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EXHIBIT 10.32
AMENDMENT NO. 1999-1 TO THE LONG TERM
INCENTIVE PLAN OF BAKER HUGHES INCORPORATED
This Amendment No. 1999-1 is made to the Long Term Incentive
Plan of Baker Hughes Incorporated ("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. Section 9(b)(iv)(B)(1) of the Plan is amended by
inserting the phrase "(but in no event later than the Option Expiration Date)"
after the second appearance of the phrase "termination of service" therein.
2. Section 9(b)(iv)(B)(4) of the Plan is amended in its
entirety to read as follows:
"At the expiration of a period of three months after
the Nonemployee Director's directorship is terminated (but in
no event later than the Option Expiration Date) if the
Nonemployee Director's directorship is terminated for any
reason other than the reasons specified above, if such
termination of service occurs prior to a Change in Control or
after the second anniversary of a Change in Control, and two
years following such termination of service (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 Section 16(f) hereof)."
3. Sections 16(a), (b) and (f) of the Plan are amended
in their entirety to read as follows:
"16. Change in Control.
(a) Notwithstanding any provision of the
Plan to the contrary, in the event of an
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occurrence of a Change in Control other than an event
described only in clause (3) of Section 16(f) of the Plan,
all Awards granted pursuant to this Plan shall become fully
vested and, if either an Option or SAR or similar Award,
immediately exercisable.
(b) Notwithstanding any provision of the
Plan to the contrary, all outstanding Awards held by an
Employee shall become fully vested and, if either an Option or
SAR or similar Award, immediately exercisable as of the
effective date of termination of such Employee's employment if
(i) such Employee'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 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 or event which constitutes Good Reason occurs
at the request or direction of the Person described in clause
(i), (iii) such Employee's employment is terminated by the
Company without Cause or by the Employee 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's employment is
terminated by the Company without Cause or by the Employee for
Good Reason, in either case within 2 years following the
occurrence of a Change in Control described in clause (3) of
Section 16(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:
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(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 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
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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, 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
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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."
4. A new Section 16(k) is added to the end of Section 16
of the Plan to read in its entirety as follows:
"Unless specifically provided otherwise in an
Employee Award Agreement dated after January 27, 1999 relating
to an Option, if an Employee's employment is terminated by the
Company without Cause or by the Employee for Good Reason, in
either case within 2 years following a Change in Control, the
Option shall remain exercisable until the earlier to occur of
(i) 2 years following such termination of employment or (ii)
the expiration date provided in the Employee Award Agreement."
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
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directors on the date hereof or whose appointment, 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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