Baker Hughes 2009 Annual Report Download - page 41

2009 Proxy Statement 31
Nonqualified Deferred Compensation
The following table discloses contributions, earnings and balances to each of the PEO and other NEOs under the SRP that
provides for compensation deferral on a non-tax-qualified basis.
Nonqualified Deferred Compensation
Executive Contributions Registrant Contribution Aggregate Earnings Aggregate Withdrawals/ Aggregate Balance
Name in Last FY ($) In Last FY ($) In Last FY ($) Distributions ($) at Last FYE ($)
Chad C. Deaton $ 462,190 $ 301,583 $ 230,398 $ 0 $ 3,692,703
Peter A. Ragauss $ 76,692 $ 103,918 $ 137,726 $ 0 $ 542,873
Alan R. Crain $ 54,577 $ 80,529 $ 48,181 $ 0 $ 1,210,177
David H. Barr $ 22,699 $ 36,101 $ 3,186 $ 0 $ 1,906,789
Martin S. Craighead $ 124,495 $ 80,380 $ 104,052 $ 0 $ 956,416
John A. O’Donnell $ 64,180 $ 51,732 $ 25,251 $ 0 $ 521,235
POTENTIAL PAYMENTS UPON TERMINATION
OR CHANGE IN CONTROL
Employment Agreement With Chad C. Deaton
We have an employment agreement with Mr. Chad C.
Deaton, dated as of October 25, 2004 and amended and
restated effective January 1, 2009. The term of the employment
agreement expires on October 25, 2011, with automatic one-
year renewals unless Mr. Deaton or we provide a notice not to
extend the employment agreement at least thirteen months
prior to the then current expiration date.
Termination of Employment Due to Death or Disability
During the term of the employment agreement and for a
period of two years following termination of the employment
agreement, Mr. Deaton is prohibited from (i) engaging in com-
petition (as defined in the employment agreement) with us
and (ii) soliciting our customers, employees and consultants.
Upon the termination of Mr. Deaton’s employment due to
his disability or death:
a. we will pay him or his beneficiary a lump sum in cash equal
to one-half his then base salary for each year (prorated for
partial years) during the remaining term of the employment
agreement; and
b. we will pay him or his beneficiary a lump sum in cash equal to
his expected value incentive bonus for the year of termination.
For this purpose, Mr. Deaton will be deemed to have a “dis-
ability”, if as a result of his incapacity due to physical or mental
illness, (i) he is absent from the full-time performance of his
duties with us for 90 days during any period of 12 consecutive
months or (ii) it is reasonably certain that the disability will last
for more than that period, and within 30 days after we give
written notice of termination to Mr. Deaton he does not return
to the performance of his duties with us on a full-time basis.
If Mr. Deaton’s employment were to have been terminated
on December 31, 2009, due to death or disability (as defined in
the employment agreement), we estimate that the value of the
payments and benefits described in clauses (a) and (b) above he
would have been eligible to receive is as follows: (a) $1,058,500
and (b) $1,386,000, with an aggregate value of $2,444,500.
Termination of Employment by Mr. Deaton for
Good Reason or by Us Without Cause
Upon the termination of Mr. Deaton’s employment by
him for good reason or by us without cause, we will pay him:
a. a lump sum cash payment in an amount equal to two times
his then base salary;
b. a lump sum cash payment equal to Mr. Deaton’s Highest
Bonus Amount (as defined below), prorated to the date of ter-
mination (in lieu of any bonus payment that would have other-
wise been due under the Annual Incentive Plan for such year);
c. for the remainder of the term of the employment agreement,
continuation of executive perquisites (other than executive
life insurance);
d. for the remainder of the term of the employment agreement,
continuation of medical insurance benefits at active employee
premium rates(1);
e. a lump sum payment equivalent to the monthly basic life
insurance premium applicable to Mr. Deaton’s basic life
insurance coverage on the date of termination multiplied
by the number of months remaining in the term of the
employment agreement;
f. for the remainder of the term of the employment agreement,
continued employer contributions to the SRP; and
g. a lump sum payment equal to the amount of interest that
would be earned on any of the foregoing payments subject
to a six-month payment delay under Section 409A using the
six-month London Interbank Offered Rate plus two percent-
age points.
However, the foregoing benefits are not payable if
Mr. Deaton is entitled to benefits under his Change in
Control Agreement discussed below.
“Good reason” as defined in the employment agreement
includes: (i) the assignment to Mr. Deaton of any duties inconsis-
tent with his position (including status, office, title and reporting
requirements), authorities, duties or other responsibilities; (ii) the
relocation of Mr. Deaton’s principal place of employment to a
location more than fifty (50) miles from his principal place of
(1) The value of this benefit is calculated as the aggregate premium amounts
Mr. Deaton would be required to pay for such coverage under the Company’s
premium rate structure in effect on December 31, 2009 for continuation cover-
age under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) minus the aggregate premium amounts Mr. Deaton
would be required to pay for such coverage under the employment agreement.