Baker Hughes 2007 Annual Report Download - page 50

32 Baker Hughes Incorporated
If the NEO meets the criteria for payment of severance
benefits due to an Involuntary Termination, we (or our succes-
sor) will pay him the following benefits in addition to any
benefits he is due under our employee benefit plans and
equity and incentive compensation plans:
a. a lump sum payment equal to one and one-half times the
NEO’s annual base salary in effect immediately prior to his
termination of employment;
b. the cost of the first three months COBRA continuation of
accident and health insurance benefits shall be borne by
us; and
c. outplacement services for a period of 12 months, but not
in excess of $10,000.
If Mr. Deaton were to have incurred an Involuntary Termi-
nation on December 31, 2007, he would have been eligible to
receive no benefits under the Severance Plan since the amount
of the severance benefits payable under his employment
agreement exceeds the amount of the severance benefits
payable under the Severance Plan.
If Messrs. Ragauss, Clark, Crain and Barr were to have
incurred Involuntary Terminations on December 31, 2007,
we estimate that the value of the payments and benefits
described in clauses (a) through (c) above would be as follows:
Equity Compensation Awards
We have granted restricted stock awards, stock options,
performance awards and performance stock units under the
2002 D&O Plan to Messrs. Deaton, Ragauss, Clark, Crain and
Barr as well as other Executives.
Restricted Stock Awards
Full Vesting of Restricted Stock Awards Upon
a Change in Control
If a change in control as defined in the Change in Control
Agreements or as defined in the 2002 D&O Plan (a “2002
D&O Plan Change in Control”) were to have occurred on
December 31, 2007, prior to the NEO’s termination of employ-
ment with us, all of the NEO’s then outstanding restricted
stock awards granted by us would have become fully vested
and nonforfeitable. For each NEO, the number of shares with
respect to which the forfeiture restrictions would have lapsed
and the value of this accelerated vesting is specified above
under the subheading “Payments in the Event of a Change in
Control Absent a Termination of Employment” under the
heading “Change in Control Agreements.”
A 2002 D&O Plan Change in Control is deemed to occur if:
•฀ the฀individuals฀who฀are฀incumbent฀directors฀(within฀the฀
meaning of the 2002 D&O Plan) cease for any reason to con-
stitute a majority of the members of our Board of Directors;
•฀ the฀consummation฀of฀a฀merger฀of฀us฀or฀our฀affiliate฀with฀
another entity, unless the individuals and entities who were
the beneficial owners of our voting securities outstanding
immediately prior to such merger own, directly or indirectly,
at least 55 percent of the combined voting power of the vot-
ing securities of us, the surviving entity or the parent of the
surviving entity outstanding immediately after such merger;
•฀ the฀consummation฀of฀a฀merger฀of฀us฀or฀our฀affiliate฀with฀
another entity, unless the individuals who comprise our
Board of Directors immediately prior thereto constitute at
least a majority of the board of directors of the entity surviv-
ing the merger or any parent thereof (or a majority plus one
member where such board is comprised of an odd number
of members);
•฀ any฀person฀becomes฀a฀beneficial฀owner,฀directly฀or฀indirectly,฀
of our securities representing 30 percent or more of the
combined voting power of our then outstanding voting
securities (not including any securities acquired directly from
us or our affiliates);
•฀ a฀sale฀or฀disposition฀of฀all฀or฀substantially฀all฀of฀our฀assets฀is฀
consummated (an “asset sale”), unless (i) the individuals and
entities who were the beneficial owners of our voting secu-
rities immediately prior to such asset sale own, directly or
indirectly, 55 percent or more of the combined voting power
of the voting securities of the entity that acquires such
assets in such asset sale or its parent immediately after such
asset sale in substantially the same proportions as their own-
ership of our voting securities immediately prior to such
asset sale; or (ii) the individuals who comprise our Board of
Directors immediately prior to such asset sale constitute a
majority of the board of directors or other governing body
of either the entity that acquired such assets in such asset
sale or its parent (or a majority plus one member where
such board or other governing body is comprised of an odd
number of directors); or
•฀ our฀stockholders฀approve฀a฀plan฀of฀complete฀liquidation
or dissolution of us.
Payment or Benefit Peter A. Ragauss James R. Clark Alan R. Crain David H.Barr
Clause (a) $ 819,000 $ 1,042,500 $ 682,500 $ 675,000
Clause (b) $ 3,042 $ 2,255 $ 3,042 $ 2,255
Clause (c) $ 10,000 $ 10,000 $ 10,000 $ 10,000
Total $ 832,042 $ 1,054,755 $ 695,542 $ 687,255