Baker Hughes 2009 Annual Report Download - page 58

48 Baker Hughes Incorporated
average affirmative vote for directors has been close to 90%
of the shares voted through the plurality voting process with
no director receiving less than 84% of the votes cast. As a
result, the adoption of a majority voting standard would not
have affected the outcome of the elections in any of these
years. Not only have our Directors historically received high
levels of support, but, we also maintain a comprehensive
director nomination and election process. The nomination
and election process has been instrumental in the construction
of a Board that is comprised of highly qualified directors from
diverse backgrounds. In addition, other than the Chairman,
all Directors are independent as defined under the New York
Stock Exchange listing standards. Because our stockholders
have a history of electing highly qualified and independent
directors using a plurality voting system, a change in the direc-
tor election process is neither necessary nor appropriate in
order to enhance the Company’s corporate governance.
In evaluating this proposal, the Board has determined that
the Director Resignation Policy incorporated in the Company’s
Bylaws and our Corporate Governance Guidelines allow the
Board to consider and address stockholder concerns without
creating undue uncertainty. In contrast, the stockholder pro-
posal does not address what would occur if a candidate fails
to receive the requisite majority vote. Under Delaware law
and Baker Hughes’ Bylaws, the possible scenarios include an
incumbent director remaining in office until a successor is
elected and qualified, the Board of Directors electing a director
to fill a vacancy, or the position remaining vacant. All of these
alternatives, in the view of Baker Hughes’ Board of Directors
are less desirable than the current system which allows for
election of directors by plurality vote subject to the Director
Resignation Policy.
We are committed to strong corporate governance and it
is our fiduciary duty to act in the best interests of our stock-
holders. We have consistently and continuously demonstrated
our commitment to good governance, including the adoption
of the Director Resignation Policy and taking the action neces-
sary to declassify the Board. Notwithstanding these prior actions,
we will continue to monitor the majority vote issue and will
take additional necessary steps in the future consistent with
our commitment to act in the best interests of our stockhold-
ers. The proposal at issue would not further enhance the abil-
ity of stockholders to impact the outcome of director elections,
and, for that reason and the reasons presented above, we
do not believe that the proposal is in the best interests of the
Company or its stockholders.
For the foregoing reasons, the Board of Directors
recommends a vote AGAINST the approval of Stockholder
Proposal No. 1 regarding a Director election majority
vote standard.
ANNUAL REPORT
The 2009 Annual Report on Form 10-K of the Company
(the “Annual Report”), which includes audited financial state-
ments for the fiscal year ended December 31, 2009, accom-
panies this Proxy Statement only if you have requested that
a copy of this Proxy Statement be mailed to you. The Annual
Report also is available electronically by following the instruc-
tions in the E-Proxy Notice, as described in the “Proxy State-
ment – Information About the Notice of Internet Availability of
Proxy Materials” section of this Proxy Statement. However, the
Annual Report is not part of the proxy soliciting information.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement is incorporated
by reference into any other filing by Baker Hughes under the
Securities Act of 1933, as amended, or the Exchange Act, the
sections of this Proxy Statement entitled “Compensation Com-
mittee Report” and “Audit/Ethics Committee Report” (to
the extent permitted by the rules of the SEC) as well as the
annexes to this Proxy Statement, will not be deemed incor-
porated unless specifically provided otherwise in such filing.
Information contained on or connected to our website is
not incorporated by reference into this Proxy Statement and
should not be considered part of this Proxy Statement or any
other filing that we make with the SEC.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the
2011 Annual Meeting must be received by the Company by
November 12, 2010 to be properly brought before the 2011
Annual Meeting and to be considered for inclusion in the
Proxy Statement and form of proxy relating to that meeting.
Such proposals should be mailed to the Company’s Corporate
Secretary, c/o Baker Hughes Incorporated, 2929 Allen Parkway,
Suite 2100, Houston, Texas 77019. Nominations of directors
by stockholders must be received by the Chairman of the
Governance Committee of the Company’s Board of Directors,
P.O. Box 4740, Houston, Texas 77210-4740 or the Corporate
Secretary, c/o Baker Hughes Incorporated, 2929 Allen Parkway,
Suite 2100, Houston, Texas 77019 between October 13, 2010
and November 12, 2010 to be properly nominated before the
2011 Annual Meeting, although the Company is not required
to include such nominees in its Proxy Statement.
OTHER MATTERS
The Board of Directors knows of no other matter to be
presented at the Annual Meeting. If any additional matter
should be presented properly, it is intended that the enclosed
proxy will be voted in accordance with the discretion of the
persons named in the proxy.