2003 Finance Charter: BHIBAKER HUGHES INCORPORATED
CHARTER OF THE
FINANCE COMMITTEE OF THE
BOARD OF DIRECTORS
The Board of Directors of Baker Hughes Incorporated (the "Company") has heretofore constituted and established a Finance Committee (the "Committee"), with the authority, responsibility and specific duties as described in this Charter. This document replaces and supersedes in its entirety any previous charter of the Committee.
The purpose of the Finance Committee is to review and monitor the financial structure of the Company to determine that it is consistent with the Company's requirements for growth and fiscally sound operation.
The Committee and Chairman of the Committee shall be elected annually by the Board of Directors and subject to removal pursuant to the terms of the Company's Bylaws. The Committee shall be comprised of not less than three or more than six of its non-employee members. All members of the Committee shall be independent, as that term is defined by the NYSE rules. The Committee may, if appropriate, delegate its authority to subcommittees.
The Committee shall be responsible for the following:
Review and approve for recommendation to the Board of Directors, if appropriate, public equity offerings to be undertaken by the Company and its subsidiaries and affiliates.
Review and approve for recommendation to the Board of Directors, if appropriate, specific public debt offerings and other financings or refinancings to be undertaken by the Company and its subsidiaries and affiliates.
Review and approve debt and other financings. The President and Chief Executive Officer has the authority to approve these types of transactions in an amount up to $50 million and the Committee shall approve such types of transactions over $50 million up to $250 million, individually or in a series of related transactions, including (without limitation) the following:
commercial paper issuances and/or facilities related thereto
extendable commercial note issuances and/or facilities related thereto
bank credit facilities
borrowings from banks and other private lenders
privately placed note issuances
operating and capital leases
issuances of preferred or common equity by subsidiaries of the Company in private offerings
off-balance sheet transactions, if any
issuances of warrants, options and convertible or exchangeable securities of the Company's securities in private offerings
letters of credit, bank guarantees, bid, performance or customs bonds or similar indemnity or surety arrangements issued on behalf of or for the benefit of the Company
loans to third parties for the benefit of the Company
guarantees that the Company or any of its subsidiaries issues supporting obligations of the Company, any of its subsidiaries or affiliates or third parties (in the case of third parties where such guarantee benefits the Company)
creation of specialty companies (entities)
Review the proposed annual operating plan, capital budget and long-range plan to address significant financial issues affecting the Company's ability to achieve its business objectives.
Review and approve for recommendation to the Board of Directors specific stock repurchase programs, equity or debt offerings, optional redemptions or other financial transactions to be undertaken by the Company and its subsidiaries and affiliates that the Committee deems appropriate that are not otherwise covered by the foregoing paragraphs.
Review the Company's activities with credit rating agencies.
Monitor on a periodic basis the Company's key financial ratios.
Review on a periodic basis the Company's policy governing approval levels for capital expenditures and the Company's financial plan to fund approved capital expenditures.
Review the Company's policy and controls with regard to derivatives, hedging transactions and foreign exchange exposure.
Review and approve, for recommendation to the Board of Directors, dividend policy and changes in the rate of dividend.
Review the Company's insurance programs on an annual basis.
Monitor the Company's exposure under outstanding letters of indemnity, letters of credit and corporate guaranties, and review and approve for recommendation to the Board of Directors, if appropriate, the Company's policies with regard thereto.
Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Governance Committee for approval who will then present to the Board of Directors for approval.
Perform such other oversight duties and responsibilities as may be assigned to the Committee, from time to time by the Board of Directors and/or the Chairman of the Board.
The Committee will meet at least two times per year as determined by the Board of Directors. Special meetings may be called by the Chairman of the Board or the Chairman of the Committee. All meetings of the Committee will be held pursuant to the Bylaws of the Company with regard to notice and waiver thereof, and written minutes of each meeting will be duly filed in the Company records. Reports of meetings of the Committee shall be made to the Board of Directors at its next regularly scheduled meeting following the Committee meeting accompanied by any recommendations to the Board of Directors approved by the Committee.