Document:

exv10w5

 

Exhibit 10.5

October 26, 2004

Mr. Chad C. Deaton

13914 I.O. Court

Willis, Texas 77318

Dear Chad:

On October 25, 2004, Baker Hughes Incorporated (the “Company”) awarded you
80,000 restricted shares of the Common Stock of the Company, subject to the
restrictions, terms and conditions described in your Employment Agreement. A
certificate representing the 80,000 shares will be issued in your name and held
in the Company’s possession for safekeeping until they vest in accordance with
the restrictions, terms and conditions contained in the resolutions, at which
time the Company will deliver the shares to you.

Pending vesting of the restricted shares, you will earn dividends paid with
respect to the shares.

Sincerely yours,

/s/ H. John Riley, Jr.

H. John Riley, Jr.

Chairman, Compensation Committee

of the Board of Directors of

Baker Hughes Incorporatedexv10w6

 

Exhibit 10.6

SECOND AMENDED AND RESTATED

STOCK MATCHING AGREEMENT

     This Second Amended and Restated Stock Matching Agreement (this
“Agreement”) is made and entered into this 27th day of October, 2004, by and
between Baker Hughes Incorporated, a Delaware corporation (the “Company”), and
James Roderick Clark (the “Employee”), regarding the award of Matched Shares
(defined below) to the Employee pursuant to the Long Term Incentive Plan of
Baker Hughes Incorporated (the “Plan”), and further subject to the terms and
conditions set forth below.

W I T N E S S E T H:

     WHEREAS, the Company and the Employee previously entered into that certain
Stock Matching Agreement dated March 1, 2002, as amended on March 6, 2002,
which was Amended and Restated on December 3, 2003 (as amended and restated,
the “Original Agreement”);

     WHEREAS, the Company and the Employee recognize that there will no longer
be a “substantial risk of forfeiture” under this Agreement for federal income
tax purposes on and after March 7, 2006, when the Employee is eligible to
“retire” for purposes of this Agreement;

     WHEREAS, the Company and the Employee desire to make certain changes to
the Original Agreement in order to provide for Employee to sell Matched Shares
(as defined below) to pay tax liabilities in connection with income being
attributed to Employee under this Agreement and to allow Employee to sell
Common Stock of the Company previously obtained by Employee in the open market
in connection with the Original Agreement; and

     WHEREAS, the Company and the Employee desire to amend and restate the
Original Agreement in its entirety and, unless otherwise set forth herein, all
terms and provisions hereof are effective as of the date first written above;

     NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein, the parties hereto hereby agree to amend and
restate the Original Agreement and agree as follows:

         1. Award of Matched Shares. The Company hereby issues, subject to
all the terms and conditions in this Agreement, 25,000 restricted shares
(the “Restricted Stock”) of the Company’s common stock, $1.00 par value
per share (“Common Stock”), which represents one share for each share of
Common Stock up to, but not exceeding, 25,000 shares of Common Stock
owned, and held of record, (x) by the Employee and (y) for the benefit of
the Employee in an account by (i) a tax-qualified plan maintained by the
Company, a Subsidiary or a former employer of the Employee, and/or (ii)
an individual retirement account or annuity under Code Section 408 or
408A (with such shares under this clause (y) deemed to be owned by the
Employee for purposes of this Agreement) at the close of business on
September 2, 2002. Such shares of Restricted Stock shall be referred to
herein as the “Matched Shares.”

         2. Substantial Risk of Forfeiture. The Matched Shares that are
granted hereby shall be subject to a substantial risk of forfeiture
(“Forfeiture Restrictions”) until

 

 

the earlier to occur of (a) March 7, 2006, or (b) a “Transferability
Event” (as defined in Section 3). In the event of the occurrence of a
Forfeiture Event (as defined in Section 3) prior to the lapse of the
Forfeiture Restrictions, all the Matched Shares shall be forfeited to the
Company.

      
   3. Transfer Restrictions. Except as specified in Section 3(III),
the Matched Shares granted hereby may not be sold, assigned, pledged,
exchanged, hypothecated or otherwise transferred, encumbered or disposed
of prior to the occurrence of a Transferability Event. Any such attempted
sale, assignment, pledge, exchange, hypothecation, transfer, encumbrance
or disposition in violation of this Agreement shall be void and the
Company shall not be bound thereby. If a Forfeiture Event occurs before
the occurrence of a Transferability Event, the Matched Shares shall be
forfeited to the Company.

	(I)	 	Transferability Events. For purposes
of this Agreement, the following are Transferability
Events:

	(a)	 	The Retirement of the
Employee;
	 
	(b)	 	The termination of the
Employee’s employment by the Company without
Non-CIC Cause;
	 
	(c)	 	The occurrence of a
Change in Control;
	 
	(d)	 	The termination of the
Employee’s employment:

	(i)	 	by the Company without CIC Cause prior to a
Change in Control (whether or not a Change in
Control ever occurs) if 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)	 	by the Employee for Good Reason prior to a
Change in Control (whether or not a Change in
Control ever occurs) if the circumstance or event which constitutes Good
Reason occurs at the request or direction of the Person described in the
foregoing clause (i); or
	 
	(iii)	 	by the Company without CIC Cause or by the employee for Good Reason
if 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

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	(e)	 	The Employee’s death or
permanent disability (as determined by the
Committee in its sole discretion).

	(II)	 	Forfeiture Event: For purposes of
this Agreement, a Forfeiture Event means the termination
of employment of the Employee other than as set forth in
Section 3(I) or due to Non-CIC Cause.
	 
	(III)	 	Tax Trigger Event: Upon the lapse
of the Forfeiture Restrictions under Section 2 (a “Tax
Trigger Event”) with respect to the Matched Shares
granted to Employee (not including dividends paid on the
Matched Shares), the Employee shall be allowed to
satisfy the Company’s tax withholding obligations by
having the Company hold back a portion of the Matched
Shares with a fair market value equal to the minimum
statutory withholding obligations of the Company under
applicable laws at the time of the Tax Trigger Event for
the amount Employee is required to recognize as income
in connection with the Tax Trigger Event.

         4. Forfeiture of Matched Shares. Upon the forfeiture of Matched
Shares pursuant to Section 2 of Section 3 of this Agreement the Employee
shall forfeit, for all purposes of this Agreement and without
consideration, any and all rights and have no further claim against or
with respect to any such forfeited Matched Shares or against the Company
for any such forfeited Matched Shares.

         5. Stock Certificates. The Company will issue a stock certificate
for the Matched Shares in the name of the Employee; provided that the
Secretary of the Company will hold the stock certificate(s) representing
such shares and any additional shares issued as a result of a stock
dividend or stock split (as provided in Section 9) until the occurrence
of a Vesting Event or Forfeiture Event.

      
   6. Shareholder Status. The Employee will have (i) the right to
receive all cash dividends on the Matched Shares, subject to forfeiture
of such shares under Sections 2 and 3, and (ii) the right to vote such
 shares, subject to forfeiture of such shares under Sections 2 and 3. If
the Matched Shares are forfeited pursuant to Section 2 or 3, the Employee
will at the same time forfeit the Employee’s right to vote such shares
and to receive future cash dividends and any other distributions made
with respect to such shares. Any distributions made with respect to the
Matched Shares (other than cash dividends) shall be deemed to be a
portion of the Matched Shares and held by the Secretary of the Company
subject to the terms and conditions of this Agreement.

      
   7. Ownership by the Employee. The Employee shall have no obligations
to continue to own any minimum amount of Common Stock under this
Agreement. However, this will not relieve the Employee of any obligation
to own Common Stock under other agreements with the Company or the
policies of the Company applicable to its senior executives.

3

 

     
    8. Limitation of Award. The award of shares of Common Stock to the
Employee pursuant to this Agreement is being made only with respect to
the shares owned on September 2, 2002. No future award of shares is
being authorized pursuant hereto and may only be made by the Committee in
its sole discretion at such time in the future. No increase in shares
subsequent to September 2, 2002 shall create a right to an increase in
the number of Matched Shares.

     
    9. Adjustments. If the Company should declare a stock dividend or
authorize a split of shares of the Common Stock of the Company, the
Matched Shares shall reflect and to take into account such stock dividend
or stock split, as the case may be. The additional shares to be issued
as a result of such stock dividend or stock split shall be deemed to be a
portion of the Matched Shares and subject to the terms and conditions of
this Agreement.

     
    10. Relationship to the Plan; Definitions. This award of Matched
Shares is granted under the Plan and is subject to all of the terms,
conditions and provisions of the Plan and administrative interpretations
thereunder, if any, which have been adopted by the Committee thereunder
and are in effect on the date hereof. Capitalized terms that are not
defined in this Agreement shall have the same meanings ascribed to them
under the Plan. For purposes of this Agreement:

	(a)	 	“CIC Cause” means Cause
as defined in the Plan.
	 
	(b)	 	“Retirement” means the
termination of employment after attaining age 55
with not less than 5 years of continuous
employment since the Employment Date with the
Company; provided, however, that such termination
is not due to CIC Cause or Non-CIC Cause.
	 
	(c)	 	“Non-CIC Cause” means
fraud, theft, embezzlement committed against the
Company or an Affiliate or a customer of the
Company or an Affiliate, or conflict of interest,
unethical conduct, dishonesty affecting the
assets, properties or businesses of the Company or
any of its Affiliates, willful misconduct, or
continued material dereliction of duties.

     
    11. Withholding. To the extent the issuance of the Matched Shares
under this Agreement results in taxable income to the Employee, the
Company is authorized to withhold from any remuneration payable to the
Employee any tax required to be withheld by reason of such taxable
income.

      
   12. Entire Agreement. This Agreement is intended by the parties
hereto to be the final expression of their Agreement with respect to the
subject matter hereof and is the complete and exclusive statement thereof
notwithstanding any prior representation or statements to the contrary.
This Agreement hereby supercedes the Original Agreement.

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This Agreement may be modified only by written instrument signed by
each of the parties hereto.

      
   13. Headings and Sections. The headings contained in this Agreement
are for reference purposes only and do not affect in any way the meaning
or interpretation of this Agreement. All references to sections in this
Agreement shall be to sections of this Agreement unless otherwise
indicated.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

	 	 	 	 	 
	 	BAKER HUGHES INCORPORATED
	 	 	 	
	 	BY	 	/s/ Chad C. Deaton
	 	 	 	Chad C. Deaton 
	 	 	 	Chairman and Chief Executive Officer 

5

 

	 	 	 	 	 

Acknowledgment, Acceptance and Consent by the Employee

     The undersigned Employee, James Roderick Clark, hereby agrees to, and
accepts, the terms and provisions of the foregoing Second Amended and Restated
Stock Matching Agreement, subject to the terms and provisions of the Plan and
administrative interpretations thereof referred to above. The undersigned
further hereby acknowledges that he has received a copy of the Long Term
Incentive Plan of Baker Hughes Incorporated and that he has been advised by the
Company to consult with and rely upon only his own tax, legal and financial
advisors regarding the consequences and risks of this award.

	 	 	 
	

	 	

	Date

	 	James Roderick Clark
	

	 	10893 Lake Forest Drive
	

	 	Conroe, Texas 77384

Consent of Spouse of the Employee

     The undersigned spouse of the Employee has read and hereby approves the
terms and conditions of the foregoing Second Amended and Restated Stock
Matching Agreement and the Plan. In consideration of the Company’s awarding
the Employee the Matched Shares, as set forth in the Agreement, the undersigned
hereby agrees and consents to be irrevocably bound by the terms and conditions
of the Agreement and the Plan and further agrees that any community property
interest shall be similarly bound. The undersigned hereby appoints the
undersigned’s spouse as attorney-in-fact for the undersigned with respect to
any amendment or exercise of rights under the Agreement and the Plan.

	 	 	 
	 

	 	

	

	 	Spouse of the Employee

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