Baker Hughes 2010 Annual Report Download - page 63

2 0 11 P r o x y S t a t e m e n t 51
EXHIBIT F
BAKER HUGHES INCORPORATED
PROCEDURES FOR THE RECEIPT, RETENTION
AND TREATMENT OF COMPLAINTS
(As Amended October 22, 2009)
Sarbanes-Oxley Act Section 301 Requirements
The Sarbanes-Oxley Act of 2002 (“SOX”) Section 301
requires that each audit committee establish procedures for
the receipt, retention and treatment of complaints received by
the Company regarding accounting, internal accounting con-
trols or auditing matters; and confidential, anonymous sub-
missions by employees of the Company of concerns regarding
questionable accounting or auditing matters.
Guidelines for Reporting
Complaints or concerns regarding accounting, internal
accounting controls or auditing matters may be submitted by
employees and/or third parties to the Business Help Line or the
Chief Compliance Officer (“CCO”). Concerns received by the
Business Help Line, which accepts anonymous submissions, are
forwarded to the CCO. All complaints received by the CCO are
reviewed and validated and a list of all such items will be pro-
vided to the Chairman of the Audit/Ethics Committee. The
CCO has an affirmative duty to report all issues for which the
CCO has credible evidence of a material or potential violation
of any applicable securities laws, fiduciary duty, or similar vio-
lation to the Audit/Ethics Committee (“AEC”) in a timely man-
ner. The CCO may bring any issue to the attention of the AEC
if, in the CCO’s opinion, it is necessary and appropriate to
inform the AEC.
When the CCO brings an issue to the AEC, the AEC
and the CCO will collaboratively discuss the issue and agree
to a course of action which may include an internal investiga-
tion involving one or more of the CCO, Corporate Security,
Human Resources department, Operations, Internal Audit
and outside counsel.
The CCO will maintain appropriate records for all issues
presented to the AEC and provide updates. The CCO will
retain issue related documentation in accordance with the
Company’s record retention policy.
In the event that a complaint is received concerning the
CCO, the complaint will be sent directly to the Chairman of
the AEC. The Chairman of the AEC will decide the appropriate
course of action.
Third party reporting procedures are posted on the Com-
pany’s internet website in the Investor Relations-Compliance
Section. The reporting protocol for employees is posted on
the intranet within the Interchange-Legal Compliance site.
In addition to the websites, the Company has a Business
Help Line brochure.
No employee shall suffer retaliation in any form for
reporting, in good faith, suspected violations of the Business
Code of Conduct.
ANNEX B
BAKER HUGHES INCORPORATED
CHARTER OF THE AUDIT/ETHICS COMMITTEE
OF THE BOARD OF DIRECTORS
(As Amended and Restated October 21, 2009)
The Board of Directors of Baker Hughes Incorporated
(the “Company”) has heretofore constituted and established
an Audit/Ethics Committee (the “Committee”) with authority,
responsibility and specific duties as described in this Charter.
It is intended that this Charter and the composition of the
Committee comply with the rules of the New York Stock
Exchange (the “NYSE”). This document replaces and super-
sedes in its entirety the previous Charter of the Committee
adopted by the Board of Directors of the Company.
Purpose
The Committee’s purpose is to assist the Board of Directors
with oversight of: (i) the integrity of the Company’s financial
statements and financial reporting system, (ii) the Company’s
compliance with legal and regulatory requirements, (iii) the
independent auditor’s qualifications, independence and perfor-
mance and (iv) the performance of the Company’s internal
audit function. The Committee shall also prepare the report of
the Committee to be included in the Company’s annual proxy
statement, carry out the duties and responsibilities set forth in
this Charter and conduct an annual self-evaluation.
Composition
The Committee and Chairman of the Committee shall
be elected annually by the Board of Directors and are subject
to removal pursuant to the terms of the Company’s Bylaws.
The Committee shall be comprised of not less than three non-
employee Directors who are (i) independent (as defined by
Section 10A(m)(3) of the Securities Exchange Act of 1934
and the rules and regulations thereunder and the NYSE) and
(ii) financially literate (as interpreted by the Board of Directors
in its business judgment). Such Committee members may not
simultaneously serve on the audit committee of more than three
public companies. At least one member of the Committee shall
be an “audit committee financial expert,” as defined by the Secu-
rities and Exchange Commission (“SEC”). The audit committee
financial expert must have: (i) an understanding of GAAP and
financial statements; (ii) experience in the (a) preparation, audit-
ing, analyzing or evaluating of financial statements of generally
comparable issuers or supervising one or more persons engaged
in such activities and (b) applying GAAP principles in connection
with the accounting for estimates, accruals and reserves; (iii) an
understanding of internal control over financial reporting; and
(iv) an understanding of audit committee functions. The Commit-
tee may, if appropriate, delegate its authority to subcommittees.
If a member of the Committee ceases to be independent
for reasons outside the member’s reasonable control, his or
her membership on the committee may, if so permitted under
then applicable NYSE rules, continue until the earlier of the
Company’s next annual meeting of stockholders or one year
from the occurrence of the event that caused the failure to
qualify as independent.