Baker Hughes 2007 Annual Report Download - page 51

2007 Proxy Statement 33
Full Vesting of Restricted Stock Awards Upon
Termination of Employment by the NEO for Good
Reason or By Us Without Cause in Connection with
a Potential Change in Control
If on December 31, 2007, (i) we terminated the employ-
ment of a NEO without cause prior to a 2002 D&O Plan
Change in Control or (ii) the NEO terminated his employment
with us for good reason and, in the case of (i) or (ii), the event
or circumstance occurred at the request or direction of the
person who entered into an agreement with us, the consum-
mation of which would constitute a 2002 D&O Plan Change in
Control or is otherwise in connection with or in anticipation of
a 2002 D&O Plan Change in Control, then all of the NEO’s
then outstanding restricted stock awards granted by us would
have become fully vested and nonforfeitable.
For this purpose the term “good reason” as defined in the
2002 D&O Plan includes: (i) the assignment to the NEO of any
duties inconsistent with the status of the NEO’s position with
us or a substantial adverse alteration in the nature or status of
the NEO’s responsibilities from those in effect immediately
prior to the 2002 D&O Plan Change in Control; (ii) a reduction
in the NEO’s base salary; (iii) the relocation of the NEO’s princi-
pal place of employment to a location more than 50 miles
from the NEO’s principal place of employment immediately
prior to the 2002 D&O Plan Change in Control or our requir-
ing the NEO to be based anywhere other than such principal
place of employment; (iv) our failure to pay the NEO any por-
tion of his current compensation or to pay him any portion
of an installment of deferred compensation within seven days
of the date the payment is due; (v) our failure to continue in
effect any compensation plan in which the NEO participated
immediately prior to the 2002 D&O Plan Change in Control
which is material to his total compensation; or (vi) our failure
to continue to provide the NEO with benefits substantially
similar to those enjoyed by him under any of our pension,
savings, life insurance, medical, health and accident, or disabil-
ity plans in which he was participating immediately prior to
the 2002 D&O Plan Change in Control, or our taking any
action that would materially reduce any of such benefits or
deprive the NEO of any material fringe benefit or perquisite
enjoyed by the NEO, or our failure to provide the NEO with
the number of paid vacation days to which he is entitled.
For this purpose, the term “cause” as defined in the 2002
D&O Plan includes: (i) the willful and continued failure by the
NEO to substantially perform his duties or (ii) the willful engag-
ing by the NEO in conduct which is materially injurious to us
or our affiliates.
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 subhead-
ing “Payments in the Event of a Change in Control Absent a
Termination of Employment” under the heading “Change in
Control Agreements.”
Pro Rata Vesting of Restricted Stock Awards
Upon Termination of Employment in Connection
with the Sale of a Business Unit
If (i) on December 31, 2007 we or one of our affiliates sold
a business unit, (ii) on December 31, 2007 the NEO’s employ-
ment with us terminated in connection with the sale and (iii)
the sale did not constitute a 2002 D&O Plan Change in Con-
trol, a pro-rata portion of the NEO’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, 2007, 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, 2007, divided by the number of days
the NEO would be required to work to achieve full vesting
under the normal vesting provisions of the award.
Chad C. Deaton
The substantial risk of forfeiture restrictions applicable to
67,552 shares of our stock granted to Mr. Deaton would have
lapsed on December 31, 2007, if (i) on December 31, 2007,
we or one of our affiliates sold a business unit, (ii) on Decem-
ber 31, 2007, Mr. Deaton’s employment with us terminated in
connection with the sale and (iii) the sale did not constitute a
2002 D&O Plan Change in Control. The maximum value of
this accelerated vesting of Mr. Deaton’s restricted stock awards
would have been $5,478,467 ($81.10 per share value on
December 31, 2007, multiplied by the number of our shares
subject to each of Mr. Deaton’s unvested restricted stock awards,
multiplied by the applicable reduction factors for the awards).
Peter A. Ragauss
The substantial risk of forfeiture restrictions applicable to
19,900 shares of our stock granted to Mr. Ragauss would have
lapsed on December 31, 2007, if (i) on December 31, 2007,
we or one of our affiliates sold a business unit, (ii) on Decem-
ber 31, 2007, Mr. Ragauss’ employment with us terminated in
connection with the sale and (iii) the sale did not constitute a
2002 D&O Plan Change in Control. The maximum value of
this accelerated vesting of Mr. Ragauss’ restricted stock awards
would have been $1,613,890 ($81.10 per share value on
December 31, 2007, multiplied by the number of our shares
subject to each of Mr. Ragauss’ unvested restricted stock awards,
multiplied by the applicable reduction factors for the awards).
James R. Clark
The substantial risk of forfeiture restrictions applicable to
14,678 shares of our stock granted to Mr. Clark would have
lapsed on December 31, 2007, if (i) on December 31, 2007,
we or one of our affiliates sold a business unit, (ii) on Decem-
ber 31, 2007, Mr. Clark’s employment with us terminated in
connection with the sale and (iii) the sale did not constitute a
2002 D&O Plan Change in Control. The maximum value of
this accelerated vesting of Mr. Clark’s restricted stock awards
would have been $1,190,385 ($81.10 per share value on
December 31, 2007, multiplied by the number of our shares
subject to each of Mr. Clark’s unvested restricted stock awards,
multiplied by the applicable reduction factors for the awards).