Exhibit 10.42
BAKER HUGHES INCORPORATED
PERFORMANCE UNIT AWARD AGREEMENT
Name
Awardee
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Date of
Award:
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Number of
Performance Units Awarded:
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AWARD OF PERFORMANCE UNITS
The Compensation Committee (the
“ Committee ”) of the Board of Directors of
Baker Hughes Incorporated, a Delaware corporation (the “
Company ”), pursuant to the Baker Hughes Incorporated
2002 Director & Officer Long-Term Incentive Plan (the “
Plan ”), hereby awards to you, the above-named
awardee, effective as of the Date of Award set forth above, that
number of Performance Units set forth above (each, a “
Performance Unit ”, and collectively, the “
Performance Units ”), on the terms and conditions set
forth in this Performance Unit Award Agreement (this “
Agreement ”).
Each Performance Unit provides you an
opportunity to earn a cash payment based upon the cumulative Baker
Value Added (as that term has been defined by the Committee)
achieved by the Company for the three-year period beginning
January 1, ___, and ending December 31, ___(the “
Performance Period ”) as compared with the Entry Level
Baker Value Added, Expected Value Baker Value Added and Over
Achievement Baker Value Added established by the Committee for the
Performance Period. The Committee may not increase the amount
payable under this Agreement.
If the cumulative Baker Value Added
for the Performance Period is less than the Entry Level Baker Value
Added and a Change in Control of the Company has not occurred on or
before the last day of the Performance Period, then the award
pursuant to this Agreement shall lapse and be forfeited as of
December 31, ___.
The Committee’s determination
of Baker Value Added and the cumulative Baker Value Added for the
Performance Period for purposes of this Agreement shall be binding
upon all persons.
Any amount payable to you pursuant to
this Agreement will be paid to you by the Employer on March ___,
___, unless otherwise provided under the Terms and Conditions. Such
payment will be made to you in exchange for the Performance Units
and thereafter you shall have no further rights with respect to
such Performance Units or the Agreement.
If a Change in Control of the Company
occurs or your employment with the Company and Affiliates
terminates on or before the last day of the Performance Period,
your rights to the Performance Units and a payment under this
Agreement will be determined as provided in the attached Terms and
Conditions of Award Agreements (dated January 23, 2008) (the
“ Terms and Conditions ”).
The Performance Units that are
awarded hereby to you shall be subject to the prohibitions and
restrictions set forth herein with respect to the sale or other
disposition of such Performance Units and the obligation to forfeit
and surrender such Performance Units.
The Performance Units and your rights
under this Agreement may not be sold, assigned, pledged, exchanged,
hypothecated or otherwise transferred, encumbered or disposed of
(other than by will or the applicable laws of descent and
distribution). Any such attempted sale, assignment, pledge,
exchange, hypothecation, transfer, encumbrance or disposition in
violation of this Agreement shall be void and the Company Group
shall not be bound thereby.
Capitalized terms that are not
defined herein shall have the meaning ascribed to such terms in the
Plan or the Terms and Conditions.
In accepting the award of Performance
Units set forth in this Agreement you accept and agree to be bound
by all the terms and conditions of the Plan, this Agreement and the
Terms and Conditions.
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BAKER HUGHES INCORPORATED
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Chad C. Deaton — Chairman &
CEO |
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2
BAKER HUGHES INCORPORATED
TERMS AND CONDITIONS
OF
PERFORMANCE UNIT AWARD AGREEMENTS
(January 23, 2008)
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CHANGE IN CONTROL/TERMINATION OF EMPLOYMENT. The
following provisions will apply in the event a Change in Control of
the Company occurs, or your employment with the Company and all
Affiliates (collectively, the “ Company Group ”)
terminates, before the last day of the Performance Period (as that
term is defined in the Performance Unit Agreement awarded to you
(the “ Agreement ”)). |
1.1
Termination Generally . If your employment with the Company
Group terminates on or before the last day of the Performance
Period for any reason other than one of the reasons described in
Sections 1.2 through 1.5 below, all of your rights in the
Agreement, including all rights to the Performance Units granted to
you, will lapse and be completely forfeited on the date your
employment terminates.
1.2
Potential or Actual Change in Control .
(i)
Termination Without Cause or for Good Reason in Connection With
a Potential Change in Control on or Before the Last Day of the
Performance Period . If (a) the Company Group terminates your
employment without Cause on or before the last day of the
Performance Period prior to a Change in Control of the Company
(whether or not a Change in Control ever occurs) and such
termination is 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 of the Company or is
otherwise in connection with or in anticipation of a Change in
Control of the Company (whether or not a Change in Control ever
occurs) or (b) you terminate your employment with the Company
Group for Good Reason on or before the last day of the Performance
Period prior to a Change in Control of the Company (whether or not
a Change in Control ever occurs) and such termination or 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 of the Company or is otherwise in connection with
or in anticipation of a Change in Control of the Company (whether
or not a Change in Control ever occurs), then the Company will pay
to you in cash an amount determined under the following formula in
lieu of any other amounts under the Agreement:
(1) multiplied by (2) multiplied by (3) divided by
(4)
where
(1) is $100, (2) is the number of Performance Units that
were awarded to you under the Agreement, (3) is the number of
days from (and including) the first day of the Performance Period
to (and including) the day before the date your employment
relationship with the Company Group terminates as described in this
Section 1.2(i), and (4) is the number of days during the
Performance Period. Any amount payable to you pursuant to this
Section 1.2(i) will be paid by the
1
Company to you
ten (10) business days after the date of your Separation From
Service if you are not a Specified Employee or on the date that is
six months following your Separation From Service if you are a
Specified Employee. Such payment will be made to you in exchange
for the Performance Units and thereafter you shall have no further
rights with respect to such Performance Units or the Agreement and
the Company Group will have no further obligations to you pursuant
to the Performance Units or the Agreement. For purposes of these
Terms and Conditions, “Separation From Service”
has the meaning ascribed to that term in Section 409A and
“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. For purposes of these Terms and
Conditions, “Section 409A” means section
409A of the Internal Revenue Code of 1986, as amended and the
Department of Treasury rules and regulations is
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