Baker Hughes 2007 Annual Report Download - page 70

E-2 Baker Hughes Incorporated
“Beneficial Owner” or “Beneficial Ownership” shall
have the meaning ascribed to the term in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act.
“Board” or “Board of Directors” means the Board of
Directors of the Company.
“Cash-based Award” means an Award granted to a
Participant as described in Article 9.
“Cause” for termination by the Company of the Employ-
ee’s employment means (a) the willful and continued failure by
the Employee to substantially perform the Employee’s duties
with the Company (other than any such failure resulting from
the Employee’s incapacity due to physical or mental illness or
any such actual or anticipated failure after the issuance of a
notice of termination for Good Reason by the Employee) after
a written demand for substantial performance is delivered to
the Employee by the Committee, which demand specifically
identifies the manner in which the Committee believes that
the Employee has not substantially performed the Employee’s
duties, or (b) the willful engaging by the Employee in conduct
which is demonstrably and materially injurious to the Com-
pany or its subsidiaries, monetarily or otherwise. For purposes
of Sections (a) and (b) of this definition, (i) no act, or failure to
act, on the Employee’s part shall be deemed “willful” unless
done, or omitted to be done, by the Employee not in good
faith and without reasonable belief that the Employee’s act, or
failure to act, was in the best interest of the Company and (ii)
in the event of a dispute concerning the application of this
provision, no claim by the Company that Cause exists shall be
given effect unless the Company establishes to the Committee
by clear and convincing evidence that Cause exists.
A “Change in Control” of the Company shall be deemed
to have occurred as of the first day that any one or more of
the following conditions shall have been satisfied:
(a) Any Person is or becomes a Beneficial Owner, directly
or indirectly, of securities of the Company (not includ-
ing in the securities beneficially owned by this Person
any securities acquired directly from the Company or its
Affiliates) representing 30% or more of the combined
voting power of the Company’s then outstanding secu-
rities, excluding any Person who becomes, as described
in this Section (a), a Beneficial Owner in connection
with a transaction described in Section (c)(i) of this
definition below; or
(b) The following individuals cease for any reason to
constitute a majority of the number of Directors then
serving: individuals who, on the Effective Date, consti-
tute the Board of Directors of the Company and any
new Director (other than a Director whose initial
assumption of office is in connection with an actual
or threatened election contest relating to the election
of Directors of the Company) whose appointment or
election by the Board of Directors of the Company or
nomination for election by the Company’s stockholders
was approved or recommended by a vote of at least 2⁄3
of the Directors then still in office who either were
Directors on the date hereof or whose appointment,
election or nomination for election was previously so
approved or recommended; or
(c) There is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than (i) a
merger or consolidation that would result in the voting
securities of the Company outstanding immediately
prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity
or any parent thereof), in combination with the owner-
ship of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or
any Affiliate, at least 55% of the combined voting
power of the securities of the Company or such surviv-
ing entity or any parent thereof outstanding immedi-
ately after such merger or consolidation or (ii) a merger
or consolidation effected to implement a recapitaliza-
tion of the Company (or similar transaction) in which
no Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company (not includ-
ing in the securities Beneficially Owned by this Person
any securities acquired directly from the Company or its
Affiliates other than in connection with the acquisition
by the Company or its Affiliates of a business) repre-
senting 30% or more of the combined voting power
of the Company’s then outstanding securities; or
(d) There is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Com-
pany with any other corporation, other than a merger or
consolidation immediately following which the individu-
als who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of
the entity surviving such merger or any parent thereof
(or a majority plus one member where such board is
comprised of an odd number of members); or
(e) The stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company
or there is consummated an agreement for the sale
or disposition by the Company of all or substantially
all of the Company’s assets, other than (i) a sale or
disposition by the Company of all or substantially all
of the Company’s assets to an entity, at least 55% of
the combined voting power of the voting securities
of which are owned by stockholders of the Company
in substantially the same proportions as their ownership
of the Company immediately prior to such sale, or (ii)
where the individuals who comprise the Board immedi-
ately prior thereto constitute at least a majority of the
board of directors of such entity or any parent thereof
(or a majority plus one member where such board is
comprised of an odd number of members).