AMENDMENT TO
BAKER HUGHES INCORPORATED
2002 EMPLOYEE LONG-TERM INCENTIVE PLAN
THIS
AGREEMENT by Baker Hughes Incorporated,
WHEREAS ,
effective as of March 6, 2002, the Board of Directors of Baker
Hughes Incorporated (the “ Board of Directors ”)
adopted the Baker Hughes Incorporated 2002 Employee Long-Term
Incentive Plan (the “ Plan ”);
WHEREAS ,
the Board of Directors reserved the right in Section 15.1 to
amend the Plan; and
WHEREAS ,
the Board of Directors has determined to amend the Plan to bring
the Plan into documentary compliance with section 409A of the
Internal Revenue Code of 1986, as amended;
NOW,
THEREFORE , the Board of Directors agrees that effective
July 24, 2008, the Plan is amended as follows:
1. Section 2.1
of the Plan is hereby amended by adding the following new
capitalized terms thereto:
“
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.
“
Disability ” shall mean (a) the inability of the
Grantee to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (b) by
reason of any medically determinable physical or mental impairment
of the Grantee which can be expected to result in death or can be
expected to last for a continuous period of not less than
12 months, the receipt by the Grantee of income replacement
benefits for a period of not less than three months under an
accident or health plan covering employees of
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the Company or
any Affiliate of the Company that is required to be treated as a
single employer together with the Company under section 414 of the
Code.
“Dividend Equivalent”
means a payment equivalent in amount
to dividends paid to the Company’s stockholders.
“Entity” means any corporation, partnership, association,
joint-stock company, limited liability company, trust,
unincorporated organization or other business entity.
“Incumbent Director”
means —
(a) a member of
the Board on July 24, 2008 or
(1) who becomes a
member of the Board after July 24, 2008;
(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.
“
Grantee ” means the person to whom an Award is
granted.
“
Merger ” means a merger, consolidation or similar
transaction.
“
Section 409A ” means section 409A of the Code and
Department of Treasury rules and regulations issued
thereunder.
“Specified Owner”
means any of the
following:
(a) an Affiliate
of Baker Hughes;
(b) an employee
benefit plan (or related trust) sponsored or maintained by Baker
Hughes or any Affiliate of Baker Hughes;
(c) 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
(d) a Person that
becomes a Beneficial Owner of Baker Hughes’ outstanding
Voting Securities representing 30 percent or more of the
combined
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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.
“
Substantial Risk of Forfeiture ” shall have the
meaning ascribed to that term in Section 409A.
2. Effective
for Awards granted under the Plan on or after July 24, 2008,
the definition of “Change in Control” in
Section 2.1 of the Plan is hereby amended by adding at the end
thereof the following provisions:
Notwithstanding
the foregoing, effective for Awards granted under the Plan on or
after July 24, 2008, “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 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 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;
(c) any Person,
other than a Specified Owner, becomes a Beneficial Owner, directly
or indirectly, of securities of Baker Hughes representing
30 percent 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 Ass
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