Baker Hughes 2007 Annual Report Download - page 63

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2007 Proxy Statement A-2
2. A director, who is a member of the Audit/Ethics Committee
may not, other than in his or her capacity as a member of
the Audit/Ethics Committee, the Board, or any other Board
committee, be an affiliated person of the Company or any
subsidiary thereof.
3. A member of the Audit/Ethics Committee may not simulta-
neously serve on the audit committees of more than two
other public companies in addition to the Company.
IV. Definitions
An “immediate family member” includes a person’s
spouse, parents, children, siblings, mothers and fathers-in-law,
sons and daughters-in-law, brothers and sisters-in-law, and
anyone (other than domestic employees) who shares such
person’s household. When considering the application of
the three year period referred to in each of paragraphs II.1
through II.5 above, the Company need not consider individuals
who are no longer immediate family members as a result
of legal separation or divorce, or those who have died or
become incapacitated.
The “Company” includes any subsidiary in a consolidated
group with the Company.
AUDIT/ETHICS COMMITTEE
FINANCIAL EXPERT QUALIFICATIONS
The Company believes that it is desirable that one or more
members of the Audit/Ethics Committee possess such qualities
and skills such that they qualify as an Audit Committee Finan-
cial Expert as defined by the Securities and Exchange Commis-
sion (“SEC”).
1. The SEC rules define an Audit Committee Financial Expert as
a director who has the following attributes:
(a) An understanding of generally accepted accounting
principles and financial statements;
(b) The ability to assess the general application of such
principles in connection with the accounting for esti-
mates, accruals and reserves;
(c) Experience preparing, auditing, analyzing or evaluating
financial statements that present a breadth and level of
complexity of accounting issues that are generally com-
parable to the breadth and complexity of issues that can
reasonably be expected to be raised by the registrant’s
financial statements, or experience actively supervising
one or more persons engaged in such activities;
(d) An understanding of internal controls and procedures
for financial reporting; and
(e) An understanding of audit committee functions.
2. Under SEC rules, a director must have acquired such attri-
butes through any one or more of the following:
(a) Education and experience as a principal financial officer,
principal accounting officer, controller, public accoun-
tant or auditor or experience in one or more positions
that involve the performance of similar functions;
(b) Experience actively supervising a principal financial
officer, principal accounting officer, controller,
public accountant, auditor or person performing
similar functions;
(c) Experience overseeing or assessing the performance
of companies or public accountants with respect to
the preparation, auditing or evaluation of financial
statements; or
(d) Other relevant experience.