Baker Hughes 2009 Annual Report Download - page 60

50 Baker Hughes Incorporated
Independence – The Board will be comprised of a major-
ity of directors who qualify as independent directors under the
listing standards of the New York Stock Exchange (“NYSE”),
as described in Exhibit C, “Policy for Director Independence,
Audit/Ethics Committee Members and Audit Committee Finan-
cial Expert”. Annually, the Board will review the relationship
that each director has with the Company to determine that
the director has no material relationship with the Company,
its affiliates or any member of the senior management of the
Company, subject to additional qualifications prescribed under
the listing standards of the New York Stock Exchange. The
Company will not make any personal loans or extensions of
credit to directors or executive officers.
Size and Term of the Board – In accordance with the
Company’s Bylaws, the Board determines the number of
directors on the Board, which currently will consist of not
more than 11 directors. In accordance with the Company’s
Restated Certificate of Incorporation, at each Annual Meeting
of Stockholders, directors shall be elected for a term of one
year ending on the date of the Annual Meeting of Stockholders
following the annual meeting at which the directors were
elected and will serve until their successors are elected and
qualified or until his or her earlier death, retirement, resig-
nation or removal. Stockholders may propose nominees for
consideration by the Governance Committee, as described in
Exhibit D, “Policy and Submission Procedures for Stockholder
Recommended Director Candidates”, by submitting within the
prescribed time period the name and supporting information
to: Chairman, Governance Committee of the Board of Directors,
P.O. Box 4740, Houston, Texas 77210-4740 or to the Corporate
Secretary, c/o Baker Hughes Incorporated 2929 Allen Parkway,
Suite 2100, Houston, Texas 77019-2118 to be properly nomi-
nated before the next Annual Meeting of Stockholders, although
the Company is not required to include such nominees in its
proxy statement. Between such annual meetings, the Board
may elect directors to serve until the next annual meeting.
Voting for Directors – Any nominee for director in an
uncontested election who receives a “withhold” vote repre-
senting a majority of the votes cast for his or her election will
be required to submit a letter of resignation to the Governance
Committee of the Board of Directors. The Governance Com-
mittee will consider all of the relevant facts and circumstances
and recommend to the Board of Directors whether or not the
resignation should be accepted. For the purposes of this Sec-
tion, an “uncontested election” shall mean an election in
which the number of nominees as of the record date for the
meeting at which directors are to be elected does not exceed
the number of directors to be elected at such meeting.
Director Orientation and Continuing Education – The
Governance Committee will periodically review and recom-
mend to the Board a director orientation program that includes
an initial and continuing orientations providing the director
with comprehensive information about the Company’s busi-
ness, one-on-one meetings with senior management and other
officers of the Company, an overview of the Director Reference
Manual and tours of the Company’s operations. The directors
will be provided with continuing education materials covering
upcoming seminars and conferences.
Independent Advisors – The Board and the Committees
of the Board have the right at any time to retain independent
outside financial, legal or other advisors.
Executive Sessions – The Board will meet in executive
session with the CEO after each Board meeting. In addition,
the independent directors of the Company will meet in execu-
tive session following each regularly scheduled Board meeting
without any inside director or Company executives present.
These executive session discussions may include any topic rele-
vant to the business affairs of the Company as determined by
the independent directors.
Lead Director – The Governance Committee will review
and recommend to the Board a director to serve as Lead Direc-
tor during executive sessions of the independent members of
the Board. The Lead Director will be elected by the independent
members of the Board; preside at all meeting of the Board of
Directors at which the Chairman is not present, including exec-
utive sessions of independent directors; serve as liaison between
the Chairman and the independent directors; have the author-
ity to call meetings of the independent directors; consult with
the Chairman on agendas for Board meeting and other mat-
ters pertinent to the Company and the Board.
Stockholder Communications – In order to provide
the stockholders of the Company and other interested parties
with a direct and open line of communication to the Compa-
ny’s Board, procedures have been established, as described
in Exhibit E, “Stockholder Communications with the Board
of Directors”.
Termination of Independent Director Status – In accor-
dance with the Company’s Bylaws, an independent director
shall not stand for reelection as a director of the Company at
the Annual Meeting following any of the occurrences set forth
below. The following provisions may be waived by the Board
(excluding the affected director) if the Board determines that
such waiver would be in the best interest of the Company and
its stockholders.
Retirement – The director’s 72nd birthday.
Attendance – Any fiscal year in which a director fails to
attend at least 66% of the meetings of the
Board and any Committees of the Board on
which the director serves.
Termination of Inside Director Status – In accordance
with the Company’s Bylaws, an inside director must resign
from the Board (i) at the time of any diminution of his or her
responsibilities as an officer; (ii) at the time of termination of
employment by the Company for any reason; or (iii) on the
director’s 72nd birthday.
Conflict of Interest – The Board expects each director, as
well as senior management and employees, to act ethically at
all times. Independent directors may not serve on more than
four other boards of publicly listed companies in addition to
the Company’s Board of Directors. No officer of the Company
may serve on a board of any company having a present or
retired employee on the company’s Board. Additionally, officers
of the Company may not serve as directors of any other pub-
licly-held companies without the approval of the Governance
Committee. The CEO may serve on no more than three boards
of publicly-held companies, while other officers may serve on