Baker Hughes 2007 Annual Report Download - page 73

2007 Proxy Statement E-5
Plan, determine the sizes and types of Awards to Employees
and determine the terms and conditions of Awards to Employ-
ees in a manner consistent with this Plan. The Committee may,
in its discretion, provide for the extension of the exercisability
of an Award to an Employee, accelerate the vesting or exercis-
ability of an Award to an Employee, eliminate or make less
restrictive any restrictions contained in an Award to an
Employee, waive any restriction or other provision of this Plan
(insofar as such provision relates to Awards to Employees) or
an Award to an Employee or otherwise amend or modify an
Award to an Employee in any manner that is either (i) not
adverse to the Participant to whom the Award to an Employee
was granted or (ii) to which the Participant consents. The
Committee may make an Award to an individual who it
expects to become an Employee of the Company or any of its
Affiliates within the next 6 months, with the Award being sub-
ject to the individual’s actually becoming an Employee within
that time period and subject to other terms and conditions as
the Committee may establish. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in
this Plan or in any Award to an Employee in the manner and
to the extent the Committee deems necessary or desirable to
further this Plan’s objectives. Further, the Committee shall
make all other determinations that may be necessary or advis-
able for the administration of this Plan. As permitted by law
and the terms of this Plan, the Committee may delegate its
authority as identified in Section 3.3.
3.3 Delegation of Authority. The Committee may dele-
gate to the Chief Executive Officer and to other senior officers
of the Company its duties under this Plan pursuant to such
conditions or limitations as the Committee may establish. The
Committee may engage or authorize the engagement of a
third-party administrator to carry out administrative functions
under this Plan.
3.4 Decisions Binding. All determinations and decisions
made by the Committee and the Board pursuant to the provi-
sions of this Plan and all related orders and resolutions of the
Committee and the Board shall be final, conclusive and bind-
ing on all persons, including the Company, its stockholders,
Directors, Employees, Participants and the estates and benefi-
ciaries of Directors, Employees and Participants.
Under no circumstances shall the Company incur liability
for any indirect, incidental, consequential or special damages
(including lost profits) of any form incurred by any person,
whether or not foreseeable and regardless of the form of the
act in which such a claim may be brought, with respect to this
Plan or the Company’s role as Plan sponsor.
Article 4. Shares Subject to Plan and Maximum Awards.
4.1 Number of Shares Available for Awards. Subject to
adjustment as provided in Section 4.2, the number of Shares
hereby reserved for issuance to Participants under this Plan
shall be 7 million, no more than 3 million of which may be
granted in the form of Awards other than in the form of
Options. These Shares may consist of authorized but unissued
Shares or previously issued Shares reacquired by the Company.
The number of Shares that are the subject of Awards under
this Plan that are forfeited or terminated, expire unexercised,
are settled in cash in lieu of Shares or in a manner such that
all or some of the Shares covered by an Award are not issued
to a Participant or are exchanged for Awards that do not
involve Shares shall again immediately become available to be
issued pursuant to Awards granted under this Plan. Shares
approved pursuant to the Long Term Incentive Plan of Baker
Hughes Incorporated, as amended, the Baker Hughes Incorpo-
rated 1993 Stock Option Plan, as amended, and the Baker
Hughes Incorporated 1998 Employee Stock Option Plan, as
amended, that, upon shareholder approval of this Plan, have
not been awarded under such plans, including Shares that are
canceled, terminated, expired unexercised, settled in cash in
lieu of Shares or in a manner such that all or some of the
Shares covered thereby are not issued to a participant or are
exchanged for a consideration that does not involve Shares,
and Shares that are so canceled, terminated, expired unexer-
cised, settled in cash in lieu of Shares or in a manner such that
all or some of the Shares covered thereby are not issued to a
participant or are exchanged for a consideration that does not
involve Shares, will immediately become available for Awards
under this Plan. The Shares described in the foregoing sen-
tence shall be included in the 7 million Shares reserved for
issuance under this Plan. The Committee shall determine the
appropriate methodology for calculating the number of Shares
issued pursuant to this Plan. The following rules (“Award Limi-
tations”) shall apply to grants of such Awards under this Plan:
(a) Options. The maximum aggregate number of Shares
that may be granted in the form of Options pursuant
to any Award granted in any one Fiscal Year to any one
Employee shall be 3,000,000.
(b) SARs. The maximum aggregate number of Shares that
may be granted in the form of Stock Appreciation
Rights pursuant to any Award granted in any one Fiscal
Year to any one Employee shall be 3,000,000.
(c) Restricted Stock/Units. The maximum aggregate
grant with respect to Awards of Restricted Stock/Units
granted in any one Fiscal Year to any one Employee
shall be 1,000,000.
(d) Performance Shares/Performance Units and Cash-
Based Awards. The maximum aggregate grant with
respect to Awards of Performance Shares made in any
one Fiscal Year to any one Employee shall be equal to
the value of 1,000,000 Shares, determined as of the
date of grant. The maximum aggregate amount
awarded or credited with respect to Cash-Based
Awards or Performance Units to any one Employee
in any one Fiscal Year may not exceed in value
$10,000,000, determined as of the date of grant.
(e) Director Awards. The maximum aggregate grant
with respect to Awards of Options, Stock Awards or
Restricted Stock/Units granted in any one Fiscal Year
to any one Director shall be 10,000 Shares/Units.