Baker Hughes 2009 Annual Report Download - page 142

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68 Baker Hughes Incorporated
Director Compensation Deferral Plan
The Baker Hughes Incorporated Director Compensation
Deferral Plan, as amended and restated effective July 24, 2002
(the “Deferral Plan”), is intended to provide a means for mem-
bers of our Board of Directors to defer compensation other-
wise payable and provide flexibility with respect to our
compensation policies. Under the provisions of the Deferral
Plan, directors may elect to defer income with respect to
each calendar year. The compensation deferrals may be stock
option-related deferrals or cash-based deferrals. If a director
elects a stock option-related deferral, on the last day of each
calendar quarter he or she will be granted a nonqualified stock
option. The number of shares subject to the stock option is
calculated by multiplying the amount of the deferred compen-
sation that otherwise would have been paid to the director
during the quarter by 4.4 and then dividing by the fair market
value of our common stock on the last day of the quarter.
The per share exercise price of the option will be the fair mar-
ket value of a share of our common stock on the date the
option is granted. Stock options granted under the Deferral
Plan vest on the first anniversary of the date of grant and must
be exercised within ten years of the date of grant. If a director’s
directorship terminates for any reason, any options outstanding
will expire three years after the termination of the directorship.
The maximum aggregate number of shares of our common
stock that may be issued under the Deferral Plan is 0.5 million.
As of December 31, 2009, options covering 3,313 shares of
our common stock were outstanding under the Deferral Plan,
there were no shares exercised during fiscal 2009 and approxi-
mately 0.5 million shares remained available for future options.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information for this item is set forth in the sections entitled
“Corporate Governance-Director Independence” and “Certain
Relationships and Related Transactions” in our Proxy State-
ment, which sections are incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information concerning principal accounting fees and ser-
vices is set forth in the section entitled “Fees Paid to Deloitte &
Touche LLP” in our Proxy Statement, which section is incorpo-
rated herein by reference.