Baker Hughes 2007 Annual Report Download - page 53

2007 Proxy Statement 35
If Mr. Barr had terminated employment with us on Decem-
ber 31, 2007 due to retirement his options to purchase an
aggregate of 36,583 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. Barr’s stock options, he would
have to pay an aggregate of $2,612,336 to purchase these
shares. Accordingly, the maximum value of the accelerated
vesting of the options would have been $354,545 ($81.10 per
share value on December 31, 2007, multiplied by 36,583 of
our shares subject to the options minus $2,612,336, the
aggregate exercise price for the options).
Full Vesting of Stock Options Upon Termination of
Employment Due to Death or Disability of the NEO
If the NEO had terminated employment on December 31,
2007, due to the disability of the NEO (as determined by the
2002 D&O Plan committee) or due to the death of the NEO,
all of the NEO’s then outstanding stock options granted by us
would have become fully vested and exercisable. For each
NEO, the number of our shares for which stock options would
have become fully exercisable and the value of the accelerated
vesting of the options if on December 31, 2007 the NEO ter-
minated employment with us due to his death or disability is
specified above under the heading “Full Vesting of Stock
Options Upon a Change in Control.”
Performance Awards
Payment of Performance Awards 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, prior to the NEO’s termination of employ-
ment with us, we would have paid the NEO, in cash, an
amount equal to 200% of the target shares specified in the
NEO’s performance award multiplied by the closing price of a
share of our stock on the date of grant of the performance
award. The amounts we would have paid are $2,645,540,
$1,237,430, $426,700 and $277,355, for Messrs. Deaton,
Clark, Crain and Barr, respectively.
Payment of Performance 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 (within the meaning of the
2002 D&O Plan or the Change in Control Agreements) prior to
a change in control (as defined in the Change in Control
Agreements or the 2002 D&O Plan), or (ii) the NEO terminated
his employment with us for good reason (within the meaning
of the 2002 D&O Plan or the Change in Control Agreements)
and, in the case of (i) or (ii), the circumstance or event occurred
at the request or direction of the person who entered into an
agreement with us the consummation of which would consti-
tute such a change in control or is otherwise in connection with
or in anticipation of such a change in control, we would have
paid the NEO, in cash, an amount equal to 200% of the tar-
get shares specified in the NEO’s performance award multi-
plied by the closing price of a share of our stock on the date
of grant of the performance award.
If a potential change in control (within the meaning of
the Change in Control Agreements or the 2002 D&O Plan)
had occurred on December 31, 2007 and the NEO’s employ-
ment was terminated by him on December 31, 2007 for good
reason (within the meaning of the Change in Control Agree-
ments or the 2002 D&O Plan) or the NEO’s employment was
terminated by us without cause (within the meaning of the
Change in Control Agreements or the 2002 D&O Plan) on
December 31, 2007, we would have paid the NEO the amount
specified above under the heading “Payment of Performance
Awards Upon a Change in Control.”
Payment of Performance Awards Upon Termination
of Employment in Connection with the Sale of a
Business Unit
If on December 31, 2007 we or one of our affiliates sold a
business unit of us or one of our affiliates and on December 31,
2007 the NEO’s employment with us terminated in connection
with the sale (other than for cause as defined in the 2002
D&O Plan), and the sale did not constitute a 2002 D&O Plan
Change in Control, at the end of the performance period end-
ing on December 31, 2007, we would owe the NEO shares
payable under his performance award granted under the 2002
D&O Plan on January 1, 2005. The number of shares payable
under the performance award would be based upon the
actual performance objectives achieved during the perfor-
mance period. The shares payable under the performance
award would be the number of shares that we would have
paid under the award had the NEO remained employed by us
through December 31, 2007.
Chad C. Deaton
If the target level of performance were achieved during
the performance period, we would owe Mr. Deaton 31,000
shares, with a value as of December 31, 2007 of $2,514,100
(31,000 shares multiplied by $81.10 per share value on
December 31, 2007). If the highest level of performance
were achieved during the performance period, we would owe
Mr. Deaton 62,000 shares with a value as of December 31,
2007 of $5,028,200.
James A. Clark
If the target level of performance were achieved during
the performance period, we would owe Mr. Clark 14,500
shares, with a value as of December 31, 2007 of $1,175,950
(14,500 shares multiplied by $81.10 per share value on
December 31, 2007). If the highest level of performance
were achieved during the performance period, we would owe
Mr. Clark 29,000 shares with a value as of December 31, 2007
of $2,351,900.