Baker Hughes 2007 Annual Report Download - page 45

2007 Proxy Statement 27
NONQUALIFIED DEFERRED COMPENSATION
The following table discloses contributions, earnings and balances to each of the PEO and NEOs under the SRP that provides for
compensation deferral on a non-tax-qualified basis.
Nonqualified Deferred Compensation
Executive Registrant Aggregate
Contributions in Contributions in Aggregate Earnings Withdrawals/ Aggregate Balance
Last FY ($) Last FY ($) in Last FY ($) Distributions ($) at Last FYE ($)
Name 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
Chad C. Deaton $ 497,862 $ 439,019 $ 382,368 $ 306,239 $ 169,793 $ 111,360 $ 0 $ 0 $ 2,201,385 $ 1,150,685
Peter A. Ragauss $ 42,000 $ 30,288 $ 118,315 $ 19,654 $ (10,228) $ 634 $ 0 $ 0 $ 200,663 $ 50,576
James R. Clark $ 83,914 $ 89,490 $ 218,003 $ 191,444 $ 79,966 $ 88,054 $ 0 $ 0 $ 2,153,234 $ 1,771,352
Alan R. Crain $ 54,952 $ 55,315 $ 110,495 $ 89,918 $ 45,120 $ 26,421 $ 0 $ 0 $ 873,541 $ 662,974
David H. Barr $ 87,099 $ 81,779 $ 96,698 $ 74,992 $ 65,677 $ 113,115 $ 0 $ 0 $ 1,785,244 $ 1,535,769
POTENTIAL PAYMENTS UPON TERMINATION
OR CHANGE IN CONTROL
Employment Agreement With Chad C. Deaton
We have an employment agreement with Mr. Chad C.
Deaton, dated as of October 25, 2004. The term of the
employment agreement expires on October 25, 2008, with
automatic one-year renewals unless Mr. Deaton or we provide
a notice not to extend the employment agreement at least
thirteen months prior to the then current expiration date.
Termination of Employment Due to Death or Disability
During the term of the employment agreement and for a
period of two years following termination of the employment
agreement, Mr. Deaton is prohibited from (i) engaging in com-
petition (as defined in the employment agreement) with us
and (ii) soliciting our customers, employees and consultants.
Upon the termination of Mr. Deaton’s employment due to
his disability or death:
a. we will pay him or his beneficiary a lump sum in cash equal
to one-half his then base salary for each year (prorated for
partial years) during the remaining term of the employment
agreement;
b. we will pay him or his beneficiary a lump sum in cash equal
to his expected value incentive bonus for the year of termi-
nation; and
c. the substantial risk of forfeiture restrictions applicable to
40,000 restricted shares of our stock granted by us on
October 25, 2004 would have lapsed.
For this purpose, Mr. Deaton will be deemed to have a
“disability”, if as a result of his incapacity due to physical or
mental illness, (i) he is absent from the full-time performance
of his duties with us for 90 days during any period of 12 con-
secutive months or (ii) it is reasonably certain that the disability
will last for more than that period, and within 30 days after
we give written notice of termination to Mr. Deaton he does
not return to the performance of his duties with us on a full-
time basis.
If Mr. Deaton’s employment were to have been terminated
on December 31, 2007, due to death or disability (as defined
in the employment agreement), we estimate that the value
of the payments and benefits described in clauses (a), (b) and
(c) above he would have been eligible to receive is as follows:
(a) $1,008,333, (b) $1,100,000 and (c) $3,244,000, with
an aggregate value of $5,352,333.
Termination of Employment by Mr. Deaton for
Good Reason or by Us Without Cause
Upon the termination of Mr. Deaton’s employment by him
for good reason or by us without cause, we will pay him:
a. a lump sum cash payment in an amount equal to two times
his then base salary;
b. a lump sum cash payment equal to the expected value of
his incentive bonus opportunity under our Annual Incentive
Plan for the year of termination, prorated to the date of
termination (in lieu of any bonus payment that would have
otherwise been due under the Annual Incentive Plan for
such year);
c. for the remainder of the term of the employment agree-
ment, continuation of executive perquisites (other than
executive life insurance);
d. for the remainder of the term of the employment agree-
ment, continuation of medical insurance benefits at active
employee premium rates1;
e. a lump sum payment equivalent to the monthly basic life
insurance premium applicable to Mr. Deaton’s basic life
insurance coverage on the date of termination multiplied
by the number of months remaining in the term of the
employment agreement; and
f. for the remainder of the term of the employment agree-
ment, continued employer contributions to the SRP.
However, the foregoing benefits are not payable if
Mr. Deaton is entitled to benefits under his Change in
Control Agreement discussed below.
“Good reason” as defined in the employment agreement
includes: (i) the assignment to Mr. Deaton of any duties incon-
sistent with his position (including status, office, title and
reporting requirements), authorities, duties or other responsi-
bilities; (ii) the relocation of Mr. Deaton’s principal place of
1 The value of this benefit is calculated as the aggregate premium amounts
Mr. Deaton would be required to pay for such coverage under the Company’s
premium rate structure in effect on December 31, 2007 for continuation cover-
age under COBRA minus the aggregate premium amounts Mr. Deaton would
be required to pay for such coverage under the employment agreement.