture, trust, business association, organization, governmental entity or other
entity.

“Piggyback Registration Rights Termination Date” shall mean the date upon which
the Stockholder and its Affiliates hold of record less than 1 million Subject
Shares.

“Preliminary Restriction Period” shall mean the first 365 calendar days
following the Funding Date.

“Preliminary Termination Date” shall mean the date upon which the Stockholder
and its Affiliates hold of record less than 10 million Subject Shares.

“Records” shall have the meaning set forth in section 4.5(l).

“register,” “registered,” and “registration” refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act, and the SEC’s declaration or ordering of effectiveness
of that registration statement or document.

“Registrable Securities” shall mean the Subject Shares; provided, however, that
the Subject Shares shall be treated as Registrable Securities only if and only
for so long as they are held by the Stockholder pursuant to the terms hereof or
have been Transferred in a Permitted Transfer, but not otherwise, and (i) they
have not been disposed of pursuant to a registration statement declared
effective by the Commission, so that all transfer restrictions and restrictive
legends with respect thereto are removed upon the consummation of such sale, or
(ii) they have not been sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act, so that all transfer
restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale, or (iii) the registration rights as to the
Stockholder of such Registrable Securities have not expired pursuant to section
4.

“Representatives” shall have the meaning set forth in section 5.15.

“Restructuring Transaction” shall mean any merger, consolidation or
recapitalization of the Company (or, if the capital stock of the Company is
affected, any Subsidiary of the Company), or any sale, lease, or other transfer
(in one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the
Company.

“SEC” shall mean the United States Securities and Exchange Commission.

“Securities” shall mean all of the Company’s capital stock and other authorized
or outstanding options, offers, warrants, calls, subscriptions, rights,
convertible notes or other securities (whether debt, equity, or a combination of
debt and equity), as defined in the Securities Act, issued by the Company.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations thereunder.

“Share Amount” shall have the meaning set forth in section 4.1(c)(iii).

“Shelf Registration” shall have the meaning set forth in section 4.1(a).

“Shelf Registration Statement” shall have the meaning set forth in section
4.1(a).

“Stockholder” shall mean the DII Industries, LLC Asbestos PI Trust.

“Subject Shares” shall mean any shares of Common Stock acquired by the
Stockholder on or after the Funding Date, together with any Securities issued as
a dividend or other distribution with respect to, in exchange for, upon the
conversion of or in replacement of such Common Stock, each until sold in
accordance with the terms of this Agreement.

“Subsidiary” shall mean, with respect to any Party, any Person of which such
Party, either directly or indirectly, owns 50% or more of the equity or voting
interests.

“Surviving Entity” shall mean an ultimate parent corporation or other entity
with a class of equity securities registered under section 12 of the Exchange
Act and resulting from any Restructuring Transaction of the Company where (x)
the stockholders of the Company immediately prior to such Restructuring
Transaction beneficially own, immediately after such Restructuring Transaction,
directly or indirectly, shares or other ownership interests representing in the
aggregate more than 50% of (a) the then outstanding common stock or other equity
interests of the such Surviving Entity and (b) the Combined Voting Power of the
then outstanding Voting Securities of the Surviving Entity or (y) the Continuing
Directors at the time of the initial approval of such Restructuring Transaction
by the board of directors would immediately after such Restructuring Transaction
constitute a majority of the Board of Directors, or similar managing group, of
the Surviving Entity.

“Termination Date” has the meaning set forth in section 1.1.

“Three-Month Period” means any three-month period successively following the
Funding Date.

“Trading Price” for any date shall mean the closing price of the Common Stock,
as published in The Wall Street Journal on such date.

“Transfer” and its syntactic variants shall mean, with respect to any Subject
Share, to directly or indirectly (whether or not through an underwriter), offer,
sell, convey, distribute, transfer (by merger or otherwise), assign, devise,
exchange, encumber, gift, pledge, grant any option with respect to, hypothecate
or otherwise dispose of such Subject Share, or enter into any agreement,
arrangement or understanding with respect to the foregoing.

“Violation” shall mean (i) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement that includes Registrable
Securities, including any preliminary prospectus or final prospectus contained
in that registration statement or any amendments or supplements to that
registration statement or prospectus or (ii) the omission or alleged omission to
state in that registration statement a material fact (A) required to be stated
in it or (B) necessary to make the statements in that registration statement in
light of the circumstances in which they were made not misleading.

“Voting Securities” shall mean all securities of a corporation or other entity
having the right to vote in an election of the board of directors, or similar
managing group, of such corporation or other entity, whether at all times or
only so long as no senior class of securities of such corporation or other
entity has such voting power by reason of any contingency.

 

     

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EXHIBIT A

FORM OF COMPLIANCE CERTIFICATE

TO:
Halliburton Company
 
1401 McKinney, Suite 2400
 
Houston, Texas 77010-4035
 
Attention: Vice President and Secretary
 
Facsimile: 713-759-2619
 
FROM:
 
The Trustees of the DII Industries, LLC Asbestos PI Trust (the “Stockholder”)
 
DATE:
 
               , 20    
 
RE:
Transfer of Subject Shares pursuant to the Stockholder Agreement dated as
of January 20, 2005 between Halliburton Company, a Delaware corporation (the
“Company”), and the Stockholder as defined therein (the “Stockholder
Agreement”).

This compliance certificate (this “Certificate”) is delivered to the Company
pursuant to section 3.2 of the Stockholder Agreement. Capitalized terms used
herein but not defined herein have the meanings set forth in the Stockholder
Agreement.

The undersigned Stockholder hereby represents and warrants that its Transfers of
Subject Shares during the Three-Month Period ended on                   , 20    
(the “Quarter”) were in compliance with section 3.1(b) of the Stockholder
Agreement.

1. Number of Subject Shares Transferred Pursuant to the Shelf Registration or in
Privately Negotiated Transactions: (if applicable)

Subject Shares were Transferred pursuant to the Shelf Registration during the
Quarter, of which                             Subject Shares were Transferred in
non-Hedging Transactions and                             Subject Shares
constituted the Hedging Sale Amount with respect to Hedging Transactions entered
into during the Quarter.

Subject Shares were Transferred pursuant to privately negotiated transactions or
series of related transactions that were exempt from the registration
requirements of the Securities Act during the Quarter, of which
                            Subject Shares were Transferred in non-Hedging
Transactions and                             Subject Shares constituted the
Hedging Sale Amount with respect to Hedging Transactions entered into during the
Quarter.

        

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2. Transferees in Privately Negotiated Transactions: (if applicable)

The name, address, amount of Subject Shares transferred and date of transfer to
each transferee pursuant to a privately negotiated transaction or series of
related transactions that was exempt from the registration requirements of the
Securities Act during the Quarter is set forth below; provided, however, that
with respect to any transfer in connection with a Hedging Transaction, set forth
below is (a) the name and address of the market maker of such Hedging
Transaction and (b) the Hedging Sale Amount:

 
(name)
     
(address and contact information)
 

  Subject Shares were Transferred to such transferee during the Quarter (to be
filled in for each non-Hedging Transaction).

  Subject Shares constituted the Hedging Sale Amount with respect to the Hedging
Transaction entered into with such market maker during the Quarter (to be filled
in for each Hedging Transaction).
 

The date of such Transfer was , 20 .
 
(name)
     
(address and contact information)

Subject Shares were Transferred to such transferee during the Quarter (to be
filled in for each non-Hedging Transaction).

Subject Shares constituted the Hedging Sale Amount with respect to the Hedging
Transactions entered into with such market maker during the Quarter (to be
filled in for each Hedging Transaction).

The date of such Transfer was  , 20 .
 
Alan R. Kahn
Managing Trustee on behalf of the DII Industries, LLC Asbestos PI Trust

 

     

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EXHIBIT B

FORM OF “PLAN OF DISTRIBUTION”

A selling stockholder may also enter into hedging and/or monetization
transactions. For example, a selling stockholder may:

(a) enter into transactions with a broker-dealer or affiliate of a broker-dealer
or other third party in connection with which that other party will become a
selling stockholder and engage in short sales of the common stock under this
prospectus, in which case the other party may use shares of common stock
received from the selling stockholder to close out any short positions;

(b) itself sell short common stock under this prospectus and use shares of
common stock held by it to close out any short positions;

(c) enter into options, forwards or other transactions that require the selling
stockholder to deliver, in a transaction exempt from registration under the
Securities Act, common stock to a broker-dealer or an affiliate of a
broker-dealer or other third party who may then become a selling stockholder and
publicly resell or otherwise transfer that common stock under this prospectus;
or

(d) loan or pledge common stock to a broker-dealer or affiliate of a
broker-dealer or other third party who may then become a selling stockholder and
sell the loaned shares or, in an event of default in the case of a pledge,
become a selling stockholder and sell the pledged shares, under this prospectus.

 

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