Baker Hughes 2009 Annual Report Download - page 45

2009 Proxy Statement 35
d. continuation of accident and health insurance benefits for
an additional three years(2);
e. a lump sum payment equal to the sum of (i) the cost of the
Senior Executive’s perquisites in effect prior to his termination
of employment for the remainder of the calendar year and
(ii) the cost of the Senior Executive’s perquisites in effect prior
to his termination of employment for an additional three years;
f. a lump sum payment equal to the undiscounted value of
the benefits the Senior Executive would have received had
he continued to participate in the Thrift Plan, the Pension
Plan and the SRP for an additional three years, assuming
for this purpose that:
(1) the Senior Executive’s compensation during that three-
year period were his Highest Base Salary and Highest
Bonus Amount, and
(2) the Senior Executive’s contributions to and accruals
under those plans remained at the levels in effect as of
the date of the Change in Control or the date of termi-
nation, whichever is greater;
g. eligibility for our retiree medical program if the Senior
Executive would have become entitled to participate in
that program had he remained employed for an additional
three years(3);
(2) The value of this benefit is calculated (i) for the first 18 months of continua-
tion coverage as the aggregate premium amounts the NEO would be required
to pay for such coverage under the Company’s premium rate structure in
effect on December 31, 2009 for continuation coverage under COBRA minus
the aggregate premium amounts he would be required to pay for such cover-
age under the Change in Control Agreement and (ii) for the remaining 18
months of continuation coverage as the value of such medical benefit cover-
age utilizing the assumptions applied under FASB ASC Topic 715, Compensa-
tion–Retirement Benefits.
(3) The value of this benefit is the aggregate value of the medical coverage utiliz-
ing the assumptions applied under FASB ASC Topic 715, Compensation–
Retirement Benefits.
h. a lump sum payment equivalent to 36 multiplied by the
monthly basic life insurance premium applicable to the
Senior Executive’s basic life insurance coverage on the date
of termination;
i. a lump sum payment of $30,000 for outplacement services;
j. an additional amount (a “gross-up” payment) in respect of
excise taxes that may be imposed under the “golden para-
chute” rules on payments and benefits received in connection
with the Change in Control. The gross-up payment would
make the officer whole for excise taxes (and for all taxes on
the gross-up payment) in respect of payments and benefits
received pursuant to all the Company’s plans, agreements
and arrangements (including for example, acceleration of
vesting of equity awards); and
k. a lump sum payment equal to the amount of interest that
would be earned on any of the foregoing payments subject
to a six-month payment delay under Section 409A using the
six-month London Interbank Offered Rate plus two percent-
age points.
We (or our successor) must also reimburse the Senior
Executive for any legal fees and expenses incurred by him
(i) in disputing in good faith any issue relating to his termina-
tion of employment, (ii) in seeking in good faith to enforce the
Change in Control Agreement or (iii) in connection with any
tax audit or proceeding relating to the application of parachute
payment excise taxes to any payment or benefit under the
Change in Control Agreement.