Stock Ownership Policy
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The Compensation Committee (the "Committee") of the Board of Directors of Baker Hughes Incorporated (the "Company") has determined that in order to further align the long-term interests of the Company's stockholders and its senior officers ("Officers") it is in the best interest of the Company to require that the Officers have significant direct ownership in the common stock of the Company. As a result of such determination, the Committee and the Board have adopted the Stock Ownership Policy ("Policy") to provide direction to the Officers as to the level and amounts of ownership considered satisfactory in meeting the ownership requirements.
The Committee requires that the Officers have direct ownership of the Company's common stock in at least the following amounts:
Compliance PeriodAn Officer has five years to comply with the ownership requirement starting from the date appointed to a position noted above. If an Officer is promoted to a position with a higher Ownership Salary Multiple, the Officer will have five years from the date of the change in position to reach the higher expected Stock Ownership Level but still must meet the prior expected Stock Ownership Level within the original five years of the date first appointed to such prior position. For those Officers with the ownership requirements reflected in hiring letters, the date of hire marks the start of the five-year period. Until the applicable Stock Ownership Level is met, the following shall apply:
In the event an Officer has a personal hardship, only the Compensation Committee of the Board of Directors or the Chief Executive Officer of the Company can approve any deviations from this Policy.
Required Ownership SharesUpon reaching the required ownership level in accordance with this Policy, the Officer shall certify to the Corporate Secretary that the ownership requirements have been met and the Corporate Secretary shall confirm such representation and record the number of shares required to be held by the Officer under this Policy based on the closing price of the shares and the Officer's current salary level on the day prior to certification by the Officer (the "Required Ownership Shares"). At such time, Section III a, b, c and d above, shall therefore no longer apply to such Officer. The Officer will not be required to accumulate any shares in excess of the Required Ownership Shares so long as the Required Ownership Shares are held by the Officer, regardless of changes in the price of the shares. However, the Officer may only sell shares if, after the sale of shares, the Officer will still be in compliance with the Stock Ownership Level under this Policy as of the day the shares are sold based on current share price and salary level.
Annual ReviewThe Committee will review all Required Ownership Shares levels of the Officers covered by the Policy on an annual basis. The Chief Executive Officer of the Company will be responsible for ensuring compliance with this Policy. This Policy replaces and supersedes in its entirety any previous Stock Ownership Policy or Guidelines. |




