Baker Hughes 2007 Annual Report Download - page 71

2007 Proxy Statement E-3
Notwithstanding the foregoing, a “Change in Control”
shall not be deemed to have occurred by virtue of the con-
summation of any transaction or series of integrated transac-
tions immediately following which the record holders of the
common stock of the Company immediately prior to such
transaction or series of transactions continue to have substan-
tially the same proportionate ownership in an entity that owns
all or substantially all of the assets of the Company immedi-
ately following such transaction or series of transactions.
“Code” means the Internal Revenue Code of 1986, as
amended from time to time.
“Committee” means the Compensation Committee of
the Board or such other committee of the Board or the entire
Board as the Board designates to administer Awards to
Employees, as specified in Article 3.
“Company” shall have the meaning ascribed to that term
in Section 1.1.
“Director” means any individual who is a member of the
Board of Directors of the Company; provided that any Director
the Company employs shall be considered an Employee under
this Plan.
“Effective Date” shall have the meaning ascribed to that
term in Section 1.1.
“Employee” means (i) any employee of the Company or
any of its Affiliates or (ii) an individual who has agreed to
become an Employee of the Company or any of its Affiliates
and is expected to become an Employee within the following
6 months.
“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
“Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, or any successor act.
“Fair Market Value” means the value per Share as
determined by the Committee, based on the composite
transactions in Shares as reported by The Wall Street Journal,
and shall be equal to the per share price of the last sale of
Shares on the trading day prior to the date on which value
is being determined.
“Fiscal Year” means the year commencing January 1 and
ending December 31.
“Freestanding SAR” means an SAR that is granted inde-
pendently of any Option, as described in Article 7.
“Good Reason” for termination by the Employee of the
Employee’s employment means the occurrence (without the
Employee’s express written consent) after any Change in Con-
trol, or prior to a Change in Control under the circumstances
described in clauses (b) and (c) of Section 14.2 hereof, of any
one of the following acts by the Company, or failures by the
Company to act, unless, in the case of any act or failure to
act described in paragraph (a), (e), (f) or (g) below, such act
or failure to act is corrected prior to the effective date of the
Employee’s termination for Good Reason;
(a) the assignment to the Employee of any duties inconsis-
tent with the status of the Employee’s position with the
Company or a substantial adverse alteration in the
nature or status of the Employee’s responsibilities
from those in effect immediately prior to the Change
in Control;
(b) a reduction by the Company in the Employee’s annual
base salary as in effect on the date hereof or as the
same may be increased from time to time except for
across-the-board salary reductions similarly affecting
all individuals having a similar level of authority and
responsibility with the Company and all individuals
having a similar level of authority and responsibility
with any Person in control of the Company;
(c) the relocation of the Employee’s principal place of
employment to a location more than 50 miles from
the Employee’s principal place of employment immedi-
ately prior to the Change in Control or the Company’s
requiring the Employee to be based anywhere other
than such principal place of employment (or permitted
relocation thereof) except for required travel on the
Company’s business to an extent substantially consistent
with the Employee’s present business travel obligations;
(d) the failure by the Company to pay to the Employee any
portion of the Employee’s current compensation except
pursuant to an across-the-board compensation deferral
similarly affecting all individuals having a similar level of
authority and responsibility with the Company and all
individuals having a similar level of authority and
responsibility with any Person in control of the Com-
pany, or to pay to the Employee any portion of an
installment of deferred compensation under any
deferred compensation program of the Company,
within 7 days of the date such compensation is due;
(e) the failure by the Company to continue in effect any
compensation plan in which the Employee participates
immediately prior to the Change in Control which is
material to the Employee’s total compensation, unless
an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company
to continue the Employee’s participation therein (or in
such substitute or alternative plan) on a basis not mate-
rially less favorable, both in terms of the amount or
timing of payment of benefits provided and the level
of the Employee’s participation relative to other partici-
pants, as existed immediately prior to the Change
in Control;
(f) the failure by the Company to continue to provide the
Employee with benefits substantially similar to those
enjoyed by the Employee under any of the Company’s
pension, savings, life insurance, medical, health and
accident, or disability plans in which the Employee was
participating immediately prior to the Change in Con-
trol (except for across the board changes similarly
affecting all individuals having a similar level of author-
ity and responsibility with the Company and all individ-
uals having a similar level of authority and responsibility
with any Person in control of the Company), the taking
of any other action by the Company which would
directly or indirectly materially reduce any of such ben-
efits or deprive the Employee of any material fringe
benefit or perquisite enjoyed by the Employee at the
time of the Change in Control, or the failure by the