Baker Hughes 2007 Annual Report Download - page 52

34 Baker Hughes Incorporated
Alan R. Crain
The substantial risk of forfeiture restrictions applicable to
21,297 shares of our stock granted to Mr. Crain 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. Crain’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. Crain’s restricted stock awards
would have been $1,727,187 ($81.10 per share value on
December 31, 2007, multiplied by the number of our shares
subject to each of Mr. Crain’s unvested restricted stock awards,
multiplied by the applicable reduction factors for the awards).
David H. Barr
The substantial risk of forfeiture restrictions applicable to
25,961 shares of our stock granted to Mr. Barr 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. Barr’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. Barr’s restricted stock awards
would have been $2,105,437 ($81.10 per share value on
December 31, 2007, multiplied by the number of our shares
subject to each of Mr. Barr’s unvested restricted stock awards,
multiplied by the applicable reduction factors for the awards).
Full Vesting of Restricted Stock Awards Upon the
NEO’s Termination of Employment Due to His Disability
or His Death
If the NEO had terminated employment with us on Decem-
ber 31, 2007 due to death or due to disability, all of his then
outstanding restricted stock awards granted by us would have
become fully vested and nonforfeitable. For this purpose a
NEO is treated as having incurred a disability if he qualifies
for long-term disability benefits under our long-term disability
program. 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.”
Full Vesting of Restricted Stock Award Upon Our
Termination of NEO’s Employment Without Cause
The substantial risk of forfeiture restrictions applicable to
10,000 shares of our stock subject to a restricted stock award
granted to Mr. Crain on April 28, 2004 would have lapsed on
December 31, 2007 had we terminated the employment of
Mr. Crain on December 31, 2007 without cause (as defined in
the 2002 D&O Plan). The maximum value of this accelerated
vesting of Mr. Crain’s restricted stock awards would have been
$811,000 ($81.10 per share value on December 31, 2007,
multiplied by 10,000 of our shares).
Stock Options
Full Vesting of Stock Options Upon A Change in Control
If a change in control (as defined in the Change in Control
Agreements or the 2002 D&O Plan) were to have occurred on
December 31, 2007, all of the then outstanding stock options
granted by us to the NEOs would have become fully vested
and exercisable. For each NEO, the number of our shares for
which the options would have become fully exercisable 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.”
Full Vesting of Stock Options Upon Termination of
Employment in Connection With a Change in Control
or Upon Sale of a Business Unit
If a 2002 D&O Plan Change in Control had occurred on
December 31, 2007, and the NEO had terminated employ-
ment with us for good reason (as defined in the 2002 D&O
Plan) on December 31, 2007 or we had terminated the NEO’s
employment with us on December 31, 2007 for reasons other
than cause (as defined in the 2002 D&O Plan) in connection
with a change in control all of the then outstanding stock
options granted by us to the NEO would have become fully
exercisable. If on December 31, 2007, we or one of our affili-
ates sold a business unit that employed the NEO, all of the
NEO’s then outstanding stock options would have become
fully exercisable. For each NEO, the number of shares for
which the options would have become fully exercisable 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.”
Full Vesting of Stock Options Upon Retirement of NEO
If the NEO had terminated employment on December 31,
2007, and the sum of his age and years of service with us
equaled at least 65, all of the NEO’s then outstanding stock
options granted by us would have become fully vested and
exercisable.
Messrs. Deaton, Ragauss and Crain are not yet eligible to
retire for purposes of their outstanding stock options.
If Mr. Clark had terminated employment with us on
December 31, 2007 due to retirement, his options to purchase
an aggregate of 79,098 of our shares with a value of $81.10
per share would have become fully exercisable on December
31, 2007. Under the terms of Mr. Clark’s stock options, he
would have to pay an aggregate of $5,365,502 to purchase
these shares. Accordingly, the maximum value of the acceler-
ated vesting of the options would have been $1,049,346
($81.10 per share value on December 31, 2007, multiplied by
79,098 of our shares subject to the options minus $5,365,502
the aggregate exercise price for the options).