Baker Hughes 2009 Annual Report Download - page 50

40 Baker Hughes Incorporated
If Mr. O’Donnell had terminated employment with us
on December 31, 2009 due to retirement his options to pur-
chase an aggregate of 34,343 of our shares, with a value
of $40.48 per share would have become fully exercisable on
December 31, 2009. Under the terms of Mr. O’Donnell’s stock
options, he would have to pay an aggregate of $1,495,186 to
purchase these shares. Mr. O’Donnell’s options with respect to
26,903 of our shares were in-the-money (per share stock
value greater than per share exercise price) as of December 31,
2009. The maximum value of the accelerated vesting of these
in-the-money options would have been $146,194 ($40.48 per
share value on December 31, 2009), multiplied by 26,903 of
our shares subject to the options minus $942,839, the aggre-
gate exercise price for the options).
Full Vesting of Stock Options Upon Termination
of Employment Due to Death or Disability of the
Senior Executive
If the Senior Executive had terminated employment on
December 31, 2009, due to the disability of the Senior Execu-
tive (as determined by the 2002 D&O Plan committee) or due
to the death of the Senior Executive, all of the Senior Execu-
tive’s then outstanding stock options granted by us would
have become fully vested and exercisable. For each Senior
Executive, the number of our shares for which stock options
would have become fully exercisable and the value of the
accelerated vesting of the options if on December 31, 2009
the Senior Executive terminated employment with us due to
his death or disability is specified above under the heading
“Full Vesting of Stock Options Upon a Change in Control”.
Performance Unit Awards
Pro Rata Payment of Performance Unit Awards
Upon a Change in Control
If a 2002 Change in Control were to have occurred on
December 31, 2009, prior to the Senior Executive’s termination
of employment with us, we, or our successor, would have paid
the Senior Executive, in cash, an amount equal to $100 multi-
plied by the number of performance units specified in the Senior
Executive’s performance unit award agreement, multiplied by
the number of days during the performance period through
December 30, 2009 divided by the number of days during the
performance period. The amounts we or our successor would
have paid are $5,782,548, $1,769,741, $1,297,829, $1,258,406,
and $551,735 for Messrs. Deaton, Ragauss, Crain, Craighead
and O’Donnell, respectively.
Mr. Barr retired from the Company on April 30, 2009
and accordingly would not receive any amounts under his
performance unit awards as a result of a change of control.
As discussed below under the heading “Retirement Agreement
With David H. Barr”, we did agree to vest certain of Mr. Barr’s
performance units in connection with his retirement.
Pro Rata Payment of Performance Unit Awards Upon
Termination of Employment by the Senior Executive for
Good Reason or By Us Without Cause in Connection
with a Potential Change in Control
If on December 31, 2009, (i) we terminated the employment
of a Senior Executive without cause (within the meaning of the
2002 D&O Plan) prior to a 2002 D&O Plan Change in Control,
or (ii) the Senior Executive terminated his employment with us
for good reason (within the meaning of the 2002 D&O Plan)
and, in the case of (i) or (ii), the circumstance or event occurred
at the request or direction of the person who entered into an
agreement with us the consummation of which would consti-
tute such a change in control or is otherwise in connection
with or in anticipation of such a change in control, we would
have paid the Senior Executive, in cash, an amount equal to
$100 multiplied by the number of performance units specified
in the Senior Executive’s performance unit award agreement,
multiplied by the number of days during the performance
period through December 30, 2009 divided by the number
of days during the performance period.
The amounts we would have paid the Senior Executives
are specified above under the heading “Pro Rata Payment of
Performance Unit Awards Upon a Change in Control”.
Pro Rata Payment of Performance Unit Awards Upon
the Senior Executive’s Termination of Employment Due
to His Disability or His Death
If the Senior Executive had terminated employment with
us on December 31, 2009 due to disability or death prior to
the last day of the performance period we would have paid
him in a single sum in cash an amount equal to $100 multi-
plied by the number of performance units specified in the
Senior Executive’s performance unit award agreement, multi-
plied by the number of days during the performance period
through December 31, 2009, divided by the number of days
during the performance period.
The Senior Executive is treated as having incurred a disability
for this purpose if he (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less
than 12 months, or (ii) is by reason of any medically determin-
able physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous
period of not less than 12 months receiving income replace-
ment benefits for a period of not less than three months
under our accident and health plan.
If the Senior Executives had terminated employment with
us on December 31, 2009 due to disability or death we would
have paid, in single sums in cash, $5,790,245, $1,772,115
$1,299,557, $1,260,215 and $552,501 for Messrs. Deaton,
Ragauss, Crain, Craighead and O’Donnell, respectively.