As filed with the Securities and Exchange Commission on January 14, 1997.
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BAKER HUGHES INCORPORATED
(Exact name of issuer as specified in its charter)
DELAWARE 76-0207995
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3900 Essex Lane
Houston, Texas 77027
(Address, including zip code of Principal Executive Offices)
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Baker Hughes Incorporated Supplemental Retirement Plan
(Full title of the plan)
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Lawrence O'Donnell, III
Baker Hughes Incorporated
3900 Essex Lane
Houston, Texas 77027
(Name and address of agent for service)
(713) 439-8600
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Securities Maximum Maximum Amount of
to be Offering Aggregate Registration
Registered Price Per Offering Fee
Obligation Price (1)
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Deferred Compensation 100% $30,000,000 $9,090.00
Obligations (2)
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(1) Estimated solely for the purpose of determining the registration fee.
(2) The Deferred Compensation Obligations are unsecured obligations of
Baker Hughes Incorporated to pay deferred compensation in the future
in accordance with the terms of the Baker Hughes Incorporated
Supplemental Retirement Plan for a select group of eligible
employees.
Part II
Item 3. Incorporation of Certain Documents by Reference.
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Baker Hughes Incorporated (the "Company") hereby incorporates
into this Registration Statement, by reference, the following
documents which have been filed with the Securities and Exchange
Commission (the "Commission"):
(i) The Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1996.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the effective date of
this Registration Statement and prior to the filing of a post-
effective amendment to this Registration Statement indicating that
all securities offered hereby have been sold or deregistering all
securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be part hereof from the
date of filing of such documents. Any statement contained herein
or in any document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a
statement contained in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part of
this Registration Statement, except as so modified or superseded.
Item 4. Description of Securities
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The securities to be registered are Deferred Compensation
Obligations under the Baker Hughes Incorporated Supplemental
Retirement Plan (the "Plan"). The Plan provides designated Company
employees ("Members") with an opportunity to defer a portion of
their compensation by electing an amount to be deferred ("Member
Deferral") and the timing and form of payment for the deferred
amount. Under the Plan and subject to vesting, the Company matches
a portion of the Member Deferral ("Company Deferral" and together
with the Member Deferral "Deferred Compensation Obligations"). The
Deferred Compensation Obligations are not convertible into another
security of the Company. A summary of certain provisions of the
Plan follows but is subject to the actual provisions of the Plan.
Capitalized terms used but not defined in this Item have the
respective meanings ascribed to them in the Plan.
The Deferred Compensation Obligations represent unsecured
obligations of the Company to pay deferred compensation (plus any
net income or net loss attributable thereto) in the future in
accordance with the terms of the Plan and any trust agreement
entered into pursuant to the Plan. If the Company becomes
insolvent, the Deferred Compensation Obligations (plus any net
income or net loss attributable thereto) shall be subject to the
claims of the creditors of the Company. In such event, Members and
their beneficiaries shall constitute unsecured general creditors of
the Company with respect to amounts otherwise payable thereunder
and shall have no preferred claim to, or beneficial ownership
interest in, Deferred Compensation Obligations or assets of any
Trust Fund (as defined).
Subject to the provisions of the Plan relating to insolvency
of the Company and to the terms of any subsequent election made by
a Member, the Deferred Compensation Obligations (plus any net
income or net loss attributable thereto) will be payable as soon as
administratively practicable as of the date irrevocably elected by
such Member pursuant to the Plan and which occurs after the
Valuation Date (as defined, generally the end of each calendar
month) coinciding with or next following the date the Member
terminates employment with the Company and its affiliates.
Benefits received upon such Member's termination of employment may
be paid in a single lump sum or in annual installments over 5, 10
or 15 years based generally upon the election made by the Member.
A Member may be permitted to withdraw a limited amount of
benefits from the Plan if the Plan Administrator, upon written
petition of a Member, determines in its sole discretion that such
member has suffered an Unforeseeable Financial Emergency (as
defined). In the event of such determination, the Member shall be
entitled to a benefit in an amount not to exceed the lesser of (1)
the amount determined by the Plan Administrator as necessary to
meet such Member's needs created by the Unforeseeable Financial
Emergency, or (2) the then value of such Member's Vested Interest
in the Member's Accounts (as defined).
Each Member has the right to designate a beneficiary or
beneficiaries to receive payment of the member's benefits under the
Plan in the event of the Member's death. The Member has the right
to revoke such designation or to substitute another beneficiary, or
other beneficiaries, in accordance with the Plan.
Under the Plan, Deferred Compensation Obligations may be
invested in one or more investment funds available under the Plan
that are designated by the Member, or by the Plan Administrator in
the event the Member fails to make a proper designation. Each
Member will have separate Accounts which will be valued separately.
As of each Valuation Date (as defined), the Plan Administrator will
allocate the net income (or net loss) of each Fund (as defined) to
all of the Accounts of Members investing in such Funds. The net
income (or net loss) on a Valuation Date shall be ascertained by
the Plan Administrator in such manner as it deems appropriate,
which may include expenses of administering the Fund, the Plan and
any Trust (as defined).
Except as otherwise provided by law, the interest of a Member
or beneficiary under the Plan may not be sold, transferred,
assigned, or encumbered in any manner, either voluntarily or
involuntarily, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be
null and void; neither shall the benefits under the Plan be subject
to the debts, contracts, liabilities, engagements or torts of any
person to whom such benefits or funds are payable, nor shall they
be an asset in bankruptcy or subject to garnishment, attachment or
other legal or equitable proceedings.
The Company's Board of Directors has the right to amend, in
whole or in part, any or all of the provisions of the Plan;
provided, however, that no amendment may be made that would impair
the rights of a Member with respect to amounts already allocated to
such Member's Accounts. The Board of Directors may terminate the
Plan at any time. If Plan is terminated, the balance in a Member's
Accounts shall be paid to such Member or his or her designated
beneficiary in the manner specified by the Plan Administrator,
which may include the payment of a single lump sum, cash payment in
full satisfaction of all such Member's or beneficiary's benefits
under the Plan.
Item 5. Interests of Named Experts and Counsel.
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Certain legal matters with respect to the Securities offered
hereby will be passed upon for the Company by Lawrence O'Donnell,
III, Vice President and General Counsel for the Company, Houston,
Texas. Mr. O'Donnell is eligible to participate in the Baker
Hughes Incorporated Supplemental Retirement Plan.
Item 6. Indemnification of Directors and Officers
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The Company's Restated Certificate of Incorporation contains
a provision that eliminates the personal liability of a director to
the Company and its stockholders for monetary damages for breach of
his fiduciary duty as a director to the extent currently allowed
under the Delaware General Corporation Law. If a director were to
breach such duty in performing his duties as a director, neither
the Company nor its stockholders could recover monetary damages
from the director, and the only course of action available to the
Company's stockholders would be equitable remedies, such as an
action to enjoin or rescind a transaction involving a breach of
fiduciary duty. To the extent certain claims against directors are
limited to equitable remedies, the provision in the Company's
Restated Certificate of Incorporation may reduce the likelihood of
derivative litigation and may discourage stockholders or management
from initiating litigation against directors for breach of their
fiduciary duty. Additionally, equitable remedies may not be
effective in many situations. If a stockholder's only remedy is to
enjoin the completion of the Board of Directors' action, this
remedy would be ineffective if the stockholder does not become
aware of a transaction or event until after it has been completed.
In such a situation, it is possible that the stockholders and the
Company would have no effective remedy against the directors.
Under the Company's Restated Certificate of Incorporation,
liability for monetary damages remains for (i) any breach of the
duty of loyalty to the Company or its stockholders, (ii) acts or
omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) payment of an improper
dividend or improper repurchase of the Company's stock under
Section 174 of the Delaware General Corporation Law, or (iv) any
transaction from which the director derived an improper personal
benefit. The Company's Restated Certificate of Incorporation
further provides that in the event the Delaware General Corporation
Law is amended to allow the further elimination or limitation of
the liability of directors, then the liability of the Company's
directors shall be limited or eliminated to the fullest extent
permitted by the amended Delaware General Corporation Law.
Under Article III of the Company's Bylaws as currently in
effect and an indemnification agreement with the Company's officers
and directors (the "Indemnification Agreement"), each person who is
or was a director or officer of the Company or a subsidiary of the
Company, or who serves or served any other enterprise or
organization at the request of the Company or a subsidiary of the
Company, shall be indemnified by the Company to the full extent
permitted by the Delaware General Corporation Law.
Under such law, to the extent that such person is successful
on the merits in defense of a suit or proceeding brought against
him by reason of the fact that he is or was a director or officer
of the Company, or serves or served any other enterprise or
organization at the request of the Company, he shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred in connection with such action.
Under such law, if unsuccessful in defense of a third-party
civil suit or a criminal suit, or if such suit is settled, such a
person shall be indemnified against both (i) expenses, including
attorneys' fees, and (ii) judgments, fines and amounts paid in
settlement if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Company, and, with respect to any criminal action, had no
reasonable cause to believe his conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the
right of the Company, where such suit is settled, such a person
shall be indemnified under such law only against expenses
(including attorneys' fees) actually and reasonably incurred in the
defense or settlement of such suit if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the
best interests of the Company, except that if such person is
adjudged to be liable in such a suit for negligence or misconduct
in the performance of his duty to the Company, he cannot be made
whole even for expenses unless the court determines that he is
fairly and reasonably entitled to indemnity for such expenses.
The Indemnification Agreement provides directors and officers
with specific contractual assurance that indemnification and
advancement of expenses will be available to them regardless of any
amendments to or revocation of the indemnification provisions of
the Company's Bylaws. The Indemnification Agreement provides for
indemnification of directors and officers against both stockholder
derivative claims and third-party claims. Sections 145(a) and
145(b) of the Delaware General Corporation Law, which grant
corporations the power to indemnify directors and officers,
specifically authorize lesser indemnification in connection with
derivative claims than in connection with third-party claims. The
distinction is that Section 145(a), concerning third-party claims,
authorizes expenses and judgments and amounts paid in settlement
(as is provided in the Indemnification Agreement), but Section
145(b), concerning derivative suits, generally authorizes only
indemnification of expenses. However, Section 145(f) expressly
provides that the indemnification and advancement of expenses
provided by or granted pursuant to the subsections of Section 145
shall not be exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
any agreement. It is unclear whether a court would decide that
Delaware's public policy would support this aspect of the
Indemnification Agreement under the authority of Section 145(f), or
whether Delaware's public policy would cause its invalidation
because it does not conform to the distinctions contained in
Sections 145(a) and 145(b).
Pursuant to the Indemnification Agreement, the Company has
agreed to provide, at all times during the two-year period
following a "change in control" (as defined in the Indemnification
Agreement) of the Company, irrevocable letters of credit in an
aggregate amount not less than $25,000,000 for the benefit of the
officers and directors of the Company to secure the Company's
obligations under the Indemnification Agreement.
Delaware corporations also are authorized to obtain insurance
to protect officers and directors from certain liabilities,
including liabilities against which the corporation cannot
indemnify its directors and officers. The Company currently has in
effect a directors' and officers' liability insurance policy
providing aggregate coverage in the amount of $100,000,000.
Item 7. Exemption from Registration Claimed
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Not applicable.
Item 8. Exhibits
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4.1 Baker Hughes Incorporated Supplemental Retirement Plan.
5.1 Opinion of Lawrence O'Donnell, III with respect to legality of
securities.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Lawrence O'Donnell, III (contained in Exhibit 5.1).
24.1 Powers of Attorney are included on the signature page of this
Registration Statement.
Item 9. Undertakings
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(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by section 10(a)
(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant
to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated
by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Lawrence O'Donnell, III and James
D. Woods, and each of them, each of whom may act without joinder of the
other, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all pre- and post-
effective amendments to this Registration Statement, and to file the
same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and each of them,
or the substitute or substitutes of any or all of them, may lawfully do
or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Houston, State of
Texas, on January 13, 1997.
Baker Hughes Incorporated
By: /s/ James D. Woods
-------------------------------------
James D. Woods
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
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/s/ James D. Woods Chairman of the Board January 13, 1997
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(James D. Woods)
President and Chief
Executive Officer
/s/ Max L. Lukens (principal executive officer) January 13, 1997
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(Max L. Lukens)
Senior Vice President and Chief
Financial Officer (principal
/s/ E. L. Mattson financial officer) January 13, 1997
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(E. L. Mattson)
Controller (principal
/s/ James E. Braun accounting officer) January 13, 1997
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(James E. Braun)
Signature Title Date
--------- ----- ----
/s/ Lester M. Alberthal, Jr. Director January 13, 1997
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Lester M. Alberthal, Jr.
/s/ Victor G. Beghini Director January 13, 1997
- -----------------------------
Victor G. Beghini
/s/ Jack S. Blanton Director January 13, 1997
- ----------------------------
Jack S. Blanton
/s/ Harry M. Conger Director January 13, 1997
- ----------------------------
Harry M. Conger
/s/ Eunice M. Filter Director January 13, 1997
- ----------------------------
Eunice M. Filter
/s/ Joe B. Foster Director January 13, 1997
- ----------------------------
Joe B. Foster
/s/ Richard D. Kinder Director January 13, 1997
- ----------------------------
Richard D. Kinder
/s/ John F. Maher Director January 13, 1997
- ----------------------------
John F. Maher
/s/ James F. McCall Director January 13, 1997
- ----------------------------
James F. McCall
/s/ Dana G. Mead Director January 13, 1997
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Dana G. Mead
/s/ Donald C. Trauscht Director January 13, 1997
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Donald C. Trauscht
Exhibit 4.1
BAKER HUGHES INCORPORATED
SUPPLEMENTAL RETIREMENT PLAN
(Amended and Restated through December 4, 1996)
TABLE OF CONTENTS
ARTICLE PAGE
I - Definitions and Construction I-1
II - Participation II-1
III - Account Credits and Allocations of Income or Loss III-1
IV - Deemed Investment of Funds IV-1
V - Determination of Vested Interest and Forfeitures V-1
VI - In-Service Distributions VI-1
VII - Termination Benefits VII-1
VIII - Administration of the Plan VIII-1
IX - Administration of Funds IX-1
X - Nature of the Plan X-1
XI - Adopting Entities XI-1
XII - Miscellaneous XII-1
I
Definitions and Construction
----------------------------
1.1 Definitions. The capitalized words or terms used in
the Plan and which are not otherwise defined herein shall have
the same meanings as such words or terms have in the Baker
Hughes Incorporated Thrift Plan, as the same may be amended
from time to time. Where the following words and phrases
appear in the Plan,they shall have the respective meanings set
forth below, unless their context clearly indicates to the
contrary.
(1) Account(s): A Member's Base Contribution Account and/or
General Account, including the amounts credited thereto.
(2) Affiliate: Each trade or business (whether or not
incorporated) which together with the Company would be
deemed to be a "single employer" within the meaning of
subsections (b), (c), (m) or (o) of section 414 of the
Code.
(3) Base Contribution Account: An individual account for each
Member to which is credited the Company Deferrals made on
his behalf pursuant to Section 3.2(b) and (c) and pursuant
to Section 3.2(d) attributable to "Employer Base
Contributions" and "Employer Supplemental Base
Contributions" under the Thrift Plan and which is credited
(or debited) for such account's allocation of net income
(or net loss) as provided in Section 3.3.
(4) Code: The Internal Revenue Code of 1986, as amended.
(5) Company: Baker Hughes Incorporated and any other adopting
entity which adopts the Plan pursuant to the provisions of
Article XI.
(6) Company Deferrals: Deferrals made by the Company on a
Member's behalf pursuant to Section 3.2.
(7) Directors: The Board of Directors of Baker Hughes Incorporated.
(8) Effective Date: January 1, 1995, as to this restatement of the Plan.
(9) Eligible Employee: Any individual who is employed by the Company
in a position with an executive salary grade.
(10) Entry Date: The first day of each Plan Year.
(11) Excess Compensation: A Member's Excess Compensation for each
calendar month in a Plan Year shall be equal to one-twelfth of
the amount by which his (A) "Compensation" for such year as
defined under the Thrift Plan, but including amounts the Member
could have received in cash in lieu of Member Deferrals pursuant
to Section 3.1, and without regard to the maximum dollar
limitation of section 401(a)(17) of the Code, exceeds (B) his
"Compensation" as defined under the Thrift Plan for such year.
(12) Funds: The investment funds designated from time to time
for the deemed investment of Accounts pursuant to Article IV.
(13) General Account: An individual account for each Member to
which is credited his Member Deferrals pursuant to Section
3.1 and his Company Deferrals made on his behalf pursuant to
Section 3.2(a) and pursuant to Section 3.2(d) attributable
to "Employer Matching Contributions" under the Thrift Plan
and which is credited (or debited) for such account's
allocation of net income (or net loss) as provided in
Section 3.3. As of the Effective Date, a Member's General
Account shall also be credited with the amount, if any,
credited to his "Account" on December 31, 1994 under the
Plan as in effect immediately prior to this restatement.
(14) Member: Each Eligible Employee who has met the eligibility
requirements for participation in the Plan and who has
become a Member pursuant to Article II.
(15) Member Deferrals: Deferrals made by a Member pursuant to
Section 3.1.
(16) Pay: The total of all amounts paid by the Company to or for
the benefit of a Member for services rendered or labor
performed, which are required to be reported on such
Member's federal income tax withholding statement(s) (Form
W-2 or its subsequent equivalent), plus any amounts such
Member could have received in cash in lieu of Member
Deferrals pursuant to Section 3.1.
(17) Plan: The Baker Hughes Incorporated Supplemental Retirement
Plan, as amended from time to time.
(18) Plan Administrator: Baker Hughes Incorporated, acting
through its delegate.
(19) Plan Year: The twelve-consecutive month period commencing
January 1 of each year.
(20) Retirement Date. A Member's "Retirement Date" as defined
under the Thrift Plan.
(21) Thrift Plan: The Baker Hughes Incorporated Thrift Plan, as
amended from time to time.
(22) Trust: The trust, if any, established under the Trust Agreement.
(23) Trust Agreement: The agreement, if any, entered into between
the Company and the Trustee pursuant to Article X.
(24) Trust Fund: The funds and properties, if any, held pursuant
to the provisions of the Trust Agreement, together with all
income, profits and increments thereto.
(25) Trustee: The trustee or trustees appointed by the Directors
who are qualified and acting under the Trust Agreement at
any time.
(26) Unforeseeable Financial Emergency: An unexpected need of a
Member for cash that (i) arises from an illness, casualty
loss, sudden financial reversal, or such other unforeseeable
occurrence that is caused by an event beyond the control of
such Member, (ii) would result in severe financial hardship
to such Member if his compensation deferral election was not
cancelled pursuant to Section 3.1(h) and/or if a withdrawal
or benefit payment pursuant to Article VI or Section 7.6 was
not permitted, and (iii) is not reasonably satisfiable from
other resources of such Member. Cash needs arising from
foreseeable events, such as the purchase of a house or
education expenses for children, shall not be considered to
be the result of an Unforeseeable Financial Emergency.
(27) Valuation Dates: The last business day of each calendar month
and any other interim Valuation Date determined by the
Plan Administrator on a nondiscriminatory basis.
(28) Vested Interest: The portion of a Member's Accounts which,
pursuant to the Plan, is nonforfeitable.
1.2 Number and Gender. Wherever appropriate herein, words
used in the singular shall be considered to include the plural and words
used in the plural shall be considered to include the singular. The
masculine gender, where appearing in the Plan, shall be deemed to include
the feminine gender.
1.3 Headings. The headings of Articles and 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.
II.
Participation
-------------
2.1 Eligibility.
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(a) Any Eligible Employee who is a "Member" of the Thrift Plan
with respect to a "Plan Year" under the Thrift Plan shall be eligible to
become a Member of the Plan for such Plan Year by electing to make Member
Deferrals pursuant to Section 3.1(a)(1) and/or 3.1 (a)(2).
(b) Any Eligible Employee shall be eligible to become a Member of
the Plan for any Plan Year by electing to make Member Deferrals pursuant
to Section 3.1(b).
(c) Any Eligible Employee who is a "Member" of the Thrift Plan
with respect to a "Plan Year" under the Thrift Plan shall become a Member
of the Plan for such Plan Year with respect to (A) Member Deferrals
pursuant to Section 3.1(a)(3) and/or (B) Company Deferrals pursuant to
Section 3.2(b), 3.2(c), and/or 3.2(d)(2).
2.2 Participation.
--------------
(a) Prior to each Entry Date, the Plan Administrator shall
notify those Eligible Employees who are determined by the Plan Administrator
to be eligible to initially become Members pursuant to Section 2.1(a)
and/or 2.1(b) as of such Entry Date. Any such Eligible Employee may
become a Member for the Plan Year beginning on such Entry Date by
effecting, prior to such Entry Date and within the time period prescribed
by the Plan Administrator, the Member Deferral election prescribed by the
Plan Administrator. Notwithstanding the foregoing, any Member Deferral
election respecting Section 3.1(b)(2) for a Plan Year subsequent to the
1995 Plan Year must be made prior to the October 1 immediately preceding
such Plan Year by effecting, prior to such October 1 and within the time
period prescribed by the Plan Administrator, the Member Deferral election
prescribed by the Plan Administrator. Notwithstanding any provision herein
to the contrary, an Eligible Employee who first becomes an Eligible
Employee on other than the first day of a Plan Year may become a Member
on the date he first becomes an Eligible Employee for the remainder of
such Plan Year with respect to Member Deferrals pursuant to
Section 3.1(a)(1) and/or 3.1(a)(2) and/or 3.1(b)(1) by effecting, prior
to or within 30 days after the date he first becomes an Eligible Employee
and within the time period prescribed by the Plan Administrator, the
Member Deferral election prescribed by the Plan Administrator.
(b) Any Eligible Employee who is eligible to become a Member
for a Plan Year pursuant to Section 2.1(c) shall automatically become
a Member for such Plan Year.
(c) Notwithstanding any provision herein to the contrary, an
Eligible Employee who has become a Member of the Plan shall cease to be
entitled to make Member Deferrals hereunder or receive Company Deferrals
hereunder effective as of any date designated by the Plan Administrator.
Any such Plan Administrator action shall be communicated to the affected
individual prior to the effective date of such action. Any such
Eligible Employee may again become entitled to make Member Deferrals
hereunder and receive Company Deferrals hereunder for any subsequent
Plan Year selected by the Plan Administrator in its sole discretion.
III.
Account Credits and Allocations of Income or Loss
-------------------------------------------------
3.1 Member Deferrals.
-----------------
(a) A Member meeting the eligibility requirements of
Section 2.1(a):
(1) May elect to defer an integral percentage of
from 2% to 15% of his Excess Compensation for a Plan Year;
and/or
(2) May elect to defer a portion of his Pay for a
Plan Year equal to the reduction in his "Cash or Deferred
Contributions" under the Thrift Plan for such "Plan Year" as
a result of (A) the limitations contained in sections 402(g)
of the Code and/or (B) the exclusion of Member Deferrals
under the Plan from the definition of "Compensation" under
the Thrift Plan; and/or
(3) Shall be deemed to have elected to defer a
portion of his Pay for a Plan Year (which such deferral
election may not, contrary Plan provisions notwithstanding,
be changed, revoked or canceled, except in the case of an
unpaid leave of absence from the Company) equal to (A) the
reduction in his "Cash or Deferred Contributions" under the
Thrift Plan for such "Plan Year" as a result of the
limitations contained in sections 401(k)(3) and/or 415 of
the Code and/or (B) the reduction in his "Voluntary
Contributions" under the Thrift Plan for such "Plan Year" as
a result of the limitations contained in sections 401(m)(2)
and/or 415 of the Code.
Notwithstanding the foregoing, any such Member Deferrals pursuant to
Section 3.1(a)(2) and/or 3.1(a)(3) shall be determined based upon the
Member's elections with respect to Cash or Deferred Contributions
and/or Voluntary Contributions under the Thrift Plan in effect on the
first day of such Plan Year (or on the first day such Member is a
"Member" of the Thrift Plan during such Plan Year, if later). Moreover,
Member Deferrals pursuant to Section 3.1(a)(2)(B) are contingent upon
such Member electing the maximum "Cash or Deferred Contributions"
under the Thrift Plan pursuant to Section 402(g) of the Code or as
permitted under the terms of the Thrift Plan. With respect to an Eligible
Employee who first becomes a Member on other than an Entry Date, any such
Member Deferrals pursuant to this Section 3.1(a) shall apply only for the
portion of such Plan Year commencing with the date he first becomes a
Member and ending on the last day of such Plan Year.
(b) A Member meeting the eligibility requirements of Section 2.1(b)
may:
(1) Elect to defer from his Pay an integral percentage of
from 1% to 50% of his salary for a Plan Year; and/or
(2) Elect to defer from his Pay an integral percentage of
from 1% to 100% of his bonus (as specified below) for a Plan Year.
Notwithstanding the foregoing, with respect to an Eligible Employee who
first becomes a Member on other than an Entry Date, any such Member
Deferrals pursuant to Section 3.1(b)(1) shall apply only for the portion
of such Plan Year commencing with the date he first becomes a Member and
ending on the last day of such Plan Year. Further, any such initial
Member Deferral election pursuant to Section 3.1(b)(2) for the 1995 Plan
Year shall apply to 75% of such Member's bonus for the fiscal year of the
Company ending September 30, 1995, and any such subsequent Member Deferral
election pursuant to Section 3.1(b)(2) shall apply to 100% of such
Member's bonus for the fiscal year of the Company ending within such
subsequent Plan Year.
(c) Pay for a Plan Year not so deferred by such election pursuant
to this Section shall be received by such Member in cash. A Member's
election to defer an amount of his Pay pursuant to this Section shall be
made by effecting, in the form prescribed by the Plan Administrator, a
Member Deferral election pursuant to which the Member authorizes the
Company to reduce his Pay in the elected amount and the Company, in
consideration thereof, agrees to credit an equal amount to such Member's
General Account maintained under the Plan. The reduction in a Member's
Pay pursuant to his Member Deferral election shall be effected by
calendar month Pay reductions as determined by the Plan Administrator
following the effective date of such election. Such Pay reductions shall
be within the Plan Year to which the Member Deferral election relates,
except that Pay reductions attributable to elections pursuant to Section
3.1(b)(2) may be made within the next following Plan Year if the bonus to
which the Member Deferral election relates is paid in such next following
Plan Year. Member Deferrals made by a Member shall be credited to such
Member's General Account as of a date determined in accordance with
procedures established from time to time by the Plan Administrator;
provided, however, that such Member Deferrals shall be credited to the
Member's General Account no later than 30 days after the date upon which
the Pay deferred would have been received by such Member in cash if he
had not elected to defer such amount pursuant to this Section 3.1.
(d) A Member Deferral election pursuant to Section
3.1(a) and/or 3.1(b)(1) shall become effective as of the Entry
Date (or later initial eligibility date, if applicable) which is
on or after the date the election is effected by the Member. A
Member Deferral election pursuant to Section 3.1(b)(2) shall
become effective as of January 1, 1995, with respect to the 1995
Plan Year, and as of the October 1 immediately preceding any
subsequent Plan Year, with respect to such subsequent Plan Year,
provided such date is on or after the date the election is
effected by the Member. A Member Deferral election shall remain
in force and effect for the entire (or partial, if applicable)
Plan Year to which such election relates. A Member Deferral
election pursuant to Section 3.1(a) and/or 3.1(b)(1) shall remain
in force and effect for each subsequent Plan Year (following the
Member's initial year of participation in the Plan) for which he
satisfies the eligibility requirements set forth in Section 2.1,
unless and until such election is changed or revoked by such
Member prior to the Entry Date of the subsequent Plan Year to
which such change or revocation relates. A Member Deferral
election pursuant to Section 3.1(b)(2) shall remain in force and
effect for each subsequent Plan Year (following the Member's
initial Section 3.1(b)(2) election) for which he satisfies the
eligibility requirements set forth in Section 2.1, unless and
until such election is changed or revoked by such Member prior to
the October 1 immediately preceding the subsequent Plan Year to
which such change or revocation relates. Plan provisions to the
contrary notwithstanding, a Member Deferral election pursuant to
Section 3.1(a) and/or Section 3.1(b) shall be suspended during
any period of unpaid leave of absence from the Company.
(e) A Member Deferral election shall indicate the
applicable time and form of payment, as provided in Sections 7.2
and 7.3, for the Pay deferred thereunder for such Plan Year and
the net income (or net loss) allocated with respect thereto.
Such time and form of payment election for such Plan Year shall
also apply to any Company Deferrals for such Plan Year and the
net income (or net loss) allocated with respect thereto. Each
Member's Accounts shall be divided into subaccounts to reflect
such Member's various elections respecting time and form of
payment. Notwithstanding the foregoing, with respect to the
portion of a Member's General Account attributable to the amount,
if any, credited to his "Account" on December 31, 1994 under the
Plan as in effect immediately prior to this restatement, such
portion and the net income (or net loss) allocated with respect
thereto shall be allocated to a subaccount which shall be payable
at the time and in the form provided under the Plan as in effect
immediately prior to this restatement.
(f) A Member who has made a Member Deferral election
pursuant to Section 3.1(a) and/or 3.1(b)(1) may change his
election, as of the Entry Date of any subsequent Plan Year, by
effecting a new Member Deferral election prior to such Entry Date
and within the time period prescribed by the Plan Administrator.
A Member who has made a Member Deferral election pursuant to
Section 3.1(b)(2) may change his election, as of the October 1
immediately preceding any subsequent Plan Year, by effecting a
new Member Deferral election prior to such October 1 and within
the time period prescribed by the Plan Administrator.
(g) A Member who has made a Member Deferral election
pursuant to Section 3.1(a) and/or 3.1(b)(1) may cancel his
election, as of the Entry Date of any subsequent Plan Year, by
effecting the same in the form prescribed by the Plan
Administrator prior to such Entry Date and within the time period
prescribed by the Plan Administrator. A Member who so cancels
his Member Deferral election may again make a new such Member
Deferral election for a subsequent Plan Year, if he satisfies the
eligibility requirements set forth in Section 2.1, by effecting a
new such Member Deferral election prior to the Entry Date of such
Plan Year and within the time period prescribed by the Plan
Administrator. A Member who has made a Member Deferral election
pursuant to Section 3.1(b)(2) may cancel his election, as of the
October 1 immediately preceding any subsequent Plan Year, by
effecting the same in the form prescribed by the Plan
Administrator prior to such October 1 and within the time period
prescribed by the Plan Administrator. A Member who so cancels
his Member Deferral election may again make a new such Member
Deferral election for a subsequent Plan Year, if he satisfies the
eligibility requirements set forth in Section 2.1, by effecting a
new such Member Deferral election prior to the October 1
immediately preceding such Plan Year and within the time period
prescribed by the Plan Administrator.
(h) In the event that the Plan Administrator, upon
written petition of a Member, determines in its sole discretion
that such Member has suffered an Unforeseeable Financial
Emergency, the Member Deferral election of such Member then in
effect, if any, shall be terminated as soon as administratively
practicable after such determination. A Member whose Member
Deferral election has been so terminated may again make a new
Member Deferral election for a subsequent Plan Year that is at
least twelve months after the effective date of such termination,
if he satisfies the eligibility requirements set forth in Section
2.1, by effecting a new Member Deferral election for such Plan
Year and within the time period prescribed by the Plan
Administrator.
3.2 Company Deferrals.
------------------
(a) For each calendar month, the Company shall defer
on a Member's behalf an amount which equals the sum of (1) 100%
of the Member Deferrals made pursuant to Section 3.1(a)(1) by
such Member during such month not in excess of 2% of such
Member's Excess Compensation for the payroll periods in such
month with respect to which Member Deferrals pursuant to Section
3.1(a)(1) were made, plus (2) 50% of the Member Deferrals made
pursuant to Section 3.1(a)(1) by such Member during such month in
excess of 2%, but not in excess of 6%, of such Member's Excess
Compensation for the payroll periods in such month with respect
to which Member Deferrals pursuant to Section 3.1(a)(1) were
made.
(b) For each calendar month, the Company shall defer
an amount on behalf of each Member who is entitled to an
allocation of "Employer Base Contributions" under the Thrift Plan
for such month. The amount of each such monthly contribution
shall be a percentage of such Member's Excess Compensation, if
any, with such percentage being equal to the percentage utilized
under the Thrift Plan to determine the Member's "Employer Base
Contribution" for such month under the Thrift Plan.
(c) For each calendar month, the Company shall defer
an amount on behalf of each Member who is entitled to an
allocation of "Employer Supplemental Base Contributions" under
the Thrift Plan for such month. The amount of each such monthly
contribution shall be a percentage of such Member's Excess
Compensation, if any, with such percentage being equal to the
percentage utilized under the Thrift Plan to determine the
Member's "Employer Supplemental Base Contribution" for such month
under the Thrift Plan.
(d) For each calendar month within a Plan Year, the
Company shall defer an amount on behalf of each Member who made
Member Deferrals pursuant to Section 3.1(a)(2), 3.1(a)(3), and/or
3.1(b)(1) for such Plan Year. The amount of each such monthly
contribution shall be equal to the amount by which (A) the sum of
the "Employer Matching Contributions," the "Employer Base
Contributions," and the "Employer Supplemental Base
Contributions" which would have been allocated to such Member's
"Accounts" under the Thrift Plan (other than to his "Deferred
Income Account") for such month if the provisions of the Thrift
Plan were administered without regard to (1) the limitations
imposed by sections 401(k)(3), 401(m)(2), 402(g), and 415 of the
Code, and (2) the exclusion of Member Deferrals under the Plan
from the definition of "Compensation" under the Thrift Plan,
exceeds (B) the sum of the "Employer Matching Contributions," the
"Employer Base Contributions," and the "Employer Supplemental
Base Contributions" which were in fact allocated to the
"Accounts" of such Member under the Thrift Plan (other than to
his Deferred Income Account) for such month. Notwithstanding the
foregoing, in determining the "Employer Matching Contributions,"
the "Employer Base Contributions," and the "Employer Supplemental
Base Contributions" which would have been allocated to such
Member's "Accounts" under the Thrift Plan pursuant to clause (A)
above, such Member's elections with respect to Cash or Deferred
Contributions and/or Voluntary Contributions under the Thrift
Plan as in effect on the first day of such Plan Year (or on the
first day such Member is a "Member" of the Thrift Plan during
such Plan Year, if later) shall be utilized. Moreover, "Employer
Matching Contributions" attributable to Member Deferrals pursuant
to Section 3.1(b)(1) shall only be deferred on behalf of a Member
pursuant to clause (A) above, if such Member has made the maximum
"Cash or Deferred Contributions" under the Thrift Plan pursuant
to section 402(g) of the Code or as permitted under the terms of
the Thrift Plan.
(e) Company Deferrals made on a Member's behalf
pursuant to Section 3.2(a) and pursuant to Section 3.2(d)
attributable to "Employer Matching Contributions" under the
Thrift Plan shall be credited to his General Account in
accordance with the procedures established from time to time by
the Plan Administrator. Company Deferrals made on a Member's
behalf pursuant to Section 3.2(b) and (c) and pursuant to Section
3.2(d) attributable to "Employer Base Contributions" and
"Employer Supplemental Base Contributions" under the Thrift Plan
shall be credited to his Base Contribution Account in accordance
with the procedures established from time to time by the Plan
Administrator.
(f) As of any date selected by the Company, the
Company may credit a Member's Account(s) with Company Deferrals
in such amount, if any, as the Company shall determine in its
sole discretion. Such credits may be made on behalf of some
Members but not others, and such credits may vary among
individual Members in amount and/or with respect to the Account
to which they are credited.
(g) A Member who does not have a time and form of
payment election in effect pursuant to Section 3.1(e) for any
Plan Year shall make a time and form of payment election, as
provided in Sections 7.2 and 7.3, for Company Deferrals pursuant
to Sections 3.2(b), 3.2(c), 3.2(d)(2), 3.2(d)(3), and/or 3.2(f)
for such Plan Year. Such election shall be made by effecting the
same in the form prescribed by the Plan Administrator. Such
election shall remain in force and effect for each subsequent
Plan Year (following such initial election) unless or until such
election is changed by a new election hereunder or pursuant to
Section 3.1(e) prior to the Entry Date of a subsequent Plan Year
to which such change relates. A Member who makes a time and form
of payment election pursuant to this Section 3.2(g) may change
his election, as of the Entry Date of any subsequent Plan Year,
by effecting a new such election prior to such Entry Date and
within the time period prescribed by the Plan Administrator.
Each Member's Accounts shall be divided into subaccounts to
reflect such Member's various elections respecting time and form
of payment.
3.3 Allocation of Net Income or Loss and Changes in Value
Among Accounts.
(a) As of each Valuation Date, the Plan Administrator
shall determine the net income (or net loss) of each Fund for the
period elapsed since the next preceding Valuation Date. The net
income (or net loss) of each Fund since the next preceding
Valuation Date shall be ascertained by the Plan Administrator in
such manner as it deems appropriate, which may include expenses
of administering the Fund, the Trust and the Plan.
(b) For purposes of allocations of net income (or net
loss), each Member's Accounts shall be divided into subaccounts
to reflect such Member's deemed investment in a particular Fund
or Funds pursuant to Article IV. As of each Valuation Date, the
net income (or net loss) of each Fund, separately and
respectively, shall be allocated among the corresponding
subaccounts of the Members who had such corresponding subaccounts
invested in such Funds since the next preceding Valuation Date.
(c) So long as there is any balance in any Account,
such Account shall continue to receive allocations pursuant to
this Section.
IV.
Deemed Investment of Funds
--------------------------
Each Member shall designate, in accordance with the procedures
established from time to time by the Plan Administrator, the manner in
which the amounts allocated to his Accounts shall be deemed to be
invested from among the Funds made available from time to time for such
purpose by the Plan Administrator. Such Member may designate one of
such Funds for the deemed investment of all the amounts allocated to
his Accounts or he may split the deemed investment of the amounts
allocated to his Accounts between such Funds in such increments as the
Plan Administrator may prescribe. If a Member fails to make a proper
designation, then his Accounts shall be deemed to be invested in the
Fund or Funds designated by the Plan Administrator from time to time
in a uniform and nondiscriminatory manner.
A Member may change his deemed investment designation for future
amounts to be allocated to his Accounts. Any such change shall be made in
accordance with the procedures established by the Plan Administrator,
and the frequency of such changes may be limited by the Plan Administrator.
A Member may elect to convert his deemed investment designation
with respect to the amounts already allocated to his Accounts. Any such
conversion shall be made in accordance with the procedures established
by the Plan Administrator, and the frequency of such conversions may be
limited by the Plan Administrator.
V.
Determination of Vested Interest and Forfeitures
------------------------------------------------
5.1 General Account. A Member shall have a 100% Vested
Interest in his General Account at all times.
5.2 Base Contribution Account. A Member shall have a
Vested Interest in his Base Contribution Account equal to his
Vested Interest in his "Employer Non-Matching Accounts" under the
Thrift Plan. Further, a Member shall have a 100% Vested Interest
in his Base Contribution Account upon his termination of
employment with the Company and its Affiliates after attainment
of his Retirement Date or by reason of death.
5.3 Forfeitures. A Member who terminates employment with
the Company and its Affiliates with a Vested Interest in his Base
Contribution Account that is less than 100% shall forfeit to the
Company the nonvested portion of such Base Contribution Account
as of the date of such termination.
VI.
In-Service Distributions
------------------------
Except as provided below, Members shall not be permitted to
make withdrawals from the Plan prior to termination of employment
with the Company and its Affiliates. Members shall not, at any
time, be permitted to borrow from the Trust Fund. Following
termination of employment with the Company and its Affiliates,
the amounts credited to a Member's Accounts shall be payable to
such Member in accordance with the provisions of Article VII.
The above to the contrary notwithstanding, in the event that
the Plan Administrator, upon written petition of a Member,
determines in its sole discretion that such Member has suffered
an Unforeseeable Financial Emergency, such Member shall be
entitled to a benefit in an amount not to exceed the lesser of
(1) the amount determined by the Plan Administrator as necessary
to meet such Member's needs created by the Unforeseeable
Financial Emergency, or (2) the then value of such Member's
Vested Interest in his Accounts. Such withdrawal benefit shall
be paid in a single lump sum, cash payment as soon as
administratively practicable after the Plan Administrator has
made its determinations with respect to the availability and
amount of such benefit. If a Member's Account(s) are deemed to
be invested in more than one Fund, such withdrawal benefit shall
be distributed pro rata from each Fund in which such Account(s)
are deemed to be invested. If a Member's Account(s) contain more
than one distribution subaccount, such withdrawal benefit shall
be considered to have been distributed, first, from the
subaccount with respect to which the earliest distribution would
be made, then, from the subaccount with respect to which the next
earliest distribution would be made, and continuing in such
manner until all of such subaccounts have been exhausted to
satisfy the withdrawal benefit.
VII.
Termination Benefits
--------------------
7.1 Amount of Benefit. Upon termination of employment of a
Member with the Company and its Affiliates for any reason, the Member,
or, in the event of the death of the Member while employed by the
Company or an Affiliate, the Member's designated beneficiary, shall be
entitled to a benefit equal in value to the Member's Vested Interest
in the balance of his Accounts as of the Valuation Date next preceding
the date the payment of such benefit is to be made or to commence
pursuant to Section 7.2.
7.2 Time of Payment. Payment of a Member's benefit under
Section 7.1 shall be made or commence, with respect to such
Member's Accounts, or with respect to such Member's subaccounts
established pursuant to Section 3.1(e) and/or 3.2(g) separately
and respectively, as soon as administratively practicable as of
the date irrevocably elected by such Member pursuant to Section
3.1(e) and/or 3.2(g) and which occurs after the Valuation Date
coinciding with or next following the date the Member terminates
his employment with the Company and its Affiliates. With respect
to any portion of a Member's benefit for which no time of payment
election is in effect, payment of such amount shall be made or
commence as soon as administratively practicable after the
Valuation Date coinciding with or next following the date the
Member terminates his employment with the Company and its
Affiliates. A Member's benefit shall not, however, be made or
commence prior to the date that all Member Deferrals and Company
Deferrals made pursuant to the Plan have been allocated to such
Member's Accounts.
7.3 Alternative Forms of Benefit Payments. A Member's
benefit under Section 7.1 shall be paid, with respect to such
Member's Accounts, or with respect to such Member's subaccounts
established pursuant to Section 3.1(e) and/or 3.2(g) separately
and respectively, in one of the following forms irrevocably
elected by such Member pursuant to Section 3.1(e) and/or 3.2(g):
(1) A single lump sum, cash payment; or
(2) Annual installment payments for a term certain of
either 5, 10 or 15 years payable to the Member or, in the
event of such Member's death prior to the end of such term
certain, to his designated beneficiary as provided in
Section 7.4.
With respect to any portion of a Member's benefit for which no
form of payment election is in effect, such amount shall be paid
in the form of annual installment payments for a term certain of
15 years payable to such Member or, in the event of such Member's
death prior to the end of such term certain, to his designated
beneficiary as provided in Section 7.4; provided, however, that
the Plan Administrator may, in its sole discretion, elect to make
such benefit payment in any other available form. If a Member
dies prior to the date the payment of his benefit begins and if
no form of payment election is in effect for any portion of such
Member's benefit, such amount shall be paid to the Member's
designated beneficiary in the form described in the preceding
sentence. If a Member dies prior to the date the payment of his
benefit begins with a form of payment election in effect, then
benefit payments shall be made to the Member's designated
beneficiary in the form elected by the Member.
7.4 Designation of Beneficiaries.
----------------------------
(a) Each Member shall have the right to designate the
beneficiary or beneficiaries to receive payment of his benefit in
the event of his death. Each such designation shall be made by
executing the beneficiary designation form prescribed by the Plan
Administrator and filing same with the Plan Administrator. Any
such designation may be changed at any time by execution of a new
designation in accordance with this Section.
(b) If no such designation is on file with the Plan
Administrator at the time of the death of the Member or such
designation is not effective for any reason as determined by the
Plan Administrator, then the designated beneficiary or
beneficiaries to receive such benefit shall be as follows:
(1) If a Member leaves a surviving spouse, his
benefit shall be paid to such surviving spouse;
(2) If a Member leaves no surviving spouse, his
benefit shall be paid to such Member's executor or
administrator, or to his heirs at law if there is no
administration of such Member's estate.
7.5 Accelerated Pay-Out of Certain Benefits.
Notwithstanding any provision in Section 7.3 to the contrary, if
a Member's benefit payments respecting any one subaccount
established pursuant to Section 3.1(e) or 3.2(g) are to be paid
in a form other than a single lump sum, cash payment and the
aggregate amount in such subaccount at the time of commencement
of such payments is less than $50,000, then the Plan Administra-
tor may, in its sole discretion, elect to cause such subaccount
to be paid in a single lump sum, cash payment.
7.6 Accelerated Pay-Out Due to Emergency. Notwithstanding
any provision in Sections 7.2 and 7.3 to the contrary, in the
event that the Plan Administrator, upon written petition of a
Member, determines in its sole discretion that such Member has
suffered an Unforeseeable Financial Emergency, such Member shall
be entitled to an emergency benefit in an amount not to exceed
the lesser of (1) the amount determined by the Plan Administrator
as necessary to meet such Member's needs created by the
Unforeseeable Financial Emergency, or (2) the then value of such
Member's Vested Interest in his Accounts. Such emergency benefit
shall be paid in a single lump sum, cash payment as soon as
administratively practicable after the Plan Administrator has
made its determinations with respect to the availability and
amount of such benefit. If a Member's Account(s) are deemed to
be invested in more than one Fund, such emergency benefit shall
be distributed pro rata from each Fund in which such Account(s)
are deemed to be invested. If a Member's Account(s) contain more
than one distribution subaccount, such emergency benefit shall be
considered to have been distributed, first, from the subaccount
with respect to which the earliest distribution would be made,
then, from the subaccount with respect to which the next earliest
distribution would be made, and continuing in such manner until
all of such subaccounts have been exhausted to satisfy the
emergency benefit. Any remaining amounts in such Member's
Account(s) following payment of such emergency benefit shall be
payable at the time and in the form otherwise provided in
Sections 7.2 and 7.3.
7.7 Payment of Benefits. To the extent the Trust Fund has
sufficient assets, the Trustee shall pay benefits to Members or
their beneficiaries, except to the extent the Company pays the
benefits directly and provides adequate evidence of such payment
to the Trustee. To the extent the Trustee does not or cannot pay
benefits out of the Trust Fund, the benefits shall be paid by the
Company. Any benefit payments made to a Member or for his
benefit pursuant to any provision of the Plan shall be debited to
such Member's Accounts. All benefit payments shall be made in
cash to the fullest extent practicable.
7.8 Unclaimed Benefits. In the case of a benefit payable
on behalf of a Member, if the Plan Administrator is unable to
locate the Member or beneficiary to whom such benefit is payable,
upon the Plan Administrator's determination thereof, such benefit
shall be forfeited to the Company. Notwithstanding the
foregoing, if subsequent to any such forfeiture the Member or
beneficiary to whom such benefit is payable makes a valid claim
for such benefit, such forfeited benefit shall be restored to the
Plan by the Company.
7.9 Committee Determination of Pay-Out of Certain Benefits.
Notwithstanding any provision in Section 3.1(e) to the contrary,
the form of payment of the benefits of a Member who retires from
the Company during the 1997 calendar year with respect to the
portion of his General Account attributable to the amount, if
any, credited to his "Account" on December 31, 1994, under the
Plan as in effect immediately prior to this restatement, and the
net income (or net loss) allocated with respect thereto may, in
the sole discretion of the Plan Administrator, be changed from
the form elected by such Member pursuant to the provisions of the
Plan as in effect immediately prior to this restatement to one or
more other forms provided in Section 7.3. In making its
determination as to the form(s) of payment, the Plan
Administrator may consider the age, family status, health,
financial status, or such other facts as it deems relevant
respecting the Member. The Member may, but shall not be required
to, express his preference to the Plan Administrator as to such
form(s) of payment, but the Plan Administrator shall be under no
obligation to follow such preference. Any such change shall be
prior to the time such portion becomes payable to such Member.
VIII.
Administration of the Plan
--------------------------
8.1 Appointment of Plan Administrator. The general
administration of the Plan shall be vested in the Plan Administrator
which shall be appointed by the Directors.
8.2 Resignation and Removal. At any time during its term
of office, the Plan Administrator may resign by giving written
notice to the Directors, such resignation to become effective
upon the appointment of a substitute Plan Administrator or, if
earlier, the lapse of thirty days after such notice is given as
herein provided. At any time during its term of office, and for
any reason, the Plan Administrator may be removed by the
Directors.
8.3 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 Member or beneficiary such records as pertain to that
individual's interest in the Plan. The Plan Administrator shall
designate the person or persons who shall be authorized to sign for
the Plan Administrator and, upon such designation, the signature of
such person or persons shall bind the Plan Administrator.
8.4 Self-Interest of Plan Administrator. No delegate of
the 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 a delegate of the Plan Administrator is so disqualified to
act, the Directors shall decide the matter in which he is
disqualified.
8.5 Compensation and Bonding. The Plan Administrator shall
not receive compensation with respect to its services as Plan
Administrator. To the extent required by applicable law, or
required by the Company, the Plan Administrator shall furnish
bond or security for the performance of its duties hereunder.
8.6 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,
authority and duty:
(a) to make rules, regulations and bylaws for the
administration of the Plan which are not inconsistent with
the terms and provisions hereof, provided such rules,
regulations and bylaws are evidenced in writing and copies
thereof are delivered to the Trustee and to the Company;
(b) to construe all terms, provisions, conditions and
limitations of the Plan;
(c) to correct any defect or supply any omission or
reconcile any inconsistency that may appear in the Plan, in
such manner and to such extent as it shall deem expedient to
carry the Plan into effect for the greatest benefit of all
interested parties;
(d) to employ and compensate such accountants,
attorneys, investment advisors and other agents and
employees as the Plan Administrator may deem necessary or
advisable in the proper and efficient administration of the
Plan;
(e) to determine all questions relating to eligibility;
(f) to determine the amount, manner and time of
payment of any benefits and to prescribe procedures to be
followed by distributes in obtaining benefits;
(g) to make a determination as to the right of any
person to a benefit under the Plan; and
(h) to receive and review reports from the Trustee as
to the financial condition of the Trust Fund, including its
receipts and disbursements.
8.7 Company to Supply Information. The Company shall
supply full and timely information to the Plan Administrator
relating to the Excess Compensation of all Members, their
benefits under the Thrift Plan, their ages, their retirement,
death or other termination of employment and such other pertinent
facts as the Plan Administrator may require. The Company shall
advise the Trustee of such of the foregoing facts as are deemed
necessary for the Trustee to carry out the Trustee's duties under
the Plan. When making a determination in connection with the
Plan, the Plan Administrator shall be entitled to rely upon the
aforesaid information furnished by the Company.
8.8 Claims Review. In any case in which a claim for Plan
benefits of a Member or beneficiary is denied or modified, the
Plan Administrator shall furnish written notice to the claimant
within ninety days (or within 180 days if additional information
requested by the Plan Administrator necessitates an extension of
the ninety-day period), which notice shall:
(a) State the specific reason or reasons for the
denial or modification;
(b) Provide specific reference to pertinent Plan
provisions on which the denial or modification is based;
(c) Provide a description of any additional material
or information necessary for the Member, his beneficiary, or
representative to perfect the claim and an explanation of
why such material or information is necessary; and
(d) Explain the Plan's claim review procedure as
contained herein.
In the event a claim for Plan benefits is denied or modified, if
the Member, his beneficiary, or a representative of such Member
or beneficiary desires to have such denial or modification
reviewed, he must, within sixty days following receipt of the
notice of such denial or modification, submit a written request
for review by the Plan Administrator of its initial decision. In
connection with such request, the Member, his beneficiary, or the
representative of such Member or beneficiary may review any
pertinent documents upon which such denial or modification was
based and may submit issues and comments in writing. Within
sixty days following such request for review the Plan
Administrator shall, after providing a full and fair review,
render its final decision in writing to the Member, his
beneficiary or the representative of such Member or beneficiary
stating specific reasons for such decision and making specific
references to pertinent Plan provisions upon which the decision
is based. If special circumstances require an extension of such
sixty-day period, the Plan Administrator's decision shall be
rendered as soon as possible, but not later than 120 days after
receipt of the request for review. If an extension of time for
review is required, written notice of the extension shall be
furnished to the Member, beneficiary, or the representative of
such Member or beneficiary prior to the commencement of the
extension period.
8.9 Indemnity. To the extent permitted by applicable law,
the Company shall indemnify and save harmless the Directors and
any individual acting as Plan Administrator against any and all
expenses, liabilities and claims (including legal fees incurred
to defend against such liabilities and claims) arising out of
their discharge in good faith of responsibilities under or
incident to the Plan. Expenses and liabilities arising out of
willful misconduct shall not be covered under this indemnity.
This indemnity shall not preclude such further indemnities as may
be available under insurance purchased by the Company or provided
by the Company under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, as such indemnities are
permitted under applicable law.
IX.
Administration of Funds
-----------------------
9.1 Payment of Expenses. All expenses incident to the
administration of the Plan and Trust, including but not limited
to, legal, accounting, Trustee fees, and expenses of the Plan
Administrator, may be paid by the Company and, if not paid by the
Company, shall be paid by the Trustee from the Trust Fund, if
any.
9.2 Trust Fund Property. All income, profits, recoveries,
contributions, forfeitures and any and all moneys, securities and
properties of any kind at any time received or held by the
Trustee, if any, shall be held for investment purposes as a
commingled Trust Fund pursuant to the terms of the Trust
Agreement. The Plan Administrator shall maintain one or more
Accounts in the name of each Member, but the maintenance of an
Account designated as the Account of a Member shall not mean that
such Member shall have a greater or lesser interest than that due
him by operation of the Plan and shall not be considered as
segregating any funds or property from any other funds or
property contained in the commingled fund. No Member shall have
any title to any specific asset in the Trust Fund, if any.
X.
Nature of the Plan
------------------
The Company intends and desires by the adoption of the Plan
to recognize the value to the Company of the past and present
services of employees covered by the Plan and to encourage and
assure their continued service with the Company by making more
adequate provision for their future retirement security. The
establishment of the Plan is, in part, made necessary by certain
benefit limitations which are imposed on the Thrift Plan by the
Code. The Plan is intended to constitute an unfunded, unsecured
plan of deferred compensation for a select group of management or
highly compensated employees of the Company. Plan benefits
herein provided are to be paid out of the Company's general
assets. Nevertheless, subject to the terms hereof and of the
Trust Agreement, the Company may transfer money or other property
to the Trustee and the Trustee shall pay Plan benefits to Members
and their beneficiaries out of the Trust Fund. To the extent the
Company transfers assets to the Trustee pursuant to the Trust
Agreement, the Plan Administrator may, but need not, establish
procedures for the Trustee to invest the Trust Fund in accordance
with each Member's designated deemed investments pursuant to
Article IV respecting the portion of the Trust Fund assets equal
to such Member's Account(s).
The Directors, in their sole discretion, may establish the
Trust and direct the Company to enter into the Trust Agreement.
In such event, the Company shall remain the owner of all assets
in the Trust Fund and the assets shall be subject to the claims
of Company creditors if the Company ever becomes insolvent. For
purposes hereof, the Company shall be considered "insolvent" if
(a) the Company is unable to pay its debts as they become due, or
(b) the Company is subject to a pending proceeding as a debtor
under the United Sates Bankruptcy Code (or any successor federal
statute). The chief executive officer of the Company and its
board of directors shall have the duty to inform the Trustee in
writing if the Company becomes insolvent. Such notice given
under the preceding sentence by any party shall satisfy all of
the parties' duty to give notice. When so informed, the Trustee
shall suspend payments to the Members and hold the assets for the
benefit of the Company's general creditors. If the Trustee
receives a written allegation that the Company is insolvent, the
Trustee shall suspend payments to the Members and hold the Trust
Fund for the benefit of the Company's general creditors, and
shall determine within the period specified in the Trust
Agreement whether the Company is insolvent. If the Trustee
determines that the Company is not insolvent, the Trustee shall
resume payments to the Members. No Member or beneficiary shall
have any preferred claim to, or any beneficial ownership interest
in, any assets of the Trust Fund.
XI.
Adopting Entities
-----------------
It is contemplated that other corporations, associations,
partnerships or proprietorships may adopt this Plan and thereby
become the Company. Any such entity, whether or not presently
existing, may become a party hereto by appropriate action of its
officers without the need for approval of its board of directors
or noncorporate counterpart or of the Directors; provided,
however, that such entity must be an Affiliate. The provisions
of the Plan shall apply separately and equally to each Company
and its employees in the same manner as is expressly provided for
Baker Hughes Incorporated and its employees, except that the
power to appoint or otherwise affect the Plan Administrator or
the Trustee and the power to amend or terminate the Plan or amend
the Trust Agreement shall be exercised by the Directors alone.
Transfer of employment among Companies and Affiliates shall not
be considered a termination of employment hereunder. Any Company
may, by appropriate action of its officers without the need for
approval of its board of directors or noncorporate counterpart or
the Directors, terminate its participation in the Plan.
Moreover, the Directors may, in their discretion, terminate a
Company's Plan participation at any time.
XII.
Miscellaneous
-------------
12.1 Not Contract of Employment. The adoption and
maintenance of the Plan shall not be deemed to be a contract
between the Company and any person or to be consideration for the
employment of any person. Nothing herein contained shall be
deemed to give any person the right to be retained in the employ
of the Company or to restrict the right of the Company to
discharge any person at any time nor shall the Plan be deemed to
give the Company the right to require any person to remain in the
employ of the Company or to restrict any person's right to
terminate his employment at any time.
12.2 Alienation of Interest Forbidden. The interest of a
Member or his beneficiary or beneficiaries hereunder may not be
sold, transferred, assigned, or encumbered in any manner, either
voluntarily or involuntarily, and any attempt so to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall be null and void; neither shall the benefits hereunder
be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person to whom such benefits or funds
are payable, nor shall they be an asset in bankruptcy or subject
to garnishment, attachment or other legal or equitable
proceedings.
12.3 Withholding. All deferrals and payments provided for
hereunder shall be subject to applicable withholding and other
deductions as shall be required of the Company under any
applicable local, state or federal law.
12.4 Amendment and Termination. The Directors may from time
to time, in their discretion, amend, in whole or in part, any or
all of the provisions of the Plan; provided, however, that no
amendment may be made that would impair the rights of a Member
with respect to amounts already allocated to his Accounts. The
Directors may terminate the Plan at any time. In the event that
the Plan is terminated, the balance in a Member's Accounts shall
be paid to such Member or his designated beneficiary in the
manner specified by the Plan Administrator, which may include the
payment of a single lump sum, cash payment in full satisfaction
of all of such Member's or beneficiary's benefits hereunder.
12.5 Severability. If any provision of this Plan shall be
held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions hereof;
instead, each provision shall be fully severable and the Plan
shall be construed and enforced as if said illegal or invalid
provision had never been included herein.
12.6 Governing Laws. All provisions of the Plan shall be
construed in accordance with the laws of Texas except to the
extent preempted by federal law.
Exhibit 5.1
January 13, 1997
Baker Hughes Incorporated
3900 Essex Lane
Houston, Texas 77027
Gentlemen:
I am the General Counsel for Baker Hughes Incorporated, a
Delaware corporation (the "Company"), and have acted in such
capacity in connection with the registration under the Securities
Act of 1933, as amended (the "Act"), of $30,000,000 of deferred
compensation obligations (the "Deferred Compensation Obligations")
which represent unsecured obligations of the Company to pay
deferred compensation in the future in accordance with the terms of
the Baker Hughes Incorporated Supplemental Retirement Plan (the
"Plan"), to be offered upon the terms and subject to the conditions
set forth in the Registration Statement on Form S-8 (the
"Registration Statement") relating thereto to be filed with the
Securities and Exchange Commission on January 13, 1997.
In connection therewith, I have examined originals or copies
certified or otherwise identified to my satisfaction of the
Restated Certificate of Incorporation of the Company, the By-laws
of the Company, the Plan, the corporate proceedings with respect to
the Company's Supplemental Retirement Plan and such other documents
and instruments as I have deemed necessary or appropriate for the
expression of the opinions contained herein.
I have assumed the authenticity and completeness of all
records, certificates and other instruments submitted to me as
originals, the conformity to original documents of all records,
certificates and other instruments submitted to me as copies, the
authenticity and completeness of the originals of those records,
certificates and other instruments submitted to me as copies and
the correctness of all statements of fact contained in all records,
certificates and other instruments that I have examined.
Based on the foregoing, and having a regard for such legal
considerations as I have deemed relevant, I am of the opinion that:
(i) The Company has been duly organized and is validly
existing in good standing under the laws of the State of
Delaware.
(ii) When issued by the Company in the manner provided in
the Plan, the Deferred Compensation Obligations will be
valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms,
subject, as to enforcement, (x) to bankruptcy,
insolvency, reorganization, arrangement, moratorium and
other laws of general applicability relating to or
affecting creditor's rights, and (y) to general
principles of equity, whether such enforcement is
considered in a proceeding in equity or at law.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
Lawrence O'Donnell, III
Vice President and General Counsel
LOD/ng
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement of Baker Hughes Incorporated on Form S-8
relating to the Baker Hughes Incorporated Supplemental Retirement
Plan of our report dated November 13, 1996, incorporated by
reference in the Annual Report on Form 10-K of Baker Hughes
Incorporated for the year ended September 30, 1996.
Deloitte & Touche LLP
Houston, Texas
January 13, 1997
