Baker Hughes 2010 Annual Report Download - page 44

32 B a k e r H u g h e s I n c o r p o r a t e d
• a lump-sum payment of $30,000 for outplacement services;
and
• 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.
Payments Upon Termination of Employment
in Connection With the Sale of a Business Unit
If (i) on December 31, 2010 we or one of our affiliates
sold a business unit, (ii) on December 31, 2010 the Senior
Executive’s employment with us terminated in connection with
the sale, and (iii) the sale did not constitute a Change in Con-
trol, he would receive the following:
• a pro rata portion of the Senior Executive’s then outstanding
restricted stock awards granted by us would have become
vested and nonforfeitable. The forfeiture restrictions would
have lapsed as to that number of shares of restricted stock
that were subject to forfeiture restrictions on December 31,
2010, multiplied by the applicable reduction factor, the
number of days during the period commencing on the date
of grant of the award and ending on December 31, 2010,
divided by the number of days the Senior Executive would
be required to work to achieve full vesting under the normal
vesting provisions of the award;
• all outstanding stock options would have become fully
vested and exercisable; and
• an amount equal to his earned Annual Incentive Compen-
sation Plan bonus, prorated based upon the number of
months of the Senior Executive’s participation in the Annual
Incentive Compensation Plan during the calendar year.
Payments Upon Death or Disability
If the Senior Executive had terminated employment with
us on December 31, 2010 due to death or disability, he would
receive the following:
• all outstanding restricted stock awards granted by us would
have become fully vested and nonforfeitable;
• all outstanding stock options granted by us would have
become fully vested and exercisable;
• a lump-sum cash payment in 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 31, 2010, divided by the number
of days during the performance period;
• accelerated vesting of all the Senior Executive’s accounts
under the SRP, to the extent not already vested; and
• an amount equal to his earned Annual Incentive Compen-
sation Plan bonus, prorated based upon the number of
months of the Senior Executive’s participation in the Annual
Incentive Compensation Plan during the calendar year.
Payments Upon Retirement
If the Senior Executive had terminated employment on
December 31, 2010 and meets the eligibility requirements
for retirement, he would receive the following benefits:
• all outstanding stock options granted by us would have
become fully vested and exercisable;
• a lump-sum cash payment in an amount equal to the
applicable performance unit value multiplied by the number
of performance units specified in the Senior Executive’s per-
formance unit award agreement, multiplied by the number
of days during the performance period through December
30, 2010, divided by the number of days during the perfor-
mance period;
• accelerated vesting of all the Executive’s accounts under the
SRP, to the extent not already vested; and
• an amount equal to his earned Annual Incentive Compen-
sation Plan bonus, prorated based upon the number of
months of the Senior Executive’s participation in the Annual
Incentive Compensation Plan during the calendar year.
Payments Upon Involuntary Termination of Employment
Not In Connection With a Change in Control
The Baker Hughes Executive Severance Plan provides for
payment of certain benefits to the Senior Executives as a result
of an involuntary termination of employment provided that
(i) the executive signs a release agreement substantially similar
to the form of release agreement set forth in the Executive
Severance Plan, (ii) during the two-year period commencing
on the date of termination of employment he complies with
the noncompetition and non-solicitation agreements contained
in the Executive Severance Plan and (iii) the executive does
not disclose our confidential information. Any amounts pay-
able under the Executive Severance Plan are reduced by the
amount of any severance payments payable to the Senior
Executive by us under any other plan, program or individual
contractual arrangement.
If the Senior Executive meets the criteria for payment of
severance benefits due to an involuntary termination, we will
pay him the following benefits:
• a lump-sum cash payment equal to one and one-half times
the Senior Executive’s annual base salary in effect immedi-
ately prior to his termination of employment; and
• outplacement services for a period of 12 months, but not
in excess of $10,000; and
• if the Senior Executive’s termination of employment results
from a reduction of employment or the elimination of his
job, an amount equal to his earned Annual Incentive Com-
pensation Plan bonus, prorated based upon the number of
months of the Senior Executive’s participation in the Annual
Incentive Compensation Plan during the calendar year.
Termination of Employment for Any Reason
If the Senior Executive had terminated employment with
us on December 31, 2010 for any reason, including his resig-
nation or his involuntary termination of employment for cause,
he would have been entitled to receive those vested benefits
to which he is entitled under the terms of the employee ben-
efit plans in which he is a participant as of the date of termi-
nation of employment. Unless the Senior Executive were to
have incurred a termination of employment by us for cause
he would also have been entitled to any vested outstanding
stock options.