Baker Hughes 2004 Annual Report Download - page 116

Equity฀Compensation฀Plan฀Information
The฀information฀in฀the฀following฀table฀is฀presented฀as฀of฀December฀31,฀2004฀with฀respect฀to฀shares฀of฀our฀Common฀Stock฀that฀
may฀be฀issued฀under฀our฀existing฀equity฀compensation฀plans,฀including฀the฀Baker฀Hughes฀Incorporated฀1993฀Stock฀Option฀Plan,฀the฀
Baker฀Hughes฀Incorporated฀Long-Term฀Incentive฀Plan฀and฀the฀Baker฀Hughes฀Incorporated฀2002฀Directors฀&฀Officers฀Long-Term฀
Incentive฀Plan,฀all฀of฀which฀have฀been฀approved฀by฀our฀stockholders.
฀ ฀ (In฀millions฀of฀shares)฀
฀ ฀ ฀ Number฀of฀Securities฀฀
฀ Number฀of฀Securities฀to฀be฀Issued฀ Weighted-Average฀ Remaining฀Available฀for฀Future฀฀
฀฀ Upon฀Exercise฀of฀Outstanding฀ Exercise฀Price฀of฀Outstanding฀฀ Issuance฀Under฀Equity฀Compensation฀Plans฀฀
Equity฀Compensation฀Plan฀Category฀ Options,฀Warrants฀and฀Rights฀ Options,฀Warrants฀and฀Rights฀ (excluding฀securities฀reflected฀in฀the฀first฀column)
Stockholder-approved฀plans฀฀
฀ (excluding฀Employee฀Stock฀Purchase฀Plan)฀ 4.4(2)฀ $฀ 36.95฀ 4.8฀
Nonstockholder-approved฀plans(1)฀ 5.8฀ ฀ 36.63฀ 7.8
Subtotal฀(except฀for฀weighted฀average฀exercise฀price)฀ 10.2฀ ฀ 36.76฀ 12.6
Employee฀Stock฀Purchase฀Plan฀ –฀ (3)฀ 4.1
Total฀ 10.2(4)฀ ฀ ฀ 16.7
(1)฀ The฀table฀includes฀the฀nonstockholder-approved฀plans:฀the฀1998฀Employee฀Stock฀Option฀Plan,฀the฀1998฀Special฀Employee฀Stock฀Option฀Plan,฀the฀2002฀Employee฀Long-
Term฀Incentive฀Plan฀and฀the฀Director฀Compensation฀Deferral฀Plan.฀A฀description฀of฀each฀of฀these฀plans฀is฀set฀forth฀below.
(2)฀ The฀table฀includes฀approximately฀0.9฀million฀shares฀of฀our฀Common฀Stock฀that฀would฀be฀issuable฀upon฀the฀exercise฀of฀the฀outstanding฀options฀under฀our฀1993฀Stock฀
Option฀Plan,฀which฀expired฀in฀2003.฀No฀additional฀options฀may฀be฀granted฀under฀the฀1993฀Stock฀Option฀Plan.
(3)฀ In฀the฀Baker฀Hughes฀Incorporated฀Employee฀Stock฀Purchase฀Plan,฀the฀purchase฀price฀is฀determined฀in฀accordance฀with฀Section฀423฀of฀the฀Code,฀as฀amended,฀as฀85%฀
of฀the฀lower฀of฀the฀fair฀market฀value฀on฀the฀date฀of฀grant฀or฀the฀date฀of฀purchase.฀
(4)฀ The฀table฀does฀not฀include฀shares฀subject฀to฀outstanding฀options฀we฀assumed฀in฀connection฀with฀certain฀mergers฀and฀acquisitions฀of฀entities฀which฀originally฀granted฀
those฀options.฀When฀we฀acquired฀the฀stock฀of฀Western฀Atlas฀Inc.฀in฀a฀transaction฀completed฀in฀August฀1998,฀we฀assumed฀the฀options฀granted฀under฀the฀Western฀
Atlas฀Director฀Stock฀Option฀Plan฀and฀the฀Western฀Atlas฀1993฀Stock฀Incentive฀Plan.฀As฀of฀December฀31,฀2004,฀68,171฀shares฀and฀3,836฀shares฀of฀our฀Common฀Stock฀
would฀be฀issuable฀upon฀the฀exercise฀of฀outstanding฀options฀previously฀granted฀under฀the฀Western฀Atlas฀Director฀Stock฀Option฀Plan฀and฀the฀Western฀Atlas฀1993฀Stock฀
Incentive฀Plan,฀with฀a฀weighted฀average฀exercise฀price฀per฀share฀of฀$22.54฀and฀$26.07,฀respectively.
Our฀nonstockholder-approved฀plans฀are฀described฀below:
1998฀Employee฀Stock฀Option฀Plan
The฀Baker฀Hughes฀Incorporated฀1998฀Employee฀Stock฀
Option฀Plan฀(the฀“1998฀ESOP”)฀was฀adopted฀effective฀as฀of฀
October฀1,฀1998.฀The฀number฀of฀shares฀authorized฀for฀issu-
ance฀under฀the฀1998฀ESOP฀is฀3.5฀million฀shares.฀Nonqualified฀
stock฀options฀may฀be฀granted฀under฀the฀1998฀ESOP฀to฀our฀
employees.฀The฀exercise฀price฀of฀the฀options฀will฀be฀equal฀to฀
the฀fair฀market฀value฀per฀share฀of฀our฀Common฀Stock฀on฀the฀
date฀of฀grant,฀and฀option฀terms฀may฀be฀up฀to฀ten฀years.฀Under฀
the฀terms฀and฀conditions฀of฀the฀option฀award฀agreements฀for฀
options฀issued฀under฀the฀1998฀ESOP,฀options฀generally฀vest฀
and฀become฀exercisable฀in฀installments฀over฀the฀optionee’s฀
period฀of฀service,฀and฀the฀options฀vest฀on฀an฀accelerated฀basis฀
in฀the฀event฀of฀a฀change฀in฀control.฀As฀of฀December฀31,฀2004,฀
options฀covering฀approximately฀1.5฀million฀shares฀of฀our฀Com-
mon฀Stock฀were฀outstanding฀under฀the฀1998฀ESOP,฀options฀
covering฀approximately฀1.4฀million฀shares฀were฀exercised฀dur-
ing฀fiscal฀year฀2004฀and฀approximately฀0.3฀million฀shares฀
remained฀available฀for฀future฀options.
1998฀Special฀Employee฀Stock฀Option฀Plan
The฀Baker฀Hughes฀Incorporated฀1998฀Special฀Employee฀
Stock฀Option฀Plan฀(the฀“1998฀SESOP”)฀was฀adopted฀effective฀
as฀of฀October฀22,฀1997.฀The฀number฀of฀shares฀authorized฀for฀
issuance฀upon฀the฀exercise฀of฀options฀granted฀under฀the฀1998฀
SESOP฀is฀2.5฀million฀shares.฀Under฀the฀1998฀SESOP,฀the฀Com-
pensation฀Committee฀of฀our฀Board฀of฀Directors฀has฀the฀
authority฀to฀grant฀nonqualified฀stock฀options฀to฀purchase฀
shares฀of฀our฀Common฀Stock฀to฀a฀broad-based฀group฀of฀
employees.฀The฀exercise฀price฀of฀the฀options฀will฀be฀equal฀to฀
the฀fair฀market฀value฀per฀share฀of฀our฀Common฀Stock฀at฀the฀
time฀of฀the฀grant,฀and฀option฀terms฀may฀be฀up฀to฀ten฀years.฀
Stock฀option฀grants฀of฀100฀shares,฀with฀an฀exercise฀price฀of฀
$47.813฀per฀share,฀were฀issued฀to฀all฀of฀our฀U.S.฀employees฀
in฀October฀1997฀and฀to฀our฀international฀employees฀in฀May฀
1998.฀As฀of฀December฀31,฀2004,฀options฀covering฀approxi-
mately฀1.2฀million฀shares฀of฀our฀Common฀Stock฀were฀out-
standing฀under฀the฀1998฀SESOP,฀no฀options฀were฀exercised฀
during฀fiscal฀year฀2004฀and฀approximately฀1.2฀million฀shares฀
remained฀available฀for฀future฀options.
66฀฀฀฀฀Baker฀Hughes฀Incorporated