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EXHIBIT 10.48
BAKER HUGHES INCORPORATED
STOCK OPTION AGREEMENT
<<FULL_NAME>>
GRANTEE
Date of Grant: JANUARY 26, 2005
Total Number of Shares Granted: <<JAN_SO>>
Exercise Price per Share: $42.60
Expiration Date: JANUARY 26, 2015
Term of Award; Vesting Schedule: 3 YEARS, WITH VESTING OF 33 1/3% ON THE ANNIVERSARY DATE OF THE
DATE OF GRANT IN EACH OF THE YEARS 2006, 2007, AND 2008.
Other Terms of Award: TERMS AND CONDITIONS ARE PROVIDED UPON REQUEST AND ARE LOCATED ON
THE BHI INTRANET AT:
HTTP://INTERCHANGE/HUMANRESOURCES/COMPENSATION
GRANT OF OPTION
Pursuant to action taken by the Compensation Committee of the Board of Directors
of Baker Hughes Incorporated, a Delaware corporation (the "Company"), for the
purposes of administration of the BAKER HUGHES INCORPORATED <<PLAN_NAME>> (the
"Plan"), the above-named Grantee is hereby granted <<Type>> stock option to
purchase the above number of shares of the Company's $1 par value per share
common stock at the exercise price stated above for each share subject to this
option, with the exercise price payable at the time of exercise. This option may
not be exercised after the Expiration Date.
By your acceptance of the option, you agree that the option is granted under and
governed by the terms of the Plan, this Stock Option Agreement and the Terms and
Conditions of Option Agreements (dated January 26, 2005).
BAKER HUGHES INCORPORATED
/s/ Chad C. Deaton
----------------------------------
Chad C. Deaton - Chairman & CEO
BAKER HUGHES INCORPORATED
TERMS AND CONDITIONS
OF
OPTION AGREEMENTS
(JANUARY 26, 2005)
These Terms and Conditions are applicable to options granted pursuant to
the Baker Hughes Incorporated [2002 Director & Officer Long-Term Incentive
Plan/2002 Employee Long-Term Incentive Plan] (the "Plan").
1. TERMINATION OF EMPLOYMENT. The following provisions will apply in the
event of Grantee's termination of employment:
1.1 Termination Generally. If Grantee's employment is terminated for any
reason other than
(i) a termination covered by Sections 1.2 through 1.6, or
(ii) a termination, within two years following a Change in Control
(as defined in the Plan) that occurs after the Date of Grant,
either (A) by the Company without Cause (as defined in the
Plan) or (B) by the Grantee for Good Reason (as defined in the
Plan),
the option will wholly and completely terminate on the date of termination
of employment, to the extent it is not then exercisable; however, to the
extent the option is exercisable, Grantee shall have three years from the
date of termination of employment to exercise the option (but in no event
later than the Expiration Date).
1.2 Termination for Cause. If Grantee's employment is terminated for
cause, including (without limitation) fraud, theft, embezzlement committed
against the Company or any of its affiliated companies or a customer of
the Company, or for conflict of interest, unethical conduct, dishonesty
affecting the assets, properties or business of the Company or any of its
affiliated companies, willful misconduct, or continued material
dereliction of duties, the option will wholly and completely terminate on
the date of termination of employment if such termination occurs (i) prior
to a Change of Control that occurs after the Date of Grant or (ii) after
the second anniversary of a Change of Control that occurs after the Date
of Grant. If Grantee's employment is terminated for Cause (as defined in
the Plan), the option will wholly and completely terminate on the date
thirty days following such termination (but not later than the Expiration
Date) if such termination occurs within two years following a Change of
Control that occurs after the Date of Grant.
1.3 Termination without Cause or for Good Reason in Connection with a
Change in Control. Notwithstanding any other provision of this Stock
Option Agreement to the contrary, if a Change in Control of the Company
occurs, the provisions of Article 14 of the Plan shall govern.
1.4 Divestiture of Business Unit. If the Company divests its ownership
in a business unit that employs the Grantee, then the option will be
deemed to be fully vested on the effective date of the Divestiture of the
business unit. The Grantee will have three years in which to exercise the
option. A "Divestiture" includes the disposition of any business unit of
the Company and its subsidiaries to an entity that the Company does not
consolidate in its financial statements, whether the disposition is
structured as a sale or transfer of stock, a merger, a consolidation or a
sale or transfer of assets, or a combination thereof, provided that a
"Divestiture" shall not include a disposition that constitutes a Change in
Control.
1.5 Retirement or Disability. In the event of the retirement (such that
the Grantee's age plus years of service with the Company equals or exceeds
65) or long-term disability of the Grantee, as long-term disability is
determined in the discretion of the Committee (as defined in the Plan),
all granted but unvested options shall immediately vest upon the Grantee's
retirement or long-term disability. The Grantee shall have five years from
the date of termination of employment due to retirement or long-term
disability to exercise the option (but not later than the Expiration
Date).
1.6 Death. Upon the death of the Grantee in active service, all granted
but unvested options shall immediately vest upon the Grantee's death and
otherwise shall be exercisable for a period of one year following
Grantee's death (but in no event later than the Expiration Date).
2. PROHIBITED ACTIVITY. Notwithstanding any other provision of this Stock
Option Agreement, if Grantee engages in a "Prohibited Activity," as
described below, while employed by the Company or any of its affiliates or
within two years after Grantee's employment termination date, then
Grantee's right to exercise any portion of the option, to the extent still
outstanding at that time, shall immediately thereupon wholly and
completely terminate. If an allegation of a Prohibited Activity by Grantee
is made to the Committee, the Committee, in its discretion, may suspend
the exercisability of the option for up to two months to permit the
investigation of such allegation. If it is determined that no Prohibited
Activity was engaged in by Grantee, the period of exercisability of the
option will be increased by the amount of time of the suspension; however,
in no event will the option be exercisable more than ten years from the
date of grant. A "Prohibited Activity" shall be deemed to have occurred,
as determined by the Committee in its sole and absolute discretion, if
Grantee:
(i) divulges any non-public, confidential or proprietary
information of the Company or of its past, present or future
affiliates (collectively, the "Baker Hughes Group"), but
excluding information that (a) becomes generally available to
the public other than as a result of Grantee's public use,
disclosure, or fault, or (b) becomes available to Grantee on a
non-confidential basis after Grantee's employment termination
date from a source other than a member of the Baker Hughes
Group prior to the public use or disclosure by Grantee,
provided that such source is not bound by a confidentiality
agreement or otherwise prohibited from transmitting the
information by a contractual, legal or fiduciary obligation;
or
(ii) directly or indirectly, consults or becomes affiliated with,
conducts, participates or engages in, or becomes employed by,
any business that is competitive with the business of any
member of the Baker Hughes Group, wherever from time to time
conducted throughout the world, including situations where
Grantee solicits or participates in or assists in any way in
the solicitation or recruitment, directly or indirectly, of
any employees of any member of the Baker Hughes Group.
3. CASHLESS EXERCISE. Cashless exercise, in accordance with the terms of the
Plan, shall be available to Grantee for the shares subject to the option.
4. TAX WITHHOLDING. To the extent the exercise of the option results in
taxable income to Grantee, the Company is authorized to withhold from any
remuneration payable to Grantee any tax required to be withheld by reason
of such taxable income.
5. NONTRANSFERABILITY. The option is not transferable by the Grantee
otherwise than by will or by the laws of descent and distribution, and is
exercisable during the Grantee's lifetime only by the Grantee.
6. LIMIT OF LIABILITY. Under no circumstances will the Company be liable for
any indirect, incidental, consequential or special damages (including lost
profits) of any form incurred by any person, whether or not foreseeable
and regardless of the form of the act in which such a claim may be
brought, with respect to the Plan or the Company's role as Plan sponsor.
7. MISCELLANEOUS. The option is granted under and is subject to all of the
provisions of the Plan, including amendments to the Plan, if any. In the
event of a conflict between these Terms and Conditions and the Plan
provisions, the Plan provisions will control. Capitalized terms that are
not defined herein shall have the meaning ascribed to such terms in the
Plan.