Exhibit 10.1

 

BAKER HUGHES INCORPORATED
EXECUTIVE SEVERANCE PLAN

 

(As Amended and Restated
Effective May 24, 2016)

 

 

 

 

 

 

 

BAKER HUGHES INCORPORATED
EXECUTIVE SEVERANCE PLAN

 

(As Amended and Restated Effective May 24, 2016)

 

WHEREAS, Baker Hughes Incorporated, a corporation organized and existing under
the laws of the State of Delaware (the “Company”), recognizes that one of its
most valuable assets is its key management executives;

 

WHEREAS, the Company would like to provide severance benefits in the event that
a key management executive is involuntarily terminated in certain circumstances;

 

WHEREAS, the Company previously established the Baker Hughes Incorporated
Executive Severance Plan (the “Plan”) to provide for the payment of severance
pay in appropriate circumstances; and

 

WHEREAS, the Plan is a constituent benefit program maintained under the Baker
Hughes Incorporated Welfare Benefits Plan;

 

WHEREAS, the Company desires to amend and restate the Plan;

 

NOW, THEREFORE, the Company adopts the amendment and restatement of the Program
effective May 24, 2016, except insofar as a later effective date is specified.

 

 

 

 

BAKER HUGHES INCORPORATED
EXECUTIVE SEVERANCE PLAN

 

Table of Contents

 

Page

1. ESTABLISHMENT, OBJECTIVE AND DURATION 1   1.1 Establishment 1   1.2 Objective
1   1.3 Duration 1 2. DEFINITIONS 1   2.1 Capitalized Terms 1   2.2 Number and
Gender 4   2.3 Headings 4 3. ELIGIBILITY 5 4. BENEFITS 5   (a) Base Compensation
5   (b) Outplacement 5 5. OTHER BENEFIT PROGRAMS; PERQUISITES; COMPANY PROPERTY;
EXPENSE ACCOUNT 6   5.1 Other Benefit Programs 6   5.2 Perquisites; Company
Property; Expense Account 6   (a) Perquisites 6   (b) Company Property 6   (c)
Expense Account 6 6. TIME OF BENEFITS PAYMENTS 7 7. WITHHOLDING 7 8. REDUCTION
FOR OTHER SEVERANCE BENEFITS; NON-EXCLUSIVITY OF RIGHTS; STATUTORY SEVERANCE 7  
8.1 Reduction for Other Severance Benefits 7   8.2 Non-Exclusivity of Rights 7  
8.3 Statutory Severance 8 9. DEATH OF PARTICIPANT 8 10. NON-SOLICITATION;
CONFIDENTIAL INFORMATION 8   10.1 Non-Solicitation 8   10.2 Confidential
Information 8

 

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Page

11. UNFUNDED ARRANGEMENT 9 12. ADMINISTRATION OF THE PLAN 9   12.1 Plan
Administrator 9   12.2 Records and Procedures 9   12.3 Self-Interest of Plan
Administrator 9   12.4 Compensation and Bonding 9   12.5 Plan Administrator
Powers and Duties 10   12.6 Reliance Upon Documents, Instruments, etc 10 13.
AMENDMENT AND TERMINATION 10 14. CLAIMS REVIEW PROCEDURES; CLAIMS APPEALS
PROCEDURES 10   14.1 Claims Review Procedures 10   14.2 Claims Appeals
Procedures 11 15. PARTICIPATION IN THE PLAN BY AFFILIATES 12   15.1 Adoption
Procedure 12   15.2 No Joint Venture Implied 13 16. DISPUTED PAYMENTS AND
FAILURES TO PAY 13 17. MISCELLANEOUS 14   17.1 Plan Not an Employment Contract
14   17.2 Alienation Prohibited 14   17.3 Severability 14   17.4 Binding Effect
14   17.5 Arbitration 14   17.6 Governing Law 15

Exhibit A  Schedule of Benefits 17

  

 

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BAKER HUGHES INCORPORATED
EXECUTIVE SEVERANCE PLAN

 

1.ESTABLISHMENT, OBJECTIVE AND DURATION

 

1.1 Establishment. Baker Hughes Incorporated, a Delaware corporation, previously
established a severance plan for certain designated employees to be known as the
“Baker Hughes Incorporated Executive Severance Plan” (the “Plan”).

 

1.2 Objective. The Plan is designed to attract and retain certain designated
employees of the Company (defined below) and to provide replacement income if
their employment is terminated because of Involuntary Terminations.

 

1.3 Duration. The Plan, as it may be amended by the Board (defined below) from
time to time, shall remain in effect until the Board terminates the Plan.

 

2.DEFINITIONS

 

2.1 Capitalized Terms. Whenever used in this Plan, the following capitalized
terms in this Section 2.1 shall have the meanings set forth below:

 

“Affiliate” means any entity which is a member of (i) of the same controlled
group of corporations within the meaning of section 414(b) of the Code, (ii) a
trade or business (whether or not incorporated) which is under common control
(within the meaning of section 414(c) of the Code), or (iii) an affiliated
service group (within the meaning of section 414(m) of the Code) with Baker
Hughes.

 

“Baker Hughes” means Baker Hughes Incorporated, a Delaware corporation.

 

“Base Compensation” means a Participant’s base salary or wages measured on an
annual basis (as defined in section 3401(a) of the Code for purposes of federal
income tax withholding) from the Company, modified by including any portion
thereof that such Participant could have received in cash in lieu of (i) any
deferrals made by the Participant pursuant to the Baker Hughes Incorporated
Supplemental Retirement Plan or (ii) elective contributions made on his behalf
by the Company pursuant to a qualified cash or deferred arrangement described in
section 401(k) of the Code and any elective contributions under a cafeteria plan
described in section 125, and modified further by excluding any bonus, incentive
compensation, commissions, expense reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation
(other than elective contributions to the Company’s qualified cash or deferred
arrangement described in section 401(k) of the Code), welfare benefits as
defined in ERISA, overtime pay, special performance compensation amounts and
severance compensation.

 

“Benefits” means the severance benefits a Participant is entitled to receive
pursuant to Section 4 hereof. Other benefits as specified in Section 5 are not
considered severance benefits for purposes of the Plan.

 

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“Board” means the Board of Directors of Baker Hughes.

 

“Cause” means (i) the willful and continued failure by the Participant to
substantially perform the Participant’s duties with the Company (other than any
such failure resulting from the Participant’s incapacity due to physical or
mental illness) after a written demand for substantial performance is delivered
to the Participant by the Board (or by a delegate appointed by the Board), which
demand specifically identifies the manner in which the Board believes that the
Participant has not substantially performed the Participant’s duties, or
(ii) the willful engaging by the Participant in conduct which is demonstrably
and materially injurious to the Company or any of its Affiliates, monetarily or
otherwise. For purposes of Sections (i) and (ii) of this definition, (A) no act,
or failure to act, on the Participant’s part shall be deemed “willful” if done,
or omitted to be done, by the Participant in good faith and with reasonable
belief that the act, or failure to act, was in the best interest of the Company
and (B) in the event of a dispute concerning the application of this provision,
no claim by the Company that Cause exists shall be given effect unless the
Company establishes to the Board by clear and convincing evidence that Cause
exists.

 

“Code” means the Internal Revenue Code of 1986, as amended, or any successor
act.

 

“Committee” means the Administrative Committee appointed by the Board.

 

“Company” means Baker Hughes or an Affiliate that adopts the Plan pursuant to
the provisions of Section 15.

 

“Confidential Information” means any information, ideas, processes, methods,
designs, devices, inventions, data, techniques, models and other information
developed or used by the Company or any of its Affiliates and not generally
known in the relevant trade or industry relating to the Company's or any
Affiliate’s products, services, businesses, operations, employees, customers or
suppliers, whether in tangible or intangible form, which gives the Company or
any of its Affiliates a competitive advantage, including, without limitation,
(i) trade secrets; (ii) information relating to existing or contemplated
products, services, technology, designs, processes, formulae, research or
product developments; (iii) information relating to business plans or
strategies, sales or marketing methods, methods of doing business, prices of
sales or services, customer lists, customer usages and/or requirements, supplier
information (including the prices of supplies); and (iv) any other confidential
information which either the Company or any of its Affiliates may reasonably
have the right to protect by patent, copyright or by keeping it secret and
confidential. Confidential Information also includes any of the foregoing
information of third parties which the Company is obligated to maintain as
confidential. Confidential Information does not include (i) information that is
or becomes generally available to the public other than as a result of
disclosure by the Participant or by any individual or entity to which the
Participant delivered such information; (ii) information that becomes available
to the Participant from a source that is not bound by a confidentiality
agreement with the Company or an

 

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Affiliate; or (iii) information approved for release by written authorization of
the Company.

 

“Continuous Service” means a Participant’s service for the Company and
Affiliates commencing on his most recent date of hire by the Company or an
Affiliate and ending on the date of the complete severance of the Participant’s
employment relationship with the Company or an Affiliate without a
contemporaneous transfer to the employ of the Company or any Affiliate. For this
purpose, a Participant will not be treated as having a new date of hire if he is
directly transferred from the employ of the Company or an Affiliate to the
employ of an Affiliate or the Company.

 

“Employment Termination Date” means the date on which the employment
relationship between the Participant and the Company is terminated due to an
Involuntary Termination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
or any successor act.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor act.

 

“FICA” means the Federal Insurance Contributions Act, as amended, or any
successor act.

 

“Grandfathered Participant” means an individual who is not classified as
executive grade under the Company’s payroll system but who has been designated
by the Committee as being eligible to participate in the Plan. The Committee or
its delegate shall specify in a written communication to such Grandfathered
Participant whether the Grandfathered Participant is to be treated in the same
manner as a Participant who is in Salary Band EL or Salary Band III for purposes
of the Plan.

 

“Involuntary Termination” means the complete severance of a Participant’s
employment relationship with the Company (i) because the Participant’s position
is eliminated, (ii) because the Participant and the Company agree to the
Participant's resignation of his position at the request of the Company, (iii)
which occurs in conjunction with, and during the period that begins 90 days
before and ends 180 days after, an acquisition, merger, spin-off, reorganization
(either business or personnel), facility closing or a discontinuance of the
operations of the divisions in which the Participant is employed, (iv) because
the Company terminates the Participant’s employment for a reason other than for
Cause or (v) for any other reason which is deemed an Involuntary Termination by
the Plan Administrator. An Involuntary Termination does not include (i) a
termination for Cause, (ii) a transfer of employment from one Company to another
Company or a transfer of employment to a venture or entity in which the Company
or an Affiliate has any equity interest, (iii) a temporary absence, such as a
Family and Medical Leave Act leave or a temporary layoff in which a Participant
retains entitlement to re-employment, (iv) the Participant’s death, disability
or Retirement or (v) a voluntary termination by the Participant.

 

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“Participant” means an individual who is (i) employed in the services of the
Company, (ii) (a) classified as executive grade under the Company’s payroll
system categories or (b) classified by the Committee as being a Grandfathered
Participant, and (iii) eligible to participate in the Plan under Section 3.

 

“Plan” means the Baker Hughes Incorporated Executive Severance Plan, as amended
from time to time.

 

“Plan Administrator” means Baker Hughes, acting through its delegates. Such
delegates shall include the Administrative Committee, and any individual Plan
Administrator appointed by the Board with respect to the employee benefit plans
of Baker Hughes and its Affiliates, each of which shall have the duties and
responsibilities assigned to it from time to time by the Board. As used in the
Plan, the term “Plan Administrator” shall refer to the applicable delegate of
Baker Hughes as determined pursuant to the actions of the Board.

 

“Release Agreement” means the agreement which a Participant is required to
execute and deliver in order to receive the Benefits. The Vice President, Human
Resources of Baker Hughes or his designee may adopt more than one form of the
Release Agreement to comply with or take into account the laws of different
jurisdictions or to take into account individual circumstances.

 

“Retirement” means the Participant’s voluntary termination of his employment
after the Participant has attained at least 55 years of age and has at least ten
Years of Service.

 

“Section 409A” means section 409A of the Code and the Department of Treasury
rules and regulations issued thereunder.

 

“Separation From Service” has the meaning ascribed to that term in Section 409A.

 

“Specified Employee” means a person who is, as of the date of the person’s
Separation From Service, a “specified employee” within the meaning of Section
409A, taking into account the elections made and procedures established in
resolutions adopted by the Administrative Committee of Baker Hughes.

 

“Year of Service” means 365 days of Continuous Service.

 

2.2 Number and Gender. As used in the Plan, unless the context otherwise
expressly requires to the contrary, references to the singular include the
plural, and vice versa; references to the masculine include the feminine and
neuter; references to “including” mean “including (without limitation)”; and
references to Sections and clauses mean the sections and clauses of the Plan.

 

2.3 Headings. The headings of Sections herein are included solely for
convenience, and if there is any conflict between such headings and the text of
the Plan, the text shall control.

 

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3.ELIGIBILITY

 

To be eligible to receive Benefits under the Plan, an individual must (i) be
classified as (a) executive grade under the Company’s payroll system categories
on the Employment Termination Date or (b) a Grandfathered Participant on the
Employment Termination Date, (ii) incur an Involuntary Termination and
(iii) execute and deliver to the Plan Administrator a Release Agreement provided
to the Participant by the Plan Administrator by the deadline specified by the
Plan Administrator. An individual who is classified by the Company as an
independent contractor is not eligible to participate in the Plan (even if he is
subsequently reclassified by the Internal Revenue Service or a court as a common
law employee of the Company and the Company acquiesces to the reclassification).

 

4.BENEFITS

 

The Company shall provide a Participant who has satisfied the eligibility
requirements of Section 3 the Benefits described below. No Benefits will be
deemed to have accrued prior to a Participant’s Employment Termination Date, and
no rights to Benefits will be deemed to have vested until the occurrence of an
Involuntary Termination.

 

Further details of the Benefits described in this Section 4 are provided in
Exhibit A. Subject to the provisions of Section 13, the Plan Administrator may,
from time to time, modify the Benefits to reflect changes in the compensation
grade system or for changes in the Benefits approved by the Board.

 

The Committee or its delegate may, in its sole discretion, determine that a
Participant who incurs a demotion shall continue to be treated as if he or she
were in a specified Salary Band set forth in Exhibit A solely for purposes of
the Plan, regardless of such Participant’s actual Salary Band, but in no event
will such a Participant be eligible for a benefit greater than the level of
benefits that applied to him or her immediately prior to his or her demotion.
Any determination provided for in this paragraph shall be communicated to the
Participant in writing.

 

(a) Base Compensation. The Company will pay the Participant a cash severance
benefit based on the Participant’s Base Compensation at the Employment
Termination Date, with the amount of the Base Compensation benefit determined in
accordance with the relevant provisions of Exhibit A. The amount of the
Participant’s cash severance benefit will depend upon the Company’s
classification of the Participant for compensation purposes in the Company’s
salary grade system. Notwithstanding the measurement of Base Compensation on an
annual basis, a Participant’s Base Compensation for the month in which the
Participant’s Employment Termination Date occurs will be used in determining the
Base Compensation benefit. A Participant’s Base Compensation severance benefit
will be paid in a single sum cash payment in accordance with the provisions of
Section 6.

 

(b) Outplacement. Each Participant shall be entitled to outplacement assistance
at the expense of the Company determined in accordance with the relevant
provisions of Exhibit A and this Section 4(b). No cash will be paid in lieu of
outplacement fees and costs. All fees for outplacement assistance shall be paid
by the

 

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Company directly to the provider of the outplacement assistance services. The
in-kind outplacement assistance services that are provided pursuant to this
Section 4(c) shall not be provided beyond the last day of the Participant’s
second taxable year following the Participant’s taxable year in which the
Participant incurs a Separation From Service.

 

Notwithstanding the foregoing, the Company shall provide a Participant who is
employed primarily outside of the United States such Benefits as the Plan
Administrator determines taking into consideration any prohibitions or
restrictions and any statutorily mandated severance benefits applicable to the
Participant, with the intent of providing such Participant Benefits that are
generally comparable to the Benefits provided to Participants who are employed
primarily in the United States. It is the express intent of the Company that any
Benefits paid to such a Participant will be in lieu of any statutorily-mandated
severance benefits (or other employment termination related benefits),
including, but not limited to, gratuities and similar benefits.

 

5.OTHER BENEFIT PROGRAMS; PERQUISITES; COMPANY PROPERTY; EXPENSE ACCOUNT

 

5.1 Other Benefit Programs.

 

The Company will pay the Participant, or cause the Participant to be paid, any
other compensation and employee benefits to which he is entitled in accordance
with the terms of the applicable compensation and employee benefit arrangements.
Nothing in this Section 5.1 shall be construed to mean that a Participant is
entitled to any benefits under any particular compensation or employee benefit
arrangement.

 

5.2 Perquisites; Company Property; Expense Account.

 

(a) Perquisites. A Participant’s perquisites and perquisite allowance shall
terminate effective as of the Participant’s Employment Termination Date. To the
extent that the aggregate fair market value of the club memberships to be
purchased does not exceed the amount of the dollar limitation in effect under
section 402(g)(1) of the Code at the time of the Participant’s Separation From
Service, a Participant may, at his option, purchase any of his club memberships
held in the Company’s name at the fair market value and on the terms mutually
agreed by the Participant and the Plan Administrator. The Plan Administrator
will determine the fair market value of any such membership.

 

(b) Company Property. No later than the Participant’s Employment Termination
Date (unless the Plan Administrator agrees otherwise in writing), the
Participant shall return to the Company any company-owned property, including,
but not limited to, credit cards, documents, files, computers, cellular
telephones, personal digital assistants and any other company property of any
kind or nature, in Participant’s possession as of his Employment Termination
Date.

 

(c) Expense Account. Within 30 days after the Participant’s Employment
Termination Date and in accordance with the Company’s then current expense
reimbursement policy, the Participant will prepare and submit a final expense
account reimbursement request for expenses incurred prior to his Employment
Termination Date. The Company shall reimburse eligible expenses promptly but in
no event later than the

 

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last day of the Participant’s taxable year following the taxable year in which
the Participant incurred the expense. The Participant’s right to reimbursement
pursuant to this Section 5.2(c) shall not be subject to liquidation or exchange
for another benefit.

 

6.TIME OF BENEFITS PAYMENTS

 

If the Participant is not a Specified Employee and the Participant has timely
signed and delivered to the Plan Administrator the Release Agreement furnished
to the Participant by the deadline established by the Plan Administrator, the
Company shall pay the Participant the cash Benefits described in clause (a) of
Section 4 in a single sum cash payment on the date that is 90 days after the
date of the Participant’s Separation From Service. A Participant will not be
permitted to specify the year in which his payment will be made. If the
Participant is a Specified Employee and the Participant has timely signed and
delivered to the Plan Administrator the Release Agreement furnished to the
Participant by the deadline established by the Plan Administrator, the Company
shall pay the Participant the cash Benefits described in clause (a) of Section 4
in a single sum cash payment on the date that is six months after the date of
the Participant’s Separation From Service. Whether the Participant is or is not
a Specified Employee, the Participant will not be paid the cash Benefits
described in clause (a) of Section 4, and the Participant shall forfeit any
right to such payments, unless (i) the Participant has signed and delivered to
the Plan Administrator the Release Agreement furnished to the Participant and
(ii) the period for revoking such Release Agreement shall have expired (in the
case of both clause (i) and clause (ii)) prior to the earlier of the deadline
established by the Plan Administrator or the applicable payment date (the date
that is 90 days after the Participant’s Separation From Service if the
Participant is not a Specified Employee or the date that is six months after the
date of the Participant’s Separation From Service if the Participant is a
Specified Employee).

 

7.WITHHOLDING

 

The Company may withhold from any Benefits paid under the Plan all foreign,
federal, and state and local income taxes required to be withheld, and all FICA
and other employment taxes required to be withheld; provided that no taxes shall
be withheld before Benefits are otherwise scheduled to be paid under the Plan.

 

8.REDUCTION FOR OTHER SEVERANCE BENEFITS; NON-EXCLUSIVITY OF RIGHTS; STATUTORY
SEVERANCE

 

8.1 Reduction for Other Severance Benefits. The amount of the Benefits to which
a Participant is otherwise entitled under the Plan shall be reduced by the
amount, if any, of any other severance payments payable to the Participant by
the Company under any other plan, program or individual contractual arrangement;
provided, however, that there shall be no such reduction to the extent that such
reduction would result in an acceleration of payment of nonqualified deferred
compensation that is prohibited under Section 409A.

 

8.2 Non-Exclusivity of Rights. Nothing in the Plan shall prevent or limit the
Participant’s continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company for which the
Participant may qualify, nor shall anything herein limit or reduce such rights
as the Participant may have under any agreements with the

 

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Company or any of its subsidiaries, except as otherwise provided in Section 8.1.
Amounts which are vested benefits or which the Participant is otherwise entitled
to receive under any plan or program of the Company or any of its Affiliates
shall be payable in accordance with such plan or program.

 

8.3 Statutory Severance. If any benefits obligations are required to be paid to
a Participant in conjunction with severance of employment under the laws of the
country where the Participant is employed or under federal, state or local law,
the Benefits paid to the Participant will be deemed to be in satisfaction of any
statutorily required benefit obligations to the extent that doing so would not
result in an acceleration of payment of nonqualified deferred compensation that
is prohibited under Section 409A.

 

9.DEATH OF PARTICIPANT

 

If a Participant dies after his Employment Termination Date but before the
Participant receives full payment of the Benefits to which he is entitled, any
unpaid Benefits will be paid to the Participant’s surviving spouse, or if the
Participant does not have a surviving spouse, to the Participant’s estate. Such
payment shall be made within 30 days after the death of the Participant.

 

10.NON-SOLICITATION; CONFIDENTIAL INFORMATION

 

In consideration for the payment of the Benefits to the Participant, the
Participant shall not engage in any of the activities described in this Section
10.

 

10.1 Non-Solicitation. During the period commencing with the Participant’s
Employment Termination Date and ending on the first anniversary of such date,
the Participant shall not, directly or indirectly,

 

(a) interfere with the relationship of the Company or any Affiliate with, or
endeavor to entice away from the Company or any Affiliate, any individual or
entity who was or is a material customer or material supplier of, or maintained
a material business relationship with the Company or its Affiliates;

 

(b) establish (or take preliminary steps to establish) a business with, or cause
or attempt to cause others to establish (or take preliminary steps to establish)
a business with, any employee or agent of the Company or any of its Affiliates,
if such business is or will compete with the Company or any of its Affiliates;
or

 

(c) employ, engage as a consultant or adviser, or solicit the employment,
engagement as a consultant or adviser, of any employee or agent of the Company
or any of its Affiliates, or cause or attempt to cause any individual or entity
to do any of the foregoing.

 

10.2 Confidential Information. During the course of the Participant’s employment
with the Company, the Participant may have had access to or received
Confidential Information. Each Participant is obligated to keep confidential all
such Confidential Information, except that any Participant may disclose the
Confidential Information (i) in connection with enforcing his

 

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rights under the Plan or if compelled by law, and in either case, the
Participant shall provide written notice to the Company prior to the disclosure
or (ii) if the Company provides written consent prior to the disclosure.

 

11.UNFUNDED ARRANGEMENT

 

The Plan is only a general corporate commitment of the Company, and each
Participant must rely upon the general credit of the Company for the fulfillment
of its obligations hereunder. Under all circumstances, the rights of
Participants to any asset held by the Company will be no greater than the rights
expressed in the Plan. Nothing contained in the Plan shall constitute a
guarantee by the Company that the assets of the Company will be sufficient to
pay any Benefit under the Plan or would place the Participant in a secured
position ahead of general creditors of the Company. The Participants are only
unsecured creditors of the Company with respect to their Benefits, and the Plan
constitutes a mere promise by the Company to make Benefit payments in the
future. No specific assets of the Company have been or shall be set aside, or
shall in any way be transferred to a trust or shall be pledged in any way for
the performance of the Company's obligations under the Plan which would remove
such assets from being subject to the general creditors of the Company.

 

12.ADMINISTRATION OF THE PLAN

 

12.1 Plan Administrator. Baker Hughes shall be the “plan administrator” and the
“named fiduciary” for purposes of ERISA. The Plan shall be administered by the
Plan Administrator.

 

12.2 Records and Procedures. The Plan Administrator shall keep appropriate
records of its proceedings and the administration of the Plan and shall make
available for examination during business hours to any Participant, former
Participant or the beneficiary of any Participant or former Participant such
records as pertain to that individual’s interest in the Plan. If a Committee is
performing duties as the Plan Administrator, the Committee shall designate the
individual or individuals who shall be authorized to sign for the Plan
Administrator and, upon such designation, the signature of such individual or
individuals shall bind the Plan Administrator.

 

12.3 Self-Interest of Plan Administrator. Neither the members of a Committee nor
any individual Plan Administrator shall have any right to vote or decide upon
any matter relating solely to himself under the Plan or to vote in any case in
which his individual right to claim any benefit under the Plan is particularly
involved. In any case in which the any Committee member or individual Plan
Administrator is so disqualified to act, the other members of the Committee
shall decide the matter in which the Committee member or individual Plan
Administrator is disqualified.

 

12.4 Compensation and Bonding. Neither the members of a Committee nor any
individual Plan Administrator shall receive compensation with respect to their
services on the Committee or as Plan Administrator. To the extent required by
applicable law, or required by the Company, neither the members of a Committee
nor any individual Plan Administrator shall furnish bond or security for the
performance of their duties hereunder.

 

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12.5 Plan Administrator Powers and Duties. The Plan Administrator shall
supervise the administration and enforcement of the Plan according to the terms
and provisions hereof and shall have all powers necessary to accomplish these
purposes, including, but not by way of limitation, the right, power, and
authority:

 

(a) to make rules, regulations, and bylaws for the administration of the Plan
that are not inconsistent with the terms and provisions hereof, and to enforce
the terms of the Plan and the rules and regulations promulgated thereunder by
the Plan Administrator;

 

(b) to construe in its discretion all terms, provisions, conditions, and
limitations of the Plan;

 

(c) to correct any defect or to supply any omission or to reconcile any
inconsistency that may appear in the Plan in such manner and to such extent as
it shall deem in its discretion expedient to effectuate the purposes of the
Plan;

 

(d) to employ and compensate such accountants, attorneys, investment advisors,
and other agents, employees, and independent contractors as the Plan
Administrator may deem necessary or advisable for the proper and efficient
administration of the Plan;

 

(e) to determine in its discretion all questions relating to eligibility;

 

(f) to determine whether and when a Participant has incurred an Involuntary
Termination; and

 

(g) to make a determination in its discretion as to the right of any individual
to a Benefit under the Plan and to prescribe procedures to be followed by
Participants, former Participants or beneficiaries in obtaining Benefits
hereunder.

 

12.6 Reliance Upon Documents, Instruments, etc. The Plan Administrator may rely
upon any certificate, statement or other representation made by or on behalf of
the Company, any employee or any Participant, which the Plan Administrator in
good faith believes to be genuine, and on any certificate, statement, report or
other representation made to it by any agent or any attorney, accountant or
other expert retained by it or the Company in connection with the operation and
administration of the Plan.

 

13.AMENDMENT AND TERMINATION

 

The Board shall have the right to amend or terminate the Plan, in whole or in
part, for any reason; provided, however, no amendment or termination of the Plan
after a Participant’s Employment Termination Date shall affect the Benefits
payable to the Participant.

 

14.CLAIMS REVIEW PROCEDURES; CLAIMS APPEALS PROCEDURES

 

14.1 Claims Review Procedures. When a Benefit is due, the Participant (or the
person entitled to Benefits under Section 9) should submit a claim to the office
designated by the Plan Administrator to receive claims. Under normal
circumstances, the Plan Administrator will

 

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make a final decision as to a claim within 60 days after receipt of the claim.
If the Plan Administrator notifies the claimant in writing during the initial
60-day period, it may extend the period up to 120 days after the initial receipt
of the claim. The written notice must contain the circumstances necessitating
the extension and the anticipated date for the final decision. If a claim is
denied during the claims period, the Plan Administrator must notify the claimant
in writing, and the written notice must set forth in a manner calculated to be
understood by the claimant:

 

(a) the specific reason or reasons for the denial;

 

(b) specific reference to the Plan provisions on which the denial is based;

 

(c) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and

 

(d) an explanation of the Plan claims review procedures and time limits,
including a statement of the claimant’s right to bring a civil action under
section 502(a) of ERISA following an adverse benefit determination on review.

 

If a decision is not given to the Participant within the claims review period,
the claim is treated as if it were denied on the last day of the claims review
period.

 

14.2 Claims Appeals Procedures. For purposes of this section the Participant or
the person entitled to Benefits under Section 9 are referred to as the
“claimant”). If the claim of the claimant made pursuant to Section 14.1 is
denied and he wants a review, he must apply to the Plan Administrator in
writing. That application can include any arguments, written comments,
documents, records, and other information relating to the claim for benefits. In
addition, the claimant is entitled to receive on request and free of charge
reasonable access to and copies of all information relevant to the claim. For
this purpose, “relevant” means information that was relied on in making the
benefit determination or that was submitted, considered or generated in the
course of making the determination, without regard to whether it was relied on,
and information that demonstrates compliance with the Plan’s administrative
procedures and safeguards for assuring and verifying that Plan provisions are
applied consistently in making benefit determinations. The Plan Administrator
must take into account all comments, documents, records, and other information
submitted by the claimant relating to the claim, without regard to whether the
information was submitted or considered in the initial benefit determination.
The claimant may either represent himself or appoint a representative, either of
whom has the right to inspect all documents pertaining to the claim and its
denial. The Plan Administrator can schedule any meeting with the claimant or his
representative that it finds necessary or appropriate to complete its review.

 

The request for review must be filed within 90 days after the denial. If it is
not, the denial becomes final. If a timely request is made, the Plan
Administrator must make its decision, under normal circumstances, within 60 days
of the receipt of the request for review. However, if the Plan Administrator
notifies the claimant prior to the expiration of the initial review period, it
may extend the period of review up to 120 days following the initial receipt of
the request for a

 

-11-

 

review. All decisions of the Plan Administrator must be in writing and must
include the specific reasons for its action, the Plan provisions on which its
decision is based, and a statement that the claimant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the claimant’s claim for
benefits, and a statement of the claimant’s right to bring an action under
section 502(a) of ERISA If a decision is not given to the claimant within the
review period, the claim is treated as if it were denied on the last day of the
review period.

 

Within 60 days of receipt by a claimant of a notice denying a claim under the
preceding paragraph, the claimant or his or her duly authorized representative
may request in writing a full and fair review of the claim by the Plan
Administrator. The Plan Administrator may extend the 60-day period where the
nature of the benefit involved or other attendant circumstances make such
extension appropriate. In connection with such review, the claimant or his or
her duly authorized representative may review pertinent documents and may submit
issues and comments in writing. The Plan Administrator shall make a decision
promptly, and not later than 60 days after the Plan’s receipt of a request for
review, unless special circumstances (such as the need to hold a hearing)
require an extension of time for processing, in which case a decision shall be
rendered as soon as possible, but not later than 120 days after receipt of a
request for review. The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant, and specific references to the pertinent Plan
provisions on which the decision is based.

 

15.PARTICIPATION IN THE PLAN BY AFFILIATES

 

15.1 Adoption Procedure.

 

(a) Except to the extent that an Affiliate specifically determines otherwise by
appropriate action of its board of directors or noncorporate counterpart, as
evidenced by a written instrument executed by an authorized officer of such
entity (approved by the board of directors or noncorporate counterpart of the
Affiliate), each Affiliate shall participate in the Plan and shall be bound by
all the terms, conditions and limitations of the Plan. The Plan Administrator
and the Affiliate may agree to incorporate specific provisions relating to the
operation of the Plan that apply to the Affiliate.

 

(b) The provisions of the Plan may be modified so as to increase the obligations
of an adopting Affiliate only with the consent of such Affiliate, which consent
shall be conclusively presumed to have been given by such Affiliate unless the
Affiliate gives Baker Hughes written notice of its rejection of the amendment
within 30 days after the adoption of the amendment.

 

(c) The provisions of the Plan shall apply separately and equally to each
adopting Affiliate and its employees in the same manner as is expressly provided
for Baker Hughes and its employees, except that the power to appoint or
otherwise affect the Plan Administrator and the power to amend or terminate the
Plan shall be exercised by Baker Hughes. The Plan Administrator shall act as the
agent for each Affiliate that adopts the Plan for all purposes of administration
thereof.

 

-12-

 

(d) Any Affiliate may, by appropriate action of its board of directors or
noncorporate counterpart, terminate its participation in the Plan. Moreover, the
Plan Administrator may, in its discretion, terminate an Affiliate’s
participation in the Plan at any time.

 

(e) The Plan will terminate with respect to any Affiliate if the Affiliate
ceases to be an Affiliate or revokes its adoption of the Plan by resolution of
its board of directors or noncorporate counterpart evidenced by a written
instrument executed by an authorized officer of the Affiliate. If the Plan
terminates with respect to any Affiliate, the employees of that Affiliate will
no longer be eligible to be Participants in the Plan.

 

(f) The Plan as maintained by the Affiliates shall constitute a single plan
rather than a separate plan of each Affiliate.

 

15.2 No Joint Venture Implied. The document which evidences the adoption of the
Plan by an Affiliate shall become a part of the Plan. However, neither the
adoption of the Plan by an Affiliate nor any act performed by it in relation to
the Plan shall ever create a joint venture or partnership relation between it
and any other Affiliate.

 

16.DISPUTED PAYMENTS AND FAILURES TO PAY

 

If the Company fails to make a payment in whole or in part by of the payment
deadline specified in the Plan, either intentionally or unintentionally, other
than with the consent of the Participant, the Participant shall make prompt and
reasonable good faith efforts to collect the remaining portion of the payment.
The Company shall pay any such unpaid benefits due to the Participant, together
with interest on the unpaid benefits from the date of the payment deadline
specified in the Plan at the annual rate of 120 percent of the rate specified in
section 1274(b)(2)(8) of the Code within ten business days of discovering that
the additional monies are due and payable.

 

The Company shall hold harmless and indemnify the Participant on a fully
grossed-up after tax basis from and against (i) any and all taxes imposed under
Section 409A by any taxing authority as a result of the Company’s failure to
comply with this Section 16, and (ii) all expenses (including reasonable
attorneys’, accountants’, and experts’ fees and expenses) incurred by the
Participant due to a tax audit or litigation addressing the existence or amount
of a tax liability described in clause (i); and (iii) the amount of additional
taxes imposed upon the Participant due to the Company’s payment of the initial
taxes and expenses described in clauses (i) and (ii).

 

The Company shall make a payment to reimburse the Participant in an amount equal
to all federal, state and local taxes imposed upon the Participant that are
described in clauses (i) and (iii) of the foregoing paragraph of this Section 16
above, including the amount of additional taxes imposed upon the Participant due
to the Company’s payment of the initial taxes on such amounts, by the end of the
Participant’s taxable year next following the Participant’s taxable year in
which the Participant remits the related taxes to the taxing authority. The
Company shall make a payment to reimburse the Participant in an amount equal to
all expenses and other amounts incurred due to a tax audit or litigation
addressing the existence or amount of a tax

 

-13-

 

 

liability pursuant to clause (ii) of the foregoing paragraph of this Section 16
above, by the end of Participant’s taxable year following the Participant’s
taxable year in which the taxes that are the subject of the audit or litigation
are remitted to the taxing authority, or where as a result of such audit or
litigation no taxes are remitted, the end of the Participant’s taxable year
following the Participant’s taxable year in which the audit is completed or
there is a final and nonappealable settlement or other resolution of the
litigation.

 

17.MISCELLANEOUS

 

17.1 Plan Not an Employment Contract. The adoption and maintenance of the Plan
is not a contract between the Company and its employees that gives any employee
the right to be retained in its employment. Likewise, it is not intended to
interfere with the rights of the Company to terminate an employee’s employment
at any time with or without notice and with or without cause or to interfere
with an employee's right to terminate his employment at any time.

 

17.2 Alienation Prohibited. No Benefits hereunder shall be subject to
anticipation or assignment by a Participant, to attachment by, interference
with, or control of any creditor of a Participant, or to being taken or reached
by any legal or equitable process in satisfaction of any debt or liability of a
Participant prior to its actual receipt by the Participant. Any attempted
conveyance, transfer, assignment, mortgage, pledge, or encumbrance of the
Benefits hereunder prior to payment thereof shall be void.

 

17.3 Severability. Each provision of this Agreement may be severed. If any
provision is determined to be invalid or unenforceable, that determination shall
not affect the validity or enforceability of any other provision.

 

17.4 Binding Effect. This Agreement shall be binding upon any successor of the
Company.

 

17.5 Arbitration. Any controversy arising out of or relating to the Plan,
including without limitation, any and all disputes, claims (whether in tort,
contract, statutory or otherwise) or disagreements concerning the interpretation
or application of the provisions of the Plan, Company’s employment of
Participant and the termination of that employment, shall be resolved by
arbitration in accordance with the Employee Benefit Plan Claims Arbitration
Rules of the American Arbitration Association (the “AAA”) then in effect. No
arbitration proceeding relating to the Plan may be initiated by either the
Company or the Participant unless the claims review and appeals procedures
specified in Section 14 have been exhausted. Within ten business days of the
initiation of an arbitration hereunder, the Company and the Participant will
each separately designate an arbitrator, and within 20 business days of
selection, the appointed arbitrators will appoint a neutral arbitrator from the
AAA National Panel of Employee Benefit Plan Claims Arbitrators. The arbitrators
shall issue their written decision (including a statement of finding of facts)
within 30 days from the date of the close of the arbitration hearing. The
decision of the arbitrators selected hereunder will be final and binding on both
parties. This arbitration provision is expressly made pursuant to and shall be
governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16 (or replacement
or successor statute). Pursuant to Section 9 of the Federal Arbitration Act, the
Company and any Participant agrees that any judgment of the United States
District Court for the District in which the headquarters of Baker Hughes is
located at the time of

 

-14-

 

initiation of an arbitration hereunder shall be entered upon the award made
pursuant to the arbitration. Nothing in this Section 17.5 shall be construed to,
in any way, limit the scope and effect of Section 12. In any arbitration
proceeding full effect shall be given to the rights, powers, and authorities of
the Plan Administrator under Section 12.

 

17.6 Governing Law. All provisions of the Plan shall be construed in accordance
with the laws of Texas, except to the extent preempted by federal law and except
to the extent that the conflicts of laws provisions of the State of Texas would
require the application of the relevant law of another jurisdiction, in which
event the relevant law of the State of Texas will nonetheless apply, with venue
for litigation being in Houston, Texas.

 

-15-

 

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officer this 24th day of May, 2016.

 

  BAKER HUGHES INCORPORATED               By: /s/ Michele Gest      Title: Vice
President, Total Rewards  

 

 

 

-16-

 

BAKER HUGHES INCORPORATED
EXECUTIVE SEVERANCE PLAN

 

Exhibit A
Schedule of Benefits

 

  Severance Benefits Details of Benefit 1.

Base Compensation 

Ungraded (UG) 

Salary Band EL

Salary Band III

 

18 months of Base Compensation* 

12 months of Base Compensation* 

9 months of Base Compensation* 

*Using the Participant’s Base Compensation for the month in which the
Participant’s Employment Termination Date occurs. 

      2. Outplacement Subject to Section 4(b) of the Plan, outplacement services
will be provided for the greater of 12 months or until such time as the value of
the outplacement services reaches the maximum of $10,000.  The 12-month period
commences with the first day of the month following the month in which the
Participant’s Employment Termination Date occurs.

 

*Notwithstanding the foregoing, a person’s level of benefits shall not be less
than the level of benefits that applied to him or her immediately prior to the
reorganization of the Company on May 4, 2009, provided that immediately
following May 4, 2009, and at all times during his or her employment with the
Company following May 4, 2009, he or she is classified by the Company as at
least “Salary Band IV” in the Company’s payroll system (or a comparable
classification in any future payroll system).