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EXHIBIT 10.20
AMENDMENT NO. 1999-1 TO THE
1993 STOCK OPTION PLAN
This Amendment No. 1999-1 is made to the Baker Hughes
Incorporated 1993 Stock Option Plan ("the Plan"). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Plan.
WHEREAS, Baker Hughes Incorporated (the "Company") has
determined that it is in its best interest and that of its stockholders to amend
the Plan as set forth herein;
NOW, THEREFORE, the Plan is amended as follows:
1. Article I, Paragraphs 11(a), (b) and (f) of the Plan are
amended in their entirety to read as follows:
"11. Change in Control.
(a) Notwithstanding any provision of the
Plan to the contrary, in the event of an occurrence of a
Change in Control other than an event described only in clause
(3) of Paragraph 11(f) of the Plan, all options granted
pursuant to this Plan shall become fully vested and
exercisable.
(b) Notwithstanding any provision of the
Plan to the contrary, all outstanding options held by an
Employee Optionee shall become fully vested and exercisable as
of the effective date of termination of such Employee
Optionee's employment if (i) such Employee Optionee'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, (ii) such Employee Optionee terminates his or her
employment for Good Reason prior to a Change in Control
(whether or not a Change in Control ever occurs) and the
circumstance
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or event which constitutes Good Reason occurs at the request
or direction of the Person described in clause (i), (iii) such
Employee Optionee's employment is terminated by the Company
without Cause or by the Employee Optionee 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) or (iv) such Employee Optionee's
employment is terminated by the Company without Cause or by
the Employee Optionee for Good Reason, in either case within 2
years following the occurrence of a Change in Control
described in clause (3) of Paragraph 11(f) of the Plan.
(f) A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(1) any Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company
or its affiliates) representing 20% or more of the combined
voting power of the Company's then outstanding securities,
excluding any Person who becomes such a Beneficial Owner in
connection with a transaction described in clause (i) of
paragraph (3) below; or
(2) the following individuals cease
for any reason to constitute a majority of the number of
directors then serving: individuals who, on the date hereof,
constitute the Board of Directors of the Company and any new
director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of directors of the Company)
whose appointment or election by the Board of Directors of the
Company or nomination for election by the Company's
stockholders was approved
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or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on
the date hereof or whose appointment, election or nomination
for election was previously so approved or recommended; or
(3) there is consummated a merger or
consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation, other
than (i) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit
plan of the Company or any subsidiary of the Company, at least
65% of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company (not including in
the securities Beneficially Owned by such Person any
securities acquired directly from the Company or its
Affiliates other than in connection with the acquisition by
the Company or its Affiliates of a business) representing 20%
or more of the combined voting power of the Company's then
outstanding securities; or
(4) there is consummated a merger or
consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation, other
than a merger or consolidation immediately following which the
individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of
the Company,
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the entity surviving such merger or any parent thereof (or a
majority plus one member where such board comprises an odd
number of members); or
(5) the stockholders of the Company
approve a plan of complete liquidation or dissolution of the
Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the
Company of all or substantially all of the Company's assets to
an entity, at least 65% of the combined voting power of the
voting securities of which are owned by stockholders of the
Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record holders of
the common stock of the Company immediately prior to such
transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the
Company immediately following such transaction or series of
transactions."
2 Article II, Paragraph 3(b)(2)(i) of the Plan is amended by
inserting the phrase "(but in no event later than the Nonqualified Option
Expiration Date)" after the second appearance of the phrase "termination of
employment" therein.
3 Article II, Paragraph 3(b)(2)(iv) of the Plan is amended
in its entirety to read as follows:
"At the expiration of a period of three months after
the Employee Optionee's employment is terminated (but in no
event later than the Nonqualified Option Expiration Date) if
the
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Employee Optionee's employment is terminated for any reason
other than his death, retirement, disability or the reasons
specified in this Article II, Paragraph 3(b)(2)(i), if such
termination of employment occurs prior to a Change in Control
or after the second anniversary of a Change in Control, and
two years following such termination of employment (but in no
event later than the Nonqualified Option Expiration Date) if
such termination is either by the Company without Cause or by
the Employee Optionee for Good Reason and, in either case,
occurs within two years following a Change in Control (in each
case, as such term is defined in Article I, Paragraph 11(f)
hereof)."
4 Article III, Paragraph 3(b)(2)(i) of the Plan is amended
by inserting the phrase "(but in no event later than the ISO Expiration Date)"
after the second appearance of the phrase "termination of employment" therein".
5 Article III, Paragraph 3(b)(2)(iv) of the Plan is amended
in its entirety to read as follows:
"At the expiration of a period of three months after
the Employee Optionee's employment is terminated (but in no
event later than the ISO Expiration Date) if the Employee
Optionee's employment is terminated for any reason other than
his death, retirement, disability or the reasons specified in
this Article III, Paragraph 3(b)(2)(i), if such termination of
employment occurs prior to a Change in Control or after the
second anniversary of a Change in Control, and two years
following such termination of employment (but in no event
later than the ISO Expiration Date) if such termination is
either by the Company without Cause or by the Employee
Optionee for Good Reason and, in either case, occurs within
two years following a Change in Control (in each case, as such
term is defined in Article I, Paragraph 11(f) hereof)."
6 Article IV, Paragraph 5(b)(2)(i) of the Plan is amended by
inserting the phrase "(but in no event
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later than the Option Expiration Date)" after the second appearance of the
phrase "termination of service" therein.
7 Article IV, Paragraph 5(b)(2)(iv) of the Plan is amended
in its entirety to read as follows:
"At the expiration of a period of three months after
the Non-Employee Director's directorship is terminated (but in
no event later than the Option Expiration Date) if the
Non-Employee Director's directorship is terminated for any
reason other than the reasons specified in Article IV,
Paragraphs 5(b)(2)(i) through 5(b)(2)(iii), if such
termination of directorship occurs prior to a Change in
Control or after the second anniversary of a Change in
Control, and two years following such termination of
directorship (but in no event later than the Option Expiration
Date) if such termination occurs within two years following a
Change in Control (in each case, as such term is defined in
Article I, Paragraph 11(f) hereof)."
The effective date of this Amendment No. 1999-1 shall be
January 27, 1999; provided, however, that, in the event that (A) the Company is
party to a transaction which is otherwise intended to qualify for "pooling of
interests" accounting treatment, (B) such transaction constitutes a Change in
Control within the meaning of the Plan and (C) individuals who satisfy the
requirements in clauses (i) and (ii) below constitute at least two-thirds (2/3)
of the number of directors of the entity surviving such transaction or any
parent thereof: individuals who (i) immediately prior to such transaction
constitute the Board of Directors of the Company and (ii) on the date hereof
constitute the Board of Directors of the Company and any new director (other
than a director whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of directors of
the Company) whose appointment or election by the Board of Directors of the
Company or nomination for election by the Company's stockholders was approved or
recommended, by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
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election or nomination for election was previously so approved or recommended
then (a) this Amendment No. 1999-1 shall, to the extent practicable, be
interpreted so as to permit such accounting treatment, and (b) to the extent
that the application of clause (a) of this sentence does not preserve the
availability of such accounting treatment, then, to the extent that any
provision or combination of provisions of this Amendment No. 1999-1 disqualifies
the transaction as a "pooling" transaction (including, if applicable, this
entire Amendment No. 1999-1), the Board of Directors of the Company shall amend
such provision or provisions if and to the extent necessary (including declaring
such provision or provisions to be null and void as of the date hereof) so that
such transaction may be accounted for as a "pooling of interests." All
determinations with respect to this paragraph shall be made by the Company,
based upon the advice of the accounting firm whose opinion with respect to
"pooling of interests" is required as a condition to the consummation of such
transaction. Except as herein modified, the Plan shall remain in full force and
effect.
BAKER HUGHES INCORPORATED
By:
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Name: G.S. Finley
Title: Senior Vice President
and Chief Administrative Officer
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