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EXHIBIT 10.34
AMENDMENT NO. 1999-1 TO THE
1998 EMPLOYEE STOCK OPTION PLAN
This Amendment No. 1999-1 is made to the Baker Hughes
Incorporated 1998 Employee 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 9(a), (b) and (f) of the Plan
are amended in their entirety to read as follows:
"9. Change in Control.
(a) Notwithstanding any provision of the
Plan to the contrary other than Article I, Paragraph 10, in
the event of an occurrence of a Change in Control other than
an event described only in clause (3) of Article I, Paragraph
9(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
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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 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 Article I, Paragraph 9(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 ap-
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proved 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 Com-
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pany, 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)(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 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
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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 9 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,
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
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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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