Baker Hughes 2009 Annual Report Download - page 13

2009 Proxy Statement 3
PROPOSAL NO. 1
ELECTION OF DIRECTORS
On August 30, 2009, the Company entered into an Agree-
ment and Plan of Merger (the “Merger Agreement”), by and
among the Company, BJ Services Company, a Delaware corpo-
ration (“BJ Services”), and BSA Acquisition LLC, a Delaware
limited liability company and a wholly owned subsidiary of the
Company (“Merger Sub”), pursuant to which BJ Services will be
merged with and into Merger Sub, with Merger Sub surviving
the merger as a wholly owned subsidiary of the Company (the
“Merger”). The Merger Agreement and the Merger have been
approved by the Board of Directors of both the Company and
BJ Services. In the Merger, each issued and outstanding share
of BJ Services’ common stock will be converted into the right
to receive (i) 0.40035 shares of the Company’s common stock,
par value $1.00 per share, and (ii) $2.69 per share in cash.
For more information regarding the Merger, you are urged
to read the joint proxy statement/prospectus dated February 12,
2010, which the Company and BJ Services filed with the SEC
on February 16, 2010 and was first mailed to Company stock-
holders and BJ Services stockholders on or about February 16,
2010. You are urged to read the joint proxy statement/pro-
spectus and any other relevant materials filed by the Company
or BJ Services because they contain important information
about the Company, BJ Services and the Merger. The joint
proxy statement/prospectus and other relevant materials and
any other documents filed by the Company or BJ Services with
the SEC, may be obtained free of charge from the SEC’s web-
site at www.sec.gov. In addition, the documents filed with the
SEC by the Company may be obtained free of charge from
the Company’s website at www.bakerhughes.com.
Completion of the Merger is expected to occur on
March 19, 2010, the date the Company and BJ Services
have scheduled special meetings of stockholders, subject to
adjournment or postponement, where the stockholders of
each entity will vote whether to approve the Merger. However,
the completion of the Merger is subject to customary closing
conditions, and although the Company expects the Merger to
be completed on March 19, 2010, as anticipated, the Merger
may not be completed prior to the Company’s Annual Meeting
on April 22, 2010.
As of the date of this proxy statement, the Company’s
Board of Directors consists of eleven directors, ten of whom
are independent non-management directors. The Merger
Agreement includes an agreement that two members of the
BJ Services Board of Directors be added to the Baker Hughes
Board of Directors following completion of the Merger.
J.W. Stewart and James L. Payne have been designated to
become members of the Baker Hughes Board of Directors
upon closing of the Merger. Therefore, if the Merger is com-
pleted prior to the Annual Meeting, a total of thirteen nomi-
nees will be voted upon at the Annual Meeting for election
to the Board of Directors: eleven of the nominees will have
served as directors since the last annual meeting and the
remaining two will have been appointed to the Company
Board of Directors upon closing of the Merger. If the Merger
is not completed prior to the Annual Meeting, only the eleven
incumbent directors will be voted upon for election to the
Company Board of Directors.
In analyzing director nominations and director vacancies
the Governance Committee strives to recommend candidates
for director positions who will create a collective membership
on the Board with varied experience and perspective and who
maintain a Board that reflects diversity, including but not lim-
ited to gender, ethnicity, background, country of citizenship
and experience. The Governance Committee strives to recom-
mend candidates who demonstrate leadership and significant
experience in a specific area of endeavor, comprehend the role
of a public company director, exemplify relevant expertise,
experience and a substantive understanding of domestic con-
siderations and geopolitics, especially those pertaining to the
service sector of the oil and gas and energy related industries.
When analyzing whether directors and nominees have
the experience, qualifications, attributes and skills, taken as a
whole, to enable the Board of Directors to satisfy its oversight
responsibilities effectively in light of the Company’s business
and structure, the Governance Committee and the Board of
Directors focus on the information as summarized in each
of the Directors’ individual biographies set forth on pages 5
through 7. In particular, the Board considered Mr. Deaton’s
senior executive experience for over 12 years in the oilfield
services industry combined with extensive knowledge in his
successful energy business career for over 30 years as well as
active participation in energy-related professional organizations.
His knowledge, expertise and management leadership regard-
ing the issues affecting our business and the Company have
been invaluable to the Board of Directors in overseeing the
business and affairs of our Company. Similarly the Board has
considered the extensive backgrounds of each of the indepen-
dent non-management directors, including Mr. Brady’s experi-
ence and leadership of public companies in the energy services
sector and manufacturing sector together with his financial
expertise; Mr. Cazalot’s role as chief executive and director of
a publicly traded energy company as well as his 37 successful
years of experience in the global energy business; Ambassador
Djerejian’s extensive international and governmental experience,
particularly his more than 30 years in the United States Foreign
Service, including service as the U.S. Ambassador to two coun-
tries, as well as his role as director of two other public com-
panies in the energy sector; Mr. Fernandes’ leadership roles
in several public companies in the energy and manufacturing
sectors, including his service as a director of other public com-
panies and his extensive financial expertise; Ms. Gargalli’s lead-
ership and consulting experience, extensive public board service