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Exhibit 10.2 AMENDED AND RESTATED CHANGE
IN CONTROL AGREEMENT THIS
AMENDED AND RESTATED AGREEMENT (this " Agreement ") is
entered into by and between BAKER HUGHES INCORPORATED, a Delaware
corporation (the " Company "), and
(the " Executive ") effective as of January 1, 2009.
WHEREAS, the Company considers it
essential to the best interests of its stockholders to foster the
continued employment of key management personnel; and
WHEREAS, the Company recognizes that,
as is the case with many publicly-held corporations, the
possibility of a change in control exists and that such
possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its
stockholders; and WHEREAS, the
Company has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive,
to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility
of a change in control; WHEREAS,
effective
(the " Effective Date ") the Company and the Executive
previously entered into a Change in Control Agreement (the "
Original Change in Control Agreement "); and
WHEREAS, the Company and the
Executive desire to amend and restate the Original Change in
Control Agreement to comply with section 409A of the Internal
Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of
the premises and the mutual covenants herein contained, the Company
and the Executive hereby agree as follows:
1. Definitions and
Interpretation Rules . 1.1
Defined Terms . For purposes of this Agreement, the
following terms shall have the meanings indicated below:
" Affiliate " means
any entity which is a member of (i) the same controlled group
of corporations within the meaning of section 414(b) of the
Code with Baker Hughes, (ii) a trade or business (whether or
not incorporated) which is under common control (within the meaning
of section 414(c) of the Code) with Baker Hughes or
(iii) an affiliated service group (within the meaning of
section 414(m) of the Code) with Baker Hughes.
" Annual Incentive
Plan " means the Baker Hughes Incorporated Annual Incentive
Compensation Plan, as amended and/or restated from time to time,
any guidelines issued pursuant to such plan, and any other annual
incentive bonus plans adopted by the Company from time to time
which are in replacement of such plan.
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" Assets " means
assets of any kind owned by Baker Hughes, including but not limited
to securities of Baker Hughes’ direct and indirect
subsidiaries and Affiliates.
" Baker Hughes " means Baker Hughes Incorporated, a
Delaware corporation, and any successor by merger or otherwise.
" Base Compensation "
means the Executive’s base salary or wages (as defined in
section 3401(a) of the Code for purposes of federal income tax
withholding) from the Company, modified by including any
portion thereof that such Executive could have received in cash in
lieu of any elective deferrals made by the Executive pursuant to
the Supplemental Retirement Plan (other than deferrals of bonuses)
or pursuant to a qualified cash or deferred arrangement described
in section 401(k) of the Code and any elective contributions
under a cafeteria plan described in section 125 of the Code,
and modified further by excluding any bonus, incentive
compensation (including but not limited to equity-based
compensation), commissions, expense reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation (other than elective deferrals by the
Executive under a qualified cash or deferred arrangement described
in section 401(k) of the Code or the Supplemental Retirement
Plan that are expressly included in " Base Compensation "
under the foregoing provisions of this definition), welfare
benefits as defined in ERISA, overtime pay, special performance
compensation amounts and severance compensation.
" Beneficial Owner "
or " Beneficial Ownership " shall have the meaning ascribed
to those terms in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
" Board " means the Board of Directors of Baker
Hughes or other governing body of Baker Hughes or its direct or
indirect parent. " Bonus
Amount " means the sum of (a) the amount of the annual
incentive bonus, if any, paid in cash by the Company under the
Annual Incentive Plan to or for the benefit of the Executive for
services rendered or labor performed during a fiscal year of the
Company and (b) the amount of the discretionary bonus or other
bonus paid outside of the Annual Incentive Plan, if any, paid in
cash by the Company to or for the benefit of the Executive for
services rendered or labor performed during the same fiscal year of
the Company. The Executive’s Bonus Amount shall be determined
by including any portion thereof that such Executive could have
received in cash in lieu of (i) any elective deferrals made by
such Executive pursuant to the Supplemental Retirement Plan or (ii)
elective contributions made on such Executive’s behalf by the
Company pursuant to a qualified cash or deferred arrangement (as
defined in section 401(k) of the Code) or pursuant to a plan
maintained under section 125 of the Code.
" Cause " means
(i) the willful and continued failure by the Executive to
substantially perform the Executive’s duties with the Company
(other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness) after a written
demand for substantial performance is delivered to the Executive by
the Board (or by a delegate appointed by the Board), which demand
specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive’s
duties, or (ii) the willful engaging by the Executive in
conduct which is demonstrably and materially injurious to the
Company or any of its Affiliates, monetarily or otherwise. For
purposes of Sections (i) and (ii) of this definition,
(A) no act, or failure
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to act, on the Executive’s part shall be deemed "willful"
if done, or omitted to be done, by the Executive in good faith and
with reasonable belief that the act, or failure to act, was in the
best interest of the Company and (B) in the event of a dispute
concerning the application of this provision, no claim by the
Company that Cause exists shall be given effect unless the Company
establishes to the Board by clear and convincing evidence that
Cause exists. " Change in
Control " means the occurrence of any of the following events:
(a) the individuals who are
Incumbent Directors cease for any reason to constitute a majority
of the members of the Board;
(b) the consummation of a Merger
of Baker Hughes or an Affiliate of Baker Hughes with another
Entity, unless the individuals and Entities who were the Beneficial
Owners of the Voting Securities of Baker Hughes outstanding
immediately prior to such Merger own, directly or indirectly, at
least fifty percent (50%) of the combined voting power of the
Voting Securities of any of Baker Hughes, the surviving Entity or
the parent of the surviving Entity outstanding immediately after
such Merger; (c) any Person,
other than a Specified Owner, becomes a Beneficial Owner, directly
or indirectly, of securities of Baker Hughes representing thirty
percent (30%) or more of the combined voting power of Baker
Hughes’ then outstanding Voting Securities;
(d) a sale, transfer, lease or
other disposition of all or substantially all of Baker
Hughes’ Assets is consummated (an " Asset Sale "),
unless : (1) the individuals
and Entities who were the Beneficial Owners of the Voting
Securities of Baker Hughes immediately prior to such Asset Sale
own, directly or indirectly, 50 percent or more of the
combined voting power of the Voting Securities of the Entity that
acquires such Assets in such Asset Sale or its parent immediately
after such Asset Sale in substantially the same proportions as
their ownership of Baker Hughes’ Voting Securities
immediately prior to such Asset Sale; or
(2) the individuals who comprise the
Board immediately prior to such Asset Sale constitute a majority of
the board of directors or other governing body of either the Entity
that acquired such Assets in such Asset Sale or its parent (or a
majority plus one member where such board or other governing body
is comprised of an odd number of directors); or
(e) The stockholders of Baker
Hughes approve a plan of complete liquidation or dissolution of
Baker Hughes. " Code "
means the Internal Revenue Code of 1986, as amended, or any
successor act. "
Committee " means, prior to a Change in Control or a Potential
Change in Control, the Compensation Committee of the Board. After a
Change in Control or a Potential Change in Control, "
Committee " means (i) the individuals (not fewer than
three (3) in number) who, on the date six (6) months prior to
the Change in Control constitute the Compensation Committee of the
Board, plus,
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(ii) in the event that fewer than three
(3) individuals are available from the group specified in
clause (i) above for any reason, such individuals as may be
appointed by the individual or individuals so available (including
for this purpose any individual or individuals previously so
appointed under this clause (ii)); provided , however
, that the maximum number of individuals constituting the Committee
after a Change in Control or Potential Change in Control shall not
exceed six (6). "
Company " means Baker Hughes. In the event that the
Executive’s employer is a subsidiary of Baker Hughes, the
term "Company" shall include the Executive’s employer where
appropriate and Baker Hughes will cause the Executive’s
employer to take any actions necessary to satisfy the obligations
of the Company under this Agreement.
" Disability " means the Executive’s incapacity
due to physical or mental illness that has caused the Executive to
be absent from full-time performance of his duties with the Company
for a period of six (6) consecutive months.
" Effective Date "
means the date identified in the introduction of this Agreement.
" Employment Termination
Date " means the date as of which the Executive incurs a
Termination of Employment determined in accordance with the
provisions of Section 5.2.
" Entity " means any corporation, partnership,
association, joint-stock company, limited liability company, trust,
unincorporated organization or other business entity.
" ERISA " means the
Employee Retirement Income Security Act of 1974, as amended, or any
successor act. " Exchange
Act " means the Securities Exchange Act of 1934, as amended, or
any successor act. "
Excise Tax " means the excise tax imposed by section 4999
of the Code or any similar tax payable under any United States
federal, state, or local statute.
" Executive " means the employee identified in the
introduction of this Agreement.
" Expiration Date " shall have the meaning specified
in Section 2. " Good
Reason " for termination by the Executive of his employment
means the occurrence (without the Executive’s express written
consent) after any Change in Control, or prior to a Change in
Control under the circumstances described in clauses (ii) and
(iii) of the second paragraph of the definition of Termination
of Employment (treating all references to " Change in
Control " in paragraphs (a) through (f) below as
references to a " Potential Change in Control "), 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
Executive’s termination for Good Reason:
(a) the assignment to the
Executive of any duties or responsibilities which are substantially
diminished as compared to the Executive’s duties and
responsibilities immediately
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prior to a Change in Control or a material change in the
Executive’s reporting responsibilities, titles or offices as
an executive and as in effect immediately prior to the Change in
Control; (b) a reduction by the
Company in the Executive’s annual Base Compensation 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 Executive’s principal place of employment
to a location outside of a 50-mile radius from the
Executive’s principal place of employment immediately prior
to the Change in Control or the Company’s requiring the
Executive 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 Executive’s business travel obligations
immediately prior to a Change in Control;
(d) the failure by the Company
to pay to the Executive any portion of the Executive’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 Company, or to pay
to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the
Company, within seven (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
Executive participates immediately prior to the Change in Control
which is material to the Executive’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 Executive’s
participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the
amount or timing of payment of benefits provided and the level of
the Executive’s participation relative to other Baker Hughes
executives, as existed immediately prior to the Change in Control;
(f) the failure by the Company
to continue to provide the Executive with benefits substantially
similar to those enjoyed by the Executive under any of the
Company’s pension, savings, life insurance, medical, health
and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control (except
for across the board changes 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), the
taking of any other action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit or Perquisite enjoyed by
the Executive at the time of the Change in Control, or the failure
by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of
years of service with the Company in accordance with the
Company’s normal vacation policy in effect immediately prior
to the time of the Change in Control; or
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(g) any purported termination
of the Executive’s employment which is not effected pursuant
to a notice of termination satisfying the requirements of
Section 5.1. The Executive shall
have the right to terminate his employment for Good Reason even if
he becomes incapacitated due to physical or mental illness. The
Executive’s continued employment shall not constitute consent
to, or a waiver of any rights with respect to, any act or failure
to act constituting Good Reason hereunder.
For purposes of any determination
regarding the existence of Good Reason, any claim by the Executive
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. The Committee’s
determination regarding the existence of Good Reason shall be
conclusive and binding upon all parties unless the
Committee’s determination is arbitrary and capricious.
" Gross-Up Payment "
means the additional amount paid to the Executive pursuant to
Section 3.4. "
Highest Base Compensation " means the Executive’s
annualized Base Compensation in effect immediately prior to
(a) a Change in Control, (b) the first event or
circumstance constituting Good Reason, or (c) the
Executive’s Termination of Employment, whichever is greatest.
"Highest Bonus Amount" means
the average of the three highest Bonus Amounts received by the
Executive with respect to the five fiscal years of the Company
immediately preceding the Executive’s Employment Termination
Date. "Incumbent Director
" means – (a) a
member of the Board on the Effective Date; or
(b) an individual-
(1) who becomes a member of the Board
after the Effective Date; (2) whose
appointment or election by the Board or nomination for election by
Baker Hughes’ stockholders is approved or recommended by a
vote of at least two-thirds of the then serving Incumbent
Directors (as defined herein); and
(3) whose initial assumption of
service on the Board is not in connection with an actual or
threatened election contest.
"Interest Amount" has the meaning specified in
Section 3.3(i). "
Merger " means a merger, consolidation or similar transaction.
" Pension Plan " means
the Baker Hughes Incorporated Pension Plan, as amended from time to
time.
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" Perquisites "
means benefits such as any airline VIP club memberships; country
club and/or health club membership dues and expenses related to the
use of the country club and/or health club; supplemental life
insurance; financial consulting; and office equipment for use in
the home (e.g., cellular telephones, personal digital assistance,
home computers and office accessories similar to the office
accessories available to the Executive in his employment office and
monthly Internet connection fees) that may be provided by the
Company from time to time.
" 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 temporarily holding securities pursuant to an offering
of those securities or (d) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
"Potential Change in Control
" shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred:
(a) the Company enters into an
agreement, the consummation of which would result in the occurrence
of a Change in Control; (b) the
Company or any Person publicly announces an intention to take or to
consider taking actions which, if consummated, would constitute a
Change in Control; (c) any
Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 15 percent or more of
either the then outstanding shares of common stock of the Company
or the combined voting power of the Company’s then
outstanding securities (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Company or its Affiliates); or
(d) the Board adopts a
resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
" Renewal Date " shall
have the meaning specified in Section 2.
"Section 409A" means
section 409A of the Code and the regulations issued by the IRS and
the Department of Treasury thereunder.
"Separation From Service"
shall have the meaning specified in Section 409A.
"Specified Employee" means a
person who is, as of the date of the person’s Separation From
Service a "specified employee" within the meaning of
Section 409A, taking into account the elections made and
procedures established in resolutions adopted by the Administrative
Committee of Baker Hughes.
" Specified Owner " means any of the following:
(a) Baker Hughes;
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(b) an Affiliate of Baker
Hughes; (c) an employee benefit
plan (or related trust) sponsored or maintained by Baker Hughes or
any Affiliate of Baker Hughes;
(d) a Person that becomes a
Beneficial Owner of Baker Hughes’ outstanding Voting
Securities representing 30 percent or more of the combined
voting power of Baker Hughes’ then outstanding Voting
Securities as a result of the acquisition of securities directly
from Baker Hughes and/or its Affiliates; or
(e) a Person that becomes a
Beneficial Owner of Baker Hughes’ outstanding Voting
Securities representing 30 percent or more of the combined
voting power of Baker Hughes’ then outstanding Voting
Securities as a result of a Merger if the individuals and Entities
who were the Beneficial Owners of the Voting Securities of Baker
Hughes outstanding immediately prior to such Merger own, directly
or indirectly, at least 50 percent of the combined voting
power of the Voting Securities of any of Baker Hughes, the
surviving Entity or the parent of the surviving Entity outstanding
immediately after such Merger in substantially the same proportions
as their ownership of the Voting Securities of Baker Hughes
outstanding immediately prior to such Merger.
" Supplemental Retirement
Plan " means the Baker Hughes Incorporated Supplemental
Retirement Plan, as amended from time to time.
" Termination of
Employment " means the termination of the Executive’s
employment relationship with the Company (a) by the Company
without Cause after a Change in Control occurs, or (b) by the
Executive for Good Reason after a Change in Control occurs.
For purposes of this definition, the
Executive’s employment shall be deemed to have been
terminated after a Change in Control, if (a) the
Executive’s employment is terminated by the Company without
Cause prior to a Change in Control (whether or not a Change in
Control ever occurs) and such termination was at the request or
direction of a Person who has entered into an agreement with the
Company, the consummation of which would constitute a Change in
Control; (b) the Executive terminates his employment for Good
Reason prior to a Change in Control (whether or not a Change in
Control ever occurs) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of a
Person who has entered into an agreement with the Company, the
consummation of which would constitute a Change in Control; or
(c) the Executive’s employment is terminated by the
Company without Cause or by the Executive for Good Reason and such
termination or the circumstance or event which constitutes Good
Reason is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control ever occurs).
For purposes of any determination regarding the applicability of
the immediately preceding sentence, any position taken by the
Executive shall be presumed to be correct unless the Company
establishes to the Committee by clear and convincing evidence that
such position is not correct.
"Termination of Employment" does not
include (a) a termination of employment due to the
Executive’s death or Disability, or (b) a termination of
employment by the Executive without Good Reason.
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" Thrift Plan "
means the Baker Hughes Incorporated Thrift Plan, as amended from
time to time. " Voting
Securities " means the outstanding securities entitled to vote
generally in the election of directors or other governing body.
1.2 Number and Gender . As
used in this Agreement, 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 Sections and clauses mean
the sections and clauses of this Agreement.
2. Term of Agreement .
2.1 The " Term " of this
Agreement shall commence on the Effective Date and end on
(a) the last day of the three-year period beginning on the
Effective Date if no Change in Control shall have occurred during
that three-year period (such last day being the " Expiration
Date "); or (b) if a Change in Control shall have occurred
during (i) the three-year period beginning on the Effective
Date or (ii) any period for which the Term of this Agreement
shall have been automatically extended pursuant Section 2.2,
the last day of the two-year period beginning on the date on which
the Change in Control occurred. 2.2
After the expiration of the time period described in
subsection (a) of Section 2.1, and in the absence of a
Change in Control (as described in subsection (b) of
Section 2.1) the "Term" of this Agreement shall be
automatically extended for successive two-year periods beginning on
the day immediately following the Expiration Date (the beginning
date of each successive two-year period being a " Renewal
Date "), unless, not later than 18 months prior to the
Expiration Date or applicable Renewal Date, the Company shall give
notice to Executive that the Term of this Agreement will not be
extended. 3. Compensation
Other Than Severance Payments .
3.1 Equity Based Compensation
. Upon the occurrence of a Change in Control, all options to
acquire Baker Hughes stock, all shares of restricted Baker Hughes
stock, and all stock appreciation rights the value of which is
determined b
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