Baker Hughes 2007 Annual Report Download - page 72

E-4 Baker Hughes Incorporated
Company to provide the Employee with the number of
paid vacation days to which the Employee is entitled on
the basis of years of service with the Company in
accordance with the Company’s normal vacation policy
in effect at the time of the Change in Control; or
(g) if the Employee is party to an individual employment,
severance, or similar agreement with the Company, any
purported termination of the Employee’s employment
which is not effected pursuant to the notice of termi-
nation or other procedures specified therein satisfying
the requirements thereof; for purposes of this Plan, no
such purported termination shall be effective.
The Employee’s right to terminate the Employee’s employ-
ment for Good Reason shall not be affected by the Employee’s
incapacity due to physical or mental illness. The Employee’s
continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act con-
stituting Good Reason hereunder.
For purposes of any determination regarding the existence
of Good Reason, any claim by the Employee that Good Reason
exists shall be presumed to be correct unless the Company
establishes to the Committee by clear and convincing evidence
that Good Reason does not exist.
“Incentive Stock Option” or “ISO” means an option to
purchase Shares granted under Article 6 and that is designated
as an incentive stock option and that is intended to meet the
requirements of Code Section 422, or any successor provision.
Incentive Stock Options may only be granted to Participants
who are officers and key employees of the Company.
“Nonqualified Stock Option” or “NQSO” means an
Option that is not intended to meet the requirements of
Code Section 422, or that otherwise does not meet such
requirements.
“Option” means an Incentive Stock Option or a Nonquali-
fied Stock Option, as described in Article 6.
“Option Price” means the price at which a Participant
may purchase a Share pursuant to an Option.
“Participant” means an Employee or Director who has
been selected to receive an Award or who has an outstanding
Award granted under this Plan.
“Performance-Based Award” means a Performance
Share, a Performance Unit, a Cash-Based Award or a Stock
Award granted to a Participant, as described in Article 9, of
which the fulfillment of performance goals determines the
degree of payout or vesting.
“Performance Period” means the period of time
during which the performance goals must be met to deter-
mine the degree of payout or vesting with respect to certain
Performance-Based Awards.
“Performance Share” means an Award granted to a
Participant, as described in Article 9.
“Performance Unit” means an Award granted to a Partic-
ipant, as described in Article 9.
“Period of Restriction” means the period during which
the transfer of Shares of Restricted Stock is limited in some
way (based on the passage of time, the achievement of per-
formance goals or upon the occurrence of other events as
determined by the Committee (or the Board with respect to
Awards granted to Directors), at its discretion) and the Shares
are subject to a substantial risk of forfeiture, as provided in
Article 8.
“Person” shall have the meaning ascribed to the term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a “group” as defined in Section
13(d) thereof, except that the term shall not include (a) the
Company or any of its Affiliates, (b) a trustee or other fiduciary
holding Company securities under an employee benefit plan of
the Company or any of its Affiliates, (c) an underwriter tempo-
rarily holding securities pursuant to an offering of those securi-
ties or (d) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same propor-
tions as their ownership of stock of the Company.
“Restricted Stock” means an Award granted to a Partici-
pant pursuant to Article 8.
“Restricted Stock Unit” means an Award granted to a
Participant, as described in Article 8.
“Shares” means the common stock of the Company,
$1.00 par value per share.
“Stock Appreciation Right” or “SAR” means an Award,
granted alone or in connection with a related Option, desig-
nated as an SAR, pursuant to the terms of Article 7.
“Stock Award” means an Award granted pursuant to the
terms of Section 9.6.
“Tandem SAR” means an SAR that is granted in connec-
tion with a related Option pursuant to Article 7, the exercise
of which shall require forfeiture of the right to purchase a
Share under the related Option (and when a Share is pur-
chased under the Option, the Tandem SAR shall similarly
be canceled).
2.2 As used in this Plan, unless the context otherwise
expressly requires to the contrary, references to the singular
include the plural, and vice versa; references to the masculine
include the feminine and neuter; references to “including”
mean “including (without limitation)”; and references to Sec-
tions and Articles mean the sections and articles of this Plan.
Article 3. Administration.
3.1 General. Subject to the terms and conditions of this
Plan, the Committee shall administer this Plan or, in the
absence of the Committee, the Board shall administer this
Plan. The Board shall appoint the members of the Committee,
from time to time, who shall serve at the discretion of the
Board. The Committee shall have full and exclusive power and
authority to administer this Plan and to take all actions that
this Plan specifically contemplates or are necessary or appropri-
ate in connection with the administration of this Plan; pro-
vided that the Board shall administer this Plan with respect to
Awards granted to Directors.
3.2 Authority of the Committee. Insofar as this Plan
relates to Awards to Employees, the Committee shall also have
full and exclusive power to interpret this Plan and to adopt
such rules, regulations and guidelines for carrying out this Plan
as it may deem necessary or proper, all of which powers shall
be exercised in the best interests of the Company and in keep-
ing with the objectives of this Plan. The Committee shall have
full power to select Employees who shall participate in this