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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
by and between
BAKER HUGHES INCORPORATED
and
M. L. LUKENS
January 1, 1998
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EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 1, 1998, by and between M. L.
Lukens (the "Executive") and Baker Hughes Incorporated, a Delaware corporation
(the "Company").
WHEREAS, the Executive is currently employed by the Company as its
Chief Executive Officer and is a party to an employment agreement with the
Company(the "Prior Agreement"), effective as of December 7, 1994, and a
Severance Agreement, dated as of July 23, 1997 (the "Severance Agreement");
WHEREAS, the Board of Directors of the Company (the "Board")
desires to provide for the continued employment of the Executive and to
encourage the attention and dedication to the Company of the Executive as a
member of the Company's management, in the best interests of the Company and its
shareholders;
WHEREAS, the Executive is willing to commit himself to serve the
Company, on the terms and conditions herein provided; and
WHEREAS, the Company and the Executive desire to terminate and
supersede the Prior Agreement (but not the Severance Agreement) and to set forth
in this Agreement the terms and conditions of the Executive's employment;
NOW, THEREFORE, in consideration of the premises and the
respective covenants and agreements of the parties herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Employment; Term. The Company hereby agrees to employ the
Executive, and the Executive hereby accepts such employment, on the terms and
conditions hereinafter set forth. The period of employment of the Executive by
the Company hereunder (the "Employment Period") shall commence on the date first
written above (the "Effective Date") and shall end on the Executive's Date of
Termination (as defined in Section 7(b) hereof). The term of this Agreement (the
"Term") shall begin on the Effective Date and shall end on the third anniversary
thereof; provided, that, beginning on January 1, 1999 and on each January 1
thereafter, the Term shall automatically be extended for one additional year
unless, prior to the September 30 of the preceding year, the Company or the
Executive shall have given notice to not extend the Term.
2. Position and Duties. As of the Effective Date, the Executive
shall serve as Chairman of the Board, President and Chief Executive Officer of
the Company, in which capacity the Executive shall perform the usual and
customary duties of such office, which shall be those normally inherent in such
capacity in U.S. publicly held corporations of similar size and character.
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The Executive agrees and acknowledges that, in connection with his employment
relationship with the Company, the Executive owes fiduciary duties to the
Company and will act accordingly.
During the Employment Period, the Executive agrees to devote
substantially his full time, attention and energies to the Company's business
and agrees to faithfully and diligently endeavor to the best of his ability to
further the best interests of the Company. The Executive shall not engage in any
other business activity, whether or not such business activity is pursued for
gain, profit or other pecuniary advantage. Subject to the covenants of Section 9
herein, this shall not be construed as preventing the Executive from investing
his own assets in such form or manner as will not require his services in the
daily operations of the affairs of the companies in which such investments are
made. Further, subject to Section 9 herein, the Executive may serve as a
director of other companies so long as such service is not injurious to the
Company and so long as such service does not present the Executive with a
conflict of interest.
In keeping with the Executive's fiduciary duties to the Company,
the Executive agrees that he shall not, directly or indirectly, become involved
in any conflict of interest, or upon discovery thereof, allow such a conflict to
continue. Moreover, the Executive agrees that he shall promptly disclose to the
Board any facts which might involve any reasonable possibility of a conflict of
interest.
Circumstances in which a conflict of interest on the part of the
Executive would or might arise, and which should be reported immediately by the
Executive to the Board, include the following: (a) ownership of a material
interest in, acting in any capacity for, or accepting directly or indirectly any
payments, services or loans from a supplier, contractor, subcontractor, customer
or other entity with which the Company does business; (b) misuse of information
or facilities to which the Executive has access in a manner which will be
detrimental to the Company's interest; (c) disclosure or other misuse of
Confidential Information (as defined in Section 9); (d) acquiring or trading in,
directly or indirectly, other properties or interests connected with the design,
manufacture or marketing of products designed, manufactured or marketed by the
Company; (e) the appropriation to the Executive or the diversion to others,
directly or indirectly, of any opportunity in which it is known or could
reasonably be anticipated that the Company would be interested; and (f) the
ownership, directly or indirectly, of a material interest in an enterprise in
competition with the Company or its dealers and distributors or acting as a
director, officer, partner, consultant, employee or agent of any enterprise
which is in competition with the Company or its dealers or distributors.
Further, the Executive covenants, warrants and represents that he shall:
(i) Devote his full and best efforts to the fulfillment of his
employment obligations;
(ii) Exercise the highest degree of fiduciary loyalty and care and
the highest standards and conduct in the performance of his duties; and
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(iii) Endeavor to prevent any harm, in any way, to the business or
reputation of the Company.
3. Place of Performance. In connection with the Executive's
employment by the Company, the Executive's principal business address shall be
at the Company's current principal executive offices in Houston, Texas (the
"Principal Place of Employment") or in such other place as the Executive and the
Company may agree.
4. Compensation and Related Matters.
(a) Base Salary. During the Employment Period, the Company
shall pay the Executive an annual base salary ("Base Salary") in an amount that
shall be established from time to time by the Board or the Compensation
Committee of the Board (the "Compensation Committee"), payable in approximately
equal installments in accordance with the Company's customary payroll practices;
provided, however, that the Base Salary shall be not less than the Executive's
annual base salary on the day immediately prior to the date hereof. The Base
Salary shall be reviewed at least annually during the Employment Period and may
be increased but not decreased during the Employment Period.
(b) Bonuses. During the Employment Period, the Executive
shall be eligible to participate in the Company's 1995 Employee Annual Incentive
Compensation Plan, as amended (the "Annual Incentive Plan"), or any successor
plan thereto. The bonus opportunity afforded the Executive pursuant to this
Section 4(b) may vary from year to year and any bonus earned thereunder (the
"Annual Bonus") shall be paid at a time and in a manner consistent with the
Company's customary practice.
(c) Equity-Based Compensation. During the Employment Period,
the Executive shall be entitled to receive equity-based compensation awards on
substantially similar terms and conditions no less favorable than awards made to
the other senior executive officers of the Company. Such awards shall be
commensurate with the awards normally granted to the chief executive officer of
other public companies similar in size and character to the Company. Such awards
may be granted pursuant to the terms of an equity-based compensation plan of the
Company or otherwise, provided that any grant made other than pursuant to any
such Company plan shall be approved by either the Board or the Compensation
Committee.
(d) Expenses. The Company shall promptly reimburse the
Executive for all reasonable business expenses incurred during the Employment
Period by the Executive in performing services hereunder, including all expenses
of travel and living expenses while away from home on business or at the request
of and in the service of the Company, provided that such expenses are incurred
and accounted for in accordance with the policies and procedures established by
the Company.
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(e) Other Benefits. During the Employment Period, the
Executive shall be entitled to participate in all of the employee benefit plans
and arrangements made available by the Company to its other senior executive
officers, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements, and shall be entitled to
all perquisites and special benefits suitable to the character of the Chief
Executive Officer, including, but not limited to, executive life insurance, club
memberships, financial planning (including tax return preparation) and an annual
physical examination. Notwithstanding the foregoing, the Company shall have the
right to change, amend or discontinue any benefit plan, program, or perquisite,
so long as such changes are similarly applicable to senior executive officers of
the Company generally.
(f) Vacation. During the Employment Period, the Executive
shall be entitled to vacation in accordance with the standard written policy of
the Company with regard to vacations of employees.
(g) Services Furnished. During the Employment Period, the
Executive shall at all times be provided with office space, stenographic
assistance and such other facilities and services as are suitable to his
position and no less favorable than those being provided to the Executive by the
Company as of the date hereof.
5. Offices. Subject to Sections 2, 3 and 4 hereof, the
Executive agrees to serve without additional compensation, if elected or
appointed thereto, as a director of any of the Company's subsidiaries and as a
member of any committees of the board of directors of any such corporations, and
in one or more executive positions of any of the Company's subsidiaries,
provided that the Executive is indemnified for serving in any and all such
capacities on a basis no less favorable than is currently or may be provided to
any other director of the Company, any of its subsidiaries, or in connection
with any such executive position, as the case may be.
6. Termination. The Employment Period shall end in the event
of a termination of the Executive's employment in accordance with any of the
provisions of Section 6 or 7, and the Term shall expire in the event of a
termination of Executive's employment by the Company for Cause or by the
Executive without Good Reason, in each case, on the Executive's Date of
Termination.
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
(b) Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of his duties hereunder for the entire
period of ninety (90) days in the aggregate during any period of twelve (12)
consecutive months or it is reasonably expected that such disability will exist
for more than such period of time, and within thirty (30) days after written
Notice of Termination (as defined in Section 7) is given (which notice may be
given during such
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ninety (90) day period) shall not have returned to the performance of his duties
hereunder on a full-time basis, the Company may terminate the Executive's
employment hereunder for "Disability."
During any period that the Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), the Executive shall continue to receive his Base Salary
at the rate in effect at the beginning of such period as well as all other
payments and benefits set forth in Section 4 hereof, reduced by any payments
made to the Executive during the Disability Period under the disability benefit
plans of the Company then in effect or under the Social Security disability
insurance program.
(c) Cause. The Company may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have "Cause" to terminate the Executive's employment hereunder upon the
occurrence of any of the following events:
(i) the commission by the Executive of an act of fraud,
embezzlement, theft or other criminal act constituting a felony;
(ii) a material breach by the Executive of any provision of
this Agreement;
(iii) the failure by the Executive to perform any and all
material covenants under this Agreement for any reason other than the
Executive's death, Disability or following the Executive's delivery of a
Notice of Termination for Good Reason; or
(iv) a material breach by the Executive of the Company's
Standards of Ethical Conduct.
provided, that, the Executive shall have thirty (30) business days from the date
on which the Executive receives the Company's Notice of Termination for Cause
under clause (ii), (iii) or (iv) above to remedy any such occurrence otherwise
constituting Cause under such clause (ii), (iii) or (iv).
Cause shall not exist unless and until the Company has delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than two-thirds (2/3) of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice to the
Executive and an opportunity for the Executive, together with his counsel, to be
heard before the Board), finding that in the good faith opinion of the Board,
the Executive was guilty of the conduct set forth in this Section 6(c) and
specifying the particulars thereof in detail.
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(d) Good Reason. The Executive may terminate his
employment hereunder for "Good Reason." Good Reason for the Executive's
termination of employment shall mean the occurrence, without the Executive's
prior written consent, of any one or more of the following;
(i) the assignment to the Executive of any duties
inconsistent with the Executive's position (including status, office,
title and reporting requirements), authorities, duties or other
responsibilities as contemplated by Section 2 of this Agreement;
(ii) the relocation of the Principal Place of Employment to a
location more than fifty (50) miles from the Principal Place of
Employment;
(iii) a material reduction in any element of the Executive's
compensation as set forth in Section 4 hereof, other than in connection
with a Company-wide reduction of such benefits;
(iv) a material breach by the Company of any provision of
this Agreement;
provided, in any case, that the Company shall have thirty (30) business days
from the date on which the Company receives the Executive's Notice of
Termination for Good Reason to remedy any such occurrence otherwise constituting
Good Reason.
(e) Either party hereto may terminate this Agreement at
any time by giving the Board no more than thirty (30) days' prior written
notice, in accordance with Section 7 hereof, of such party's intent to so
terminate this Agreement.
7. Termination Procedure.
(a) Notice of Termination. Any termination of the
Executive's employment by the Company or by the Executive (other than
termination pursuant to Section 6(a) hereof) shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 12
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice that shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
(b) Date of Termination. "Date of Termination" shall mean
(i) if the Executive's employment is terminated pursuant to Section 6(a) above,
the date of the Executive's death, (ii) if the Executive's employment is
terminated pursuant to Section 6(b) above, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to the
performance of his duties on a full-time basis during such thirty (30) day
period), (iii) if the Executive's employment is terminated pursuant to Section
6(c) above, the date specified
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in the Notice of Termination, (iv) if the Executive's employment is terminated
pursuant to Section 6(d) above, the date on which a Notice of Termination is
given or any later date (within thirty (30) days of the date of such Notice of
Termination) set forth in such Notice of Termination and (v) if the Executive's
employment is terminated for any other reason, the date specified in the Notice
of Termination, which date shall be not later than thirty (30) days following
the date on which Notice of Termination is given; provided, however, that, if
within ten (10) days after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning such termination, the Date of Termination shall be the date on
which the dispute is finally determined, either by mutual written agreement of
the parties, by a binding and final arbitration award or by a final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected).
(c) Compensation During Dispute. If a purported
termination occurs during the Term, and such termination is disputed in
accordance with subsection (b) of this Section 7, the Company shall continue to
pay the Executive the full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, Base Salary) and continue
the Executive as a participant in all compensation, benefit and insurance plans
in which the Executive was participating when the notice giving rise to the
dispute was given, until the Date of Termination, determined in accordance with
subsection (b) of this Section 7. Amounts paid under this Section 7(c) are in
addition to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement.
8. Compensation upon Termination or During Disability.
(a) Accrued Obligation Defined. For purposes of this
Agreement, payment of the "Accrued Obligation" shall mean payment by the Company
to the Executive (or his designated beneficiary or legal representative, as
applicable), when due, of all vested benefits to which the Executive is entitled
under the terms of the employee benefit plans in which the Executive is a
participant as of the Date of Termination and a lump sum amount in cash equal to
the sum of (i) the Executive's Base Salary through the Date of Termination, (ii)
any compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay and (iii) any other
amounts due the Executive as of the Date of Termination, in each case to the
extent not theretofore paid.
(b) Disability; Death. Following the termination of the
Executive's employment pursuant to Sections 6(a) or (b) hereof, the Company
shall pay to the Executive (or his designated beneficiary or legal
representative, if applicable)): (i) the Accrued Obligation, (ii) an amount in
cash equal to one-half of the Executive's Base Salary as in effect on the Date
of Termination (for each year and prorated for any partial years) for the
remainder of the Term (as such Term may have been extended), and (iii) a lump
sum in cash equal to the Executive's Expected Value (as defined in the Annual
Incentive Plan, and assuming for this purpose that any performance goals under
such Plan for such Plan year have been achieved), or similar award opportunity
under a successor plan thereto, for the year in which the Date of
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Termination occurs. The amount payable pursuant to clause (ii) above shall be
paid in accordance with the Company's ordinary payroll practices.
(c) By the Company for Cause. If during the Term the
Executive's employment is terminated by the Company pursuant to Section 6(c)
hereof, the Company shall pay to the Executive the Accrued Obligation within
thirty (30) days following the Date of Termination. Following such payment, the
Company shall have no further obligations to the Executive other than as may be
required by law or the terms of an employee benefit plan of the Company.
(d) By the Executive Without Good Reason. If during the
Term the Executive terminates his employment for any reason other than Good
Reason, the Company shall pay to the Executive the Accrued Obligation within
thirty (30) days following the Date of Termination. Following such payment, the
Company shall have no further obligations to the Executive other than as may be
required by law or the terms of an employee benefit plan of the Company.
(e) By the Company Without Cause or by the Executive
for Good Reason. If during the Term the Executive's employment is terminated by
the Company other than for Cause, death or Disability or if the Executive
terminates his employment for Good Reason, then
(i) the Company shall pay the Executive the Accrued
Obligation;
(ii) the Company shall continue to pay to the
Executive his Base Salary (at the rate in effect as of the Date of
Termination) for the remainder of the Term (as such Term may have been
extended), payable consistent with the Company's normal payroll
practices; provided, however, that for purposes of this clause (ii), Base
Salary shall be deemed to increase or decrease on each January 1
following the Date of Termination by the GNP price deflator adjustment as
published by the Federal government for the previous 12 months,
determined by the then public accounting firm of record of the Company
(that performs the annual audit);
(iii) the Company shall, once a year for the remainder
of the Term (as such Term may have been extended), consistent with the
Company's normal payroll practices, pay to the Executive an amount equal
to the Executive's Expected Value (as defined in the Annual Incentive
Plan, and assuming for this purpose that any performance goals under
such Plan for such Plan year have been achieved), or similar award
opportunity under a successor plan thereto, for the year in which the
Date of Termination occurs, provided, however, that for purposes of this
clause (iii), Expected Value shall be deemed to increase or decrease on
each January 1 following the Date of Termination by the GNP price
deflator adjustment as published by the Federal government
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for the previous 12 months, determined by the then public accounting firm
of record of the Company (that performs the annual audit);
(iv) all equity-based awards then held by Executive
shall become fully vested; and
(v) the Company shall continue to provide to the
Executive the benefits described in Section 4(e) and (g) hereof for the
remainder of the Term (as such Term may have been extended), provided,
that such benefits shall be reduced to the extent benefits of the same
type are received by or made available to the Executive during such
period, and provided, further, that the Executive shall have the
obligation to notify the Company that he is entitled to or receiving such
benefits.
The Company agrees that, if the Executive's employment with the Company
terminates during the Term, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to this Section 8. Further, except with
respect to the benefits provided pursuant to clause (vi) above, the amount of
any payment or benefit provided for in this Agreement shall not be reduced by
any compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
9. Confidential Information; Non-Competition;
Non-Solicitation.
(a) Confidential Information. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all trade secrets,
confidential information, and knowledge or data relating to the Company and its
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company and which shall not have been or hereafter
become public knowledge (other than by acts by the Executive or representatives
of the Executive in violation of this Agreement) (hereinafter being collectively
referred to as "Confidential Information"). The Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those designated by the
Company. Any termination of the Executive's employment or of this Agreement
shall have no effect on the continuing operation of this Section 9(a). The
Executive agrees to return all Confidential Information, including all
photocopies, extracts and summaries thereof, and any such information stored
electronically on tapes, computer disks or in any other manner to the Company at
any time upon request by the Company and upon the termination of his employment
hereunder for any reason.
(b) Non-Competition. During the Employment Period and
for a period of two (2) years following the Date of Termination (such period
following the Employment Period, the "Restricted Period"), the Executive shall
not engage in Competition, as
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defined below, with the Company; provided, that it shall not be a violation of
this Section 9(b) for the Executive to become the registered or beneficial owner
of up to two percent (2%) of any class of the capital stock of a corporation
registered under the Securities Exchange Act of 1934, as amended, provided that
the Executive does not actively participate in the business of such corporation
until such time as this covenant expires.
For purposes of this Agreement, Competition by the
Executive shall mean the Executive's engaging in, or otherwise directly or
indirectly being employed by or acting as a consultant or lender to, or being a
director, officer, employee, principal, agent, stockholder, member, owner or
partner of, or permitting his name to be used in connection with the activities
of any other business or organization which competes, directly or indirectly,
with the business of the Company as the same shall be constituted at any time
during the Term.
(c) Non-Solicitation. During the Restricted Period,
Executive agrees that he will not, directly or indirectly, for his benefit or
for the benefit of any other person, firm or entity, do any of the following:
(i) solicit from any customer doing business with the
Company as of the Date of Termination, business of the same or of a
similar nature to the business of the Company with such customer;
(ii) solicit from any known potential customer of the
Company business of the same or of a similar nature to that which has
been the subject of a known written or oral bid, offer or proposal by the
Company, or of substantial preparation with a view to making such a bid,
proposal or offer, within six (6) months prior to such Date of
Termination;
(iii) solicit the employment or services of, or hire,
any person who was known to be employed by or was a known consultant to
the Company upon the Date of Termination, or within six (6) months prior
thereto; or
(iv) otherwise knowingly interfere with the business
or accounts of the Company.
The Executive and the Company agree and acknowledge that the
Company has a substantial and legitimate interest in protecting the Company's
Confidential Information and goodwill. The Executive and the Company further
agree and acknowledge that the provisions of this Section 9 are reasonably
necessary to protect the Company's legitimate business interests and are
designed to protect the Company's Confidential Information and goodwill.
The Executive agrees that the scope of the restrictions as to
time, geographic area, and scope of activity in this Section 9 are reasonably
necessary for the protection of the Company's legitimate business interests and
are not oppressive or injurious to the public interest.
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The Executive agrees that in the event of a breach or threatened breach of any
of the provisions of this Section 9 the Company shall be entitled to injunctive
relief against the Executive's activities to the extent allowed by law, and the
Executive waives any requirement for the posting of any bond by the Company in
connection with such action. The Executive further agrees that any breach or
threatened breach of any of the provisions of Section 9(a) would cause
irreparable injury to the Company for which it would have no adequate remedy at
law.
(d) Publicity. The Executive agrees that the Company
may use, and hereby grants the Company the nonexclusive and worldwide right to
use, the Executive's name, picture, likeness, photograph, signature or any other
attribute of the Executive's persona (all of such attributes are hereafter
collectively referred to as "Persona") in any media for any advertising,
publicity or other purpose at any time, either during or subsequent to his
employment by the Company. The Executive agrees that such use of his Persona
will not result in any invasion or violation of any privacy or property rights
the Executive may have; and the Executive agrees that he will receive no
additional compensation for the use of his Persona. The Executive further agrees
that any negatives, prints or other material for printing or reproduction
purposes prepared in connection with the use of his Persona by the Company shall
be and are the sole property of the Company.
10. Indemnification; Legal Fees. The Company shall indemnify
the Executive to the fullest extent permitted by the laws of the Company's state
of incorporation in effect at that time, or certificate of incorporation and
by-laws of the Company, whichever affords the greater protection to the
Executive. The Executive will be entitled to any insurance policies the Company
may elect to maintain generally for the benefit of its officers and directors
against all costs, charges and expenses incurred in connection with any action,
suit or proceeding to which he may be made a party by reason of being a director
or officer of the Company.
11. Successors; Binding Agreement.
(a) Company's Successors. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to compensation
from the Company in the same amount and on the same terms as he would be
entitled to hereunder if he terminated his employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section 11 or which otherwise becomes bound
by all the terms and provisions of this Agreement by operation of law.
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(b) Executive's Successors. This Agreement and all
rights of the Executive hereunder shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amounts unless otherwise provided herein
shall be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee or other designee or, if there is no such designee, to the
Executive's estate.
12. Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Mr. Max L. Lukens
3415 Albans
Houston, Texas 77005
If to the Company:
Baker Hughes Incorporated
3900 Essex Lane, Suite 1200
Houston, Texas 70027
Attention: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. Amendment or Modification; Waiver. No provisions of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing signed by the Executive and such officer of
the Company as may be specifically designated by the Board or its compensation
committee. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in Agreement.
14. Arbitration. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Houston, Harris County, Texas,
in accordance with the Commercial
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Arbitration Rules of the American Arbitration Association then in effect or of
such similar organization as the parties hereto may mutually agree. Judgment may
be entered on the arbitrator's award in any court having jurisdiction.
The arbitrators shall award the prevailing party in the
arbitration its costs and expenses, including reasonable attorney's fees,
incurred in enforcing the provisions of this Agreement in arbitration.
15. Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Texas without regard to its conflicts of law principles.
16. Miscellaneous. All references to sections of any statute
shall be deemed also to refer to any successor provisions to such sections. The
obligations of the parties under Sections 8, 9, 10 and 14 hereof shall survive
the expiration of the Term. The compensation and benefits payable to the
Executive or his beneficiary under Section 8 of this Agreement shall be in lieu
of any other severance benefits to which the Executive may otherwise be entitled
upon his termination of employment under any severance plan, program, policy or
arrangement of the Company other than the Severance Agreement, and the Executive
shall not be entitled to receive any benefits under Section 8 hereof if he has
become eligible to receive benefits under the Severance Agreement.
17. Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect throughout the Term. Should any one or more of the
provisions of this Agreement be held to be excessive or unreasonable as to
duration, geographical scope or activity, then that provision shall be construed
by limiting and reducing it so as to be reasonable and enforceable to the extent
compatible with the applicable law.
18. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
19. Release. In consideration of the benefits and
compensation which may be awarded to the Executive pursuant to Section 8 of this
Agreement, the Executive hereby agrees to execute and be bound by, as a
condition precedent to receiving said benefits and compensation, the Release
attached hereto as Exhibit A, such Release being incorporated herein by
reference.
20. Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and, as of the Effective Date, supersedes all prior agreements, promises,
covenants, arrangements, communications,
15
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto; provided, however, that the Severance
Agreement shall not be superseded hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the date first above written.
ATTEST: BAKER HUGHES INCORPORATED
By: By:
---------------------- ----------------------------
Name: Name: John F. Maher
Title: Title: Chairman,
Compensation Committee
M. L. LUKENS
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16
EXHIBIT A
RELEASE
As a material inducement for the Company to enter into this
Agreement, the Executive hereby irrevocably and unconditionally releases,
acquits and forever discharges the Company and its affiliated companies and
their directors, officers, employees and representatives, (collectively
"Releasees"), from any and all claims, liabilities, obligations, damages, causes
of action, demands, costs, losses and/or expenses (including attorneys' fees) of
any nature whatsoever, whether known or unknown, including, but not limited to,
rights arising out of alleged violations of any contracts, express or implied,
any covenant of good faith and fair dealing, express or implied, or any tort, or
any legal restrictions on the Company's right to terminate employees, or any
federal, state or other governmental statute, regulation, or ordinance,
including, without limitation, Title VII of the Civil Rights Act of 1964, and
the Federal Age Discrimination in Employment Act, which the Executive claims to
have against any of the Releasees. In addition, the Executive waives all rights
and benefits afforded by any state laws which provide in substance that a
general release does not extend to claims which a person does not know or
suspect to exist in his favor at the time of executing the release which, if
known by him, must have materially affected the Executive's settlement with the
other person. The only exception to the foregoing are claims and rights that may
arise after the date of execution of this Release.
The Executive represents and acknowledges that in executing this
Release he does not rely and has not relied upon any representation or
statement, oral or written, not set forth herein or in the Agreement made by any
of the Releasees or by any of the Releasees' agents, representatives or
attorneys with regard to the subject matter, basis or effect of this Release,
the Agreement or otherwise.
The Executive represents and agrees that he fully understands his
right to discuss all aspects of this Release with his private attorney, that to
the extent, if any, that he desires, he has availed himself of this right, that
he has carefully read and fully understands all of the provisions of this
Release and that he is voluntarily entering into this Release.
AGREED AND ACCEPTED, on this day of , 19 .
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MAX L. LUKENS
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