Baker Hughes Incorporated (NYSE:BHI) Files An 8-K Other Events
Item 8.01. Other Events.
Explanatory Note
The following disclosures update the definitive proxy statement
(the Proxy Statement) related to the proposed transactions (the
Transactions) to combine BHI with the Oil Gas business (GE OG) of
General Electric Company (GE) filed by BHI on May 30, 2017 and
the Registration Statement on Form S-4, effective May 30, 2017,
filed by Bear Newco, Inc., to be renamed Baker Hughes, a GE
company (“BHGE”) in connection with the closing of the
Transactions.
| (1) |
On June 12, 2017, GE announced that Jeffrey R. Immelt, GEs Chairman and CEO, will retire as CEO on July 31, 2017, and will remain Chairman of the Board of GE for a transition period through December 31, 2017. Mr. Immelt will serve as Chairman of BHGE immediately following the anticipated combination of GE Oil Gas with Baker Hughes. |
The description of Directors of New Baker Hughes beginning on
page 234 of the Proxy Statement provides a brief biography of
each director nominee of BHGE, including a brief description for
Mr. Immelt. Due to the announced changes to Mr. Immelts position
at GE described above, this amendment to the Form 8-K updates Mr.
Immelts biography in the Directors of New Baker Hughes disclosure
to reflect such changes.
| (2) |
As reported on the Form 8-K, GE OG entered into an offer letter and stay and win award letter with each of Derek Mathieson (Chief Commercial Officer for BHI) and Belgacem Chariag (President, Global Operations for BHI) on June 1 and June 2, 2017, respectively, which set forth the terms on which the executive would be employed by BHGE, following the closing of the Transactions. Each letter is contingent on the closing of the Transactions and ratification by the Board of Directors of BHGE, and each letter will become an obligation of BHGE on the closing of the Transactions. |
Each letter includes a waiver by the executive of his rights to,
and his release of all claims for any payments or benefits
provided under, his existing change in control agreement with BHI
and any other retention, severance or change in control payments
or benefits to which he may be entitled under any plan, agreement
or arrangement of BHI or BHGE (except for any rights he may have
to the existing terms of his BHI equity awards, accelerated
vesting of his accounts under the BHI supplemental retirement
plan to the existing terms of such plan, and any payment to the
change in control provision of the BHI Annual Incentive
Compensation Plan for Employees).
The Golden Parachute Compensation table beginning on page 125 of
the Proxy Statement describes and quantifies the amounts that
will or may become payable to Messrs. Chariag and Mathieson in
connection with the Transactions based on their existing change
in control agreements with BHI and assuming that the Transactions
had become effective on May 1, 2017 and that each of their
employment had been terminated immediately after the closing by
BHI without cause or each of them had resigned for good reason.
Due to the changes to the compensation arrangements of Messrs.
Chariag and Mathieson described in the Form 8-K, this amendment
to the Form 8-K updates the Golden Parachute Compensation
disclosure to reflect such changes.
Updated Golden Parachute Compensation
The paragraph on page 125 of the Proxy Statement is hereby
amended by adding the phrase Other than for Messrs. Chariag and
Mathieson, at the beginning thereof, and by adding the following
sentence at the end thereof: The estimates in the table for each
of Messrs. Chariag and Mathieson assume that the Transactions had
become effective on June 2, 2017 and that the employment of the
executive had been terminated immediately after the closing of
the Transactions, in the case of arrangements with Baker Hughes,
by Baker Hughes without cause or by the executive for good reason
(see definitions above under Change in Control and Severance
ArrangementsCause and Good Reason) or, in the case of the stay
and win award letters, by New Baker Hughes without cause (see
definition below under Stay and Win Award LettersCause).
The table (and the corresponding footnotes) beginning on page 125
of the Proxy Statement are hereby amended by deleting the
information therein that relates to Messrs. Chariag and Mathieson
and replacing it with the following:
| Name |
Cash(1) ($) |
Equity(2) ($) |
Pension/ NQDC ($) |
Perquisites/ |
Tax |
Total ($) | ||||||||||||||||||
| Belgacem Chariag, President, Global Operations | 3,802,356 | 12,141,483 | 30,000 | 3,512,074 | 19,485,913 | |||||||||||||||||||
| Derek Mathieson, Chief Commercial Officer | 3,449,816 | 7,172,955 | 30,000 | 10,652,771 | ||||||||||||||||||||
| (1) |
The amounts in this column reflect the sum of (a) a lump sum payment in respect of the prorated target amount of the executive officers annual bonus for 2017, payable to the executive officer on a single trigger basis at the closing of the Transactions (see above under Annual BonusesSingle Trigger Payment) and (b) a lump sum severance payment equal to the unpaid portion of the executives cash retention award plus 18 months of base salary (less any notice or severance payment required by law or other contract), payable to the executive under the stay and win award letter on a double trigger basis on termination of employment without cause or due to permanent disability or death during the three-year period following the closing of the Transactions. The following table breaks down the amounts referred to in clauses (a) and (b): |
|
Name |
Single Trigger Prorated Bonus ($) | Double Trigger Severance ($) | Total ($) | |||||||||
| Mr. Chariag | 382,356 | 3,420,000 | 3,802,356 | |||||||||
| Mr. Mathieson | 261,022 | 3,188,794 | 3,449,816 | |||||||||
| (2) |
Each of the executive officers holds restricted stock |
reflect the grant value as set forth in the executive officers
stay and win award letter. The following table breaks down the
amounts by single trigger versus double trigger vesting:
|
Name |
Single Trigger Vesting, Baker Hughes Awards ($) |
Double Trigger Vesting, Baker |
Double Trigger Vesting, Founders Grant ($) | Total ($) | ||||||||||||
| Mr. Chariag | 6,586,936 | 2,929,547 | 2,625,000 | 12,141,483 | ||||||||||||
| Mr. Mathieson | 3,006,689 | 2,347,516 | 1,818,750 | 7,172,955 | ||||||||||||
| (3) |
The amounts in this column reflectthe outplacement support that each executive officer would be entitled to receive under the stay and win award letter on a double trigger basis on termination of employment without cause during the three-year period following the closing of the Transactions. |
| (4) |
The amounts in this column reflect the reimbursement that |
Stay and Win Award LettersCause
The stay and win award letter with each of Messrs. Chariag and
Mathieson defines cause to mean the executives (a) material
failure to perform his employment duties (unless resulting from
incapacity due to physical or mental illness), (b) willful
engagement in dishonesty, illegal conduct or gross misconduct,
(c) embezzlement, misappropriation or fraud or (d) conviction of
or plea of guilty or nolo contendere to a crime that constitutes
a felony (or state law equivalent) or a crime that constitutes a
misdemeanor involving moral turpitude, if such felony or other
crime is work-related, materially impairs the executives ability
to perform services for New Baker Hughes or its affiliates or
results in material harm to New Baker Hughes or its affiliates.
Updated Biography for Jeffrey R. Immelt
The paragraph on page 234 of the Proxy Statement under the header
Jeffrey R. Immelt (61) is hereby amended by adding the sentence
He will retire as Chief Executive Officer of GE on July 31, 2017,
and will remain Chairman of the Board of Directors of GE for a
transition period through December 31, 2017. after the first
sentence thereof.
Additional Information and Where to Find It
In connection with the proposed transaction between GE and Baker
Hughes, the new NYSE listed corporation (Bear Newco, Inc. or
Newco) has filed with the SEC a registration statement on Form
S-4, including Amendments No. 1 and 2 thereto. The registration
statement was declared effective by the SEC on May 30, 2017.
Newco and Baker Hughes have also filed with the SEC a definitive
combined proxy statement/prospectus (the Combined Proxy
Statement/Prospectus) and Baker Hughes has mailed the Combined
Proxy Statement/Prospectus to its stockholders and has filed
other documents regarding the proposed transaction with the SEC.
This communication is not a substitute for any proxy statement,
registration statement, proxy statement/prospectus or other
documents Baker Hughes and/or Newco may file with the SEC in
connection with the proposed transaction. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE
COMBINED PROXY STATEMENT/PROSPECTUS, ANY AMENDMENTS OR
SUPPLEMENTS TO THE COMBINED PROXY STATEMENT/PROSPECTUS AND OTHER
DOCUMENTS FILED BY BAKER HUGHES OR NEWCO WITH THE SEC IN
CONNECTION WITH THE PROPOSED TRANSACTION, BECAUSE THESE DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION. Investors and security
holders are able to obtain free copies of the Combined Proxy
Statement/Prospectus and other documents filed with the SEC by
Baker Hughes and/or Newco through the website maintained by the
SEC at www.sec.gov. Investors and security holders will
also be able to obtain free copies of the documents filed by
Newco and/or Baker Hughes with the SEC on Baker Hughes website at
http://www.bakerhughes.com or by contacting Baker Hughes
Investor Relations at [email protected] or by
calling 1-713-439-8822.
No Offer or Solicitation
This communication is for informational purposes only and not
intended to and does not constitute an offer to subscribe for,
buy or sell, the solicitation of an offer to subscribe for, buy
or sell or an invitation to subscribe for, buy or sell any
securities or the solicitation of any vote or approval in any
jurisdiction to or in connection with the proposed transaction or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable
law. No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
Participants in the Solicitation
GE, Baker Hughes, Newco, their respective directors, executive
officers and other members of its management and employees may be
deemed to be participants in the solicitation of proxies in
connection with the proposed transaction. Information regarding
the persons who may, under the rules of the SEC, be deemed
participants in the solicitation of proxies in connection with
the proposed transaction, including a description of their direct
or indirect interests, by security holdings or otherwise, is set
forth in the Combined Proxy Statement/Prospectus and other
relevant materials filed with the SEC. Information regarding the
directors and executive officers of GE is contained in GEs proxy
statement for its 2017 annual meeting of stockholders, filed with
the SEC on March 8, 2017, its Annual Report on Form 10-K for the
year ended December 31, 2016, which was filed with the SEC on
February 24, 2017, its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2017, which was filed with the SEC on May
5, 2017 and certain of its Current Reports filed on Form 8-K.
Information regarding the directors and executive officers of
Baker Hughes is contained in Baker Hughes proxy statement for its
2017 annual meeting of stockholders, filed with the SEC on March
9, 2017, its Annual Report on Form 10-K for the year ended
December 31, 2016, which was filed with the SEC on February 8,
2017, its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2017, which was filed with the SEC on April 28, 2017
and certain of its Current Reports filed on Form 8-K. These
documents can be obtained free of charge from the sources
indicated above.
Caution Concerning Forward-Looking Statements
This communication contains forward-looking statements as that
term is defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934,
as amended by the Private Securities Litigation Reform Act of
1995, including statements regarding the proposed transaction
between GE and Baker Hughes. All statements, other than
historical facts, including statements regarding the expected
timing and structure of the proposed transaction; the ability of
the parties to complete the proposed transaction considering the
various closing conditions; the expected benefits of the proposed
transaction such as improved operations, enhanced revenues and
cash flow, synergies, growth potential, market profile, customers
business plans and financial strength; the competitive ability
and position of the combined company following completion of the
proposed transaction, including the projected impact on GEs
earnings per share; oil and natural gas market conditions; costs
and availability of resources; legal, economic and regulatory
conditions; and any assumptions underlying any of the foregoing,
are forward-looking statements. Forward-looking statements
concern future circumstances and results and other statements
that are not historical facts and are sometimes identified by the
words may, will, should, potential, intend, expect, endeavor,
seek, anticipate, estimate, overestimate, underestimate, believe,
could, project, predict, continue, target or other similar words
or expressions. Forward-looking statements are based upon current
plans, estimates and expectations that are subject to risks,
uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
indicated or anticipated by such forward-looking statements. The
inclusion of such statements should not be regarded as a
representation that such plans, estimates or expectations will be
achieved. Important factors that could cause actual results to
differ materially from such plans, estimates or expectations
include, among others, (1)that one or more closing conditions to
the transaction, including certain regulatory approvals, may not
be satisfied or waived, on a timely basis or otherwise, including
that a governmental entity may prohibit, delay or refuse to grant
approval for the consummation of the proposed transaction, may
require conditions, limitations or restrictions in connection
with such approvals or that the required approval by the
stockholders of Baker Hughes may not be obtained; (2)the risk
that the proposed transaction may not be completed in the time
frame expected by GE or Baker Hughes, or at all; (3)unexpected
costs, charges or expenses resulting from the proposed
transaction; (4)uncertainty of the expected financial performance
of the combined company following completion of the proposed
transaction; (5)failure to realize the anticipated benefits of
the proposed transaction, including as a result of delay in
completing the proposed transaction or integrating the businesses
of GE, Baker Hughes and Newco; (6)the ability of the combined
company to implement its business strategy; (7)difficulties and
delays in achieving revenue and cost synergies of the combined
company; (8)inability to retain and hire key personnel; (9)the
occurrence of any event that could give rise to termination of
the proposed transaction; (10)the risk that stockholder
litigation in connection with the proposed transaction or other
settlements or investigations may affect the timing or occurrence
of the contemplated merger or result in significant costs of
defense, indemnification and liability; (11)evolving legal,
regulatory and tax regimes; (12)changes in general economic
and/or industry specific conditions, including oil price changes;
(13)actions by third parties, including government agencies; and
(14) other risk factors as detailed from time to time in GEs and
Baker Hughes reports filed with the SEC, including GEs and Baker
Hughes annual report on Form 10-K, periodic
quarterly reports on Form 10-Q, periodic current reports on Form
8-K and other documents filed with the SEC. The foregoing list of
important factors is not exclusive.
Any forward-looking statements speak only as of the date of this
communication. Neither GE nor Baker Hughes undertakes any
obligation to update any forward-looking statements, whether as a
result of new information or development, future events or
otherwise, except as required by law. Readers are cautioned not
to place undue reliance on any of these forward-looking
statements.
About Baker Hughes Incorporated (NYSE:BHI)
Baker Hughes Incorporated is engaged in the oilfield services industry. The Company is a supplier of oilfield services, products, technology and systems used in the oil and natural gas industry around the world. The Company also provides industrial products and services for other businesses, including downstream chemicals, and process and pipeline services. It conducts its operations through its subsidiaries, affiliates, ventures and alliances. The Company has four geographical operating segments: North America, Latin America, Europe/Africa/Russia Caspian and Middle East/Asia Pacific. The Company also has an Industrial Services segment, which includes the downstream chemicals business and the process and pipeline services business. The Company’s oilfield products and services are of approximately two categories, Drilling and Evaluation or Completion and Production. The Company’s Industrial Services consists of its downstream chemicals and process, and pipeline services businesses.
