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OMB APPROVAL
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OMB Number 3235-0104
Expires: September 30, 1998
Estimated average burden
hours per response ....... 0.5
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 3
INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(f) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person
Western Atlas Inc.
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(Last) (First) (Middle)
10205 Westheimer Road
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(Street)
Houston TX 77042
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(City) (State) (Zip)
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2. Date of Event Requiring Statement (Month/Day/Year)
May 10, 1998
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3. IRS or Social Security Number of Reporting Person (Voluntary)
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4. Issuer Name and Ticker or Trading Symbol
Baker Hughes Incorporated (NYSE: BHI)
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5. Relationship of Reporting Persons to Issuer
(Check all applicable)
[ ] Director [ X ] 10% Owner
[ ] Officer (give title below) [ ] Other (specify below)
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6. If Amendment, Date of Original (Month/Day/Year)
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7. Individual or Joint/Group Filing:
[ X ] Form filed by One Reporting Person
[ ] Form filed by More than One Reporting Person
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Table I -- Non-Derivative Securities Beneficially Owned
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<TABLE>
<CAPTION>
3. Ownership Form:
2. Amount of Securities Direct (D) or
1. Title of Security Beneficially Owned Indirect (I) 4. Nature of Indirect Beneficial Ownership
(Instr. 4) (Instr. 4) (Instr. 5) (Instr.5)
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<S> <C> <C> <C>
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</TABLE>
Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly.
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FORM 3 CONTINUATION SHEET
ITEM 1: WESTERN ATLAS INC.
10205 WESTEHIMER ROAD
HOUSTON, TX 77042
ITEM 2: MAY 10, 1998
ITEM 4: BAKER HUGHES INCORPORATED (NYSE: BHI)
FORM 3 (Continued)
Table II -- Derivative Securities Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
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<TABLE>
<CAPTION>
5. Owner-
3. Title and Amount of Securities ship
Underlying Derivative Securities Form of
2. Date Exercisable (Instr. 4) Derivative
and Expiration Date --------------------------------- 4. Conver- Security:
(Month/Day/Year) Amount sion or Direct 6. Nature of
---------------------- or Exercise (D) or Indirect
Date Expira- Number Price of Indirect Beneficial
1. Title of Derivative Exer- tion of Derivative (I) Ownership
Security (Instr. 4) cisable Date Title Shares Security (Instr.5) (Instr. 5)
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<S> <C> <C> <C> <C> <C> <C> <C>
Option (see attached) (see (see Common Stock 33,772,146 (see D
(Contingent right to buy) attached) attached) attached)
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</TABLE>
Explanation of Responses:
See attached.
(see attached) (see attached)
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**Signature of Reporting Person Date
** Intentional misstatements or omissions of facts constitute Federal Criminal
Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed.
If space is insufficient, see Instruction 6 for procedure.
Page 2 of 4
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FORM 3 CONTINUATION SHEET
ITEM 1: WESTERN ATLAS INC.
10205 WESTHEIMER ROAD
HOUSTON, TX 77042
ITEM 2: MAY 10, 1998
ITEM 4: BAKER HUGHES INCORPORATED (NYSE: BHI)
EXPLANATION OF RESPONSES
This Initial Statement of Beneficial Ownership on Form 3 (this "Form")
is filed by Western Atlas Inc., a Delaware corporation ("Western Atlas"). On May
10, 1998, Western Atlas entered into an Agreement and Plan of Merger (the
"Merger Agreement"), by and among Western Atlas, Baker Hughes Incorporated
("Baker Hughes") and Baker Hughes Delaware I, Inc. ("Merger Sub"), providing
for, among other things, the merger (the "Merger") of Merger Sub with and into
Western Atlas. In connection with the Merger, Western Atlas entered into a Stock
Option Agreement (the "Stock Option Agreement"), dated as of May 10, 1998, with
Baker Hughes. Pursuant to the Stock Option Agreement, Baker Hughes granted
Western Atlas an option (the "Western Atlas Option") to purchase 33,772,146
shares of Baker Hughes Common Stock at an exercise price of $41.125 per share.
The Western Atlas Option is exercisable at any time following the
occurrence of an Exercise Event (as defined below). The Option expires on the
earlier to occur of: (i) the effective time of the Merger, (ii) the first
anniversary of the receipt by Western Atlas of written notice from Baker Hughes
of the occurrence of an Exercise Event, and (iii) termination of the Merger
Agreement in accordance with its terms prior to the occurrence of an Exercise
Event.
An "Exercise Event" is any of the events giving rise to the
obligation of Baker Hughes to pay Western Atlas a $50 million fee under Section
9.5 of the Merger Agreement. These events include the following: (i) Baker
Hughes terminates the Merger Agreement after the Board of Directors of Baker
Hughes both (a) determines that proceeding with the Merger would be inconsistent
with its fiduciary obligations by reason of a third party's proposal that is
superior to the Merger to acquire, or combine with, Baker Hughes, and (b) elects
to terminate the Merger Agreement prior to the date that the stockholders of
both of Western Atlas and Baker Hughes have approved the Merger Agreement and
the Merger, subject to certain conditions; (ii) Western Atlas or Baker Hughes
terminates the Merger Agreement after both (a) the public announcement of a
third party's proposal that is superior to the Merger to acquire, or combine
with, Baker Hughes, and (b) a Baker Hughes stockholders meeting (including
reconvened meetings after adjournments or postponements thereof) has been held,
and the stockholders at that meeting failed to approve the Merger and the Merger
Agreement; and (iii) Western Atlas terminates the Merger Agreement after both
(a) the public announcement, or receipt by the Board of Directors of Baker
Hughes, of a third party's proposal that is superior to the Merger to acquire,
or combine with, Baker Hughes, and (b) the Board of Directors of Baker Hughes
has withdrawn or materially modified, in a manner adverse to Western Atlas, the
approval or recommendation of the Board of Directors of Baker Hughes or
recommended the superior proposal.
The Stock Option Agreement also contains certain "put" and "call"
features, registration rights and a limitation on the total profit that Western
Atlas may receive from certain transactions relating to the Western Atlas Option
and shares of Baker Hughes Common Stock acquired pursuant to the Western Atlas
Option and certain termination fees that may be paid by Baker Hughes to Western
Atlas under the Merger Agreement.
Prior to the Western Atlas Option becoming exercisable and being
exercised, Western Atlas expressly disclaims beneficial ownership of shares of
Baker Hughes Common Stock which are purchasable by Western Atlas upon the
Western Atlas Option becoming exercisable and being exercised. Neither the
filing of this Form 3 nor any of its contents shall be deemed to constitute an
admission that Western Atlas is the beneficial owner of the shares of Baker
Hughes Common Stock subject to the Western Atlas Option for purposes of Section
13(d) or 16 of the Securities Exchange Act of 1934, as amended, or for any other
purpose, and such beneficial ownership is expressly disclaimed.
Page 3 of 4
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FORM 3 CONTINUATION SHEET
ITEM 1: WESTERN ATLAS INC.
10205 WESTHEIMER ROAD
HOUSTON, TX 77042
ITEM 2: MAY 10, 1998
ITEM 4: BAKER HUGHES INCORPORATED (NYSE: BHI)
SIGNATURES OF REPORTING PERSONS
Dated as of: May 20, 1998
WESTERN ATLAS INC.
By: /s/James E. Brasher
Name: James E. Brasher
Title: Senior Vice President
Page 4 of 4
