Baker Hughes 2009 Annual Report Download - page 46

36 Baker Hughes Incorporated
If the Senior Executive’s employment were to have been terminated by him for Good Reason or by us (or our successor) without
Cause in connection with a Change of Control on December 31, 2009, and a Change of Control were to have occurred on that
date, we estimate that the value of the payments and benefits described in clauses (a) through (j) above that he would have been
eligible to receive is as follows:
Payment or Benefit Chad C. Deaton Peter A. Ragauss Alan R. Crain Martin S. Craighead John. A. O’Donnell
Clause (a) $ 3,465,000 $ 1,950,000 $ 1,419,000 $ 1,950,000 $ 1,200,000
Clause (b) $ 1,148,884 $ 272,175 $ 328,124 $ 112,924 $ 146,042
Clause (c) $ 5,525,652 $ 1,620,114 $ 1,516,497 $ 1,365,000 $ 840,000
Clause (d) $ 48,977 $ 63,599 $ 63,599 $ 63,599 $ 51,766
Clause (e) $ 75,000 $ 60,000 $ 60,000 $ 60,000 $ 53,751
Clause (f) $ 1,231,729 $ 473,865 $ 403,660 $ 400,096 $ 280,267
Clause (g) $ 0 $ 0 $ 23,700 $ 0 $ 0
Clause (h) $ 13,805 $ 6,789 $ 5,659 $ 5,378 $ 3,980
Clause (i) $ 30,000 $ 30,000 $ 30,000 $ 30,000 $ 30,000
Clause (j)(4) $ 7,001,901 $ 2,693,092 $ 0 $ 2,286,917 $ 0
Clause (k) $ 279,209 $ 107,237 $ 91,439 $ 94,245 $ 62,063
Accelerated exercisability of stock options $ 1,345,613 $ 401,103 $ 299,522 $ 300,670 $ 146,194
Accelerated vesting of restricted
stock award $ 4,853,431 $ 2,092,087 $ 1,331,792 $ 1,510,390 $ 633,633
Payment in settlement of performance
unit awards under the 2002 D&O Plan $ 5,782,548 $ 1,769,741 $ 1,297,829 $ 1,258,406 $ 551,735
Pro-rata Annual Incentive Plan bonus $ 693,000 $ 267,863 $ 177,375 $ 238,973 $ 105,875
Total $ 31,494,749 $ 11,807,665 $ 7,048,196 $ 9,676,598 $ 4,105,306
(4) The estimated value of all parachute payment tax gross-up payments was calculated utilizing the highest marginal tax rates.
Mr. Barr retired from employment with us on April 30,
2009. The amounts we paid to Mr. Barr in connection with his
retirement are discussed below under the heading “Retirement
Agreement With David H. Barr”.
Baker Hughes Incorporated Executive Severance Plan
On November 1, 2002, we adopted an executive severance
program, the Baker Hughes Incorporated Executive Severance
Plan (the “Executive Severance Plan”) for our executives who
are classified by us as United States executive salary grade sys-
tem employees, including the Senior Executives. The Executive
Severance Plan provides for payment of certain benefits to each
of these executives as a result of an involuntary termination
of employment provided that (i) the executive signs a release
agreement substantially similar to the form of release agree-
ment set forth in the Executive Severance Plans, (ii) during
the two-year period commencing on the executive’s date
of termination of employment he complies with the noncom-
petition and nonsolicitation agreements contained in the
Executive Severance Plan and (iii) the executive does not
disclose our confidential information. Any amounts payable
under the Executive Severance Plan are reduced by the
amount of any severance payments payable to the Senior
Executive by us under any other plan, program or individual
contractual arrangement.
Payments in the Event of a Termination of Employment
by the Senior Executive for Good Reason or by the
Company or its Successor Without Cause
We (or our successor) will pay severance benefits to
a Senior Executive if he incurs an Involuntary Termination.
“Involuntary Termination” means the complete severance of a
Senior Executive’s employment relationship with us: (i) because
his position is eliminated; (ii) because he and we agree to his
resignation of his position at our request; (iii) which occurs in
conjunction with, and during the period that begins 90 days
before and ends 180 days after, an acquisition, merger, spin-off,
reorganization (either business or personnel), facility closing or
discontinuance of the operations of the divisions in which he
is employed; or (iv) for any other reason which is deemed an
Involuntary Termination by us.
An Involuntary Termination does not include: (i) a termina-
tion for cause; (ii) a transfer of employment among us and our
affiliates; (iii) a temporary absence, such as a Family and Medical
Leave Act leave or a temporary layoff in which the Senior Exec-
utive retains entitlement to re-employment; (iv) the Senior Exec-
utive’s death, disability or Retirement (as defined in the Executive
Severance Plan); or (v) a voluntary termination by the employee.
If the Senior Executive meets the criteria for payment of
severance benefits due to an Involuntary Termination, we (or
our successor) will pay him the following benefits in addition
to any benefits he is due under our employee benefit plans
and equity and incentive compensation plans:
a. a lump sum payment equal to one and one-half times the
Senior Executive’s annual base salary in effect immediately
prior to his termination of employment; and
b. outplacement services for a period of 12 months, but not
in excess of $10,000.