Exhibit 10.6

SECOND AMENDED AND RESTATED
STOCK MATCHING AGREEMENT

     This Second Amended and Restated Stock Matching Agreement (this
“Agreement”) is made and entered into this 27th day of October, 2004, by and
between Baker Hughes Incorporated, a Delaware corporation (the “Company”), and
James Roderick Clark (the “Employee”), regarding the award of Matched Shares
(defined below) to the Employee pursuant to the Long Term Incentive Plan of
Baker Hughes Incorporated (the “Plan”), and further subject to the terms and
conditions set forth below.

W I T N E S S E T H:

     WHEREAS, the Company and the Employee previously entered into that certain
Stock Matching Agreement dated March 1, 2002, as amended on March 6, 2002, which
was Amended and Restated on December 3, 2003 (as amended and restated, the
“Original Agreement”);

     WHEREAS, the Company and the Employee recognize that there will no longer
be a “substantial risk of forfeiture” under this Agreement for federal income
tax purposes on and after March 7, 2006, when the Employee is eligible to
“retire” for purposes of this Agreement;

     WHEREAS, the Company and the Employee desire to make certain changes to the
Original Agreement in order to provide for Employee to sell Matched Shares (as
defined below) to pay tax liabilities in connection with income being attributed
to Employee under this Agreement and to allow Employee to sell Common Stock of
the Company previously obtained by Employee in the open market in connection
with the Original Agreement; and

     WHEREAS, the Company and the Employee desire to amend and restate the
Original Agreement in its entirety and, unless otherwise set forth herein, all
terms and provisions hereof are effective as of the date first written above;

     NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein, the parties hereto hereby agree to amend and
restate the Original Agreement and agree as follows:

         1. Award of Matched Shares. The Company hereby issues, subject to all
the terms and conditions in this Agreement, 25,000 restricted shares (the
“Restricted Stock”) of the Company’s common stock, $1.00 par value per share
(“Common Stock”), which represents one share for each share of Common Stock up
to, but not exceeding, 25,000 shares of Common Stock owned, and held of record,
(x) by the Employee and (y) for the benefit of the Employee in an account by
(i) a tax-qualified plan maintained by the Company, a Subsidiary or a former
employer of the Employee, and/or (ii) an individual retirement account or
annuity under Code Section 408 or 408A (with such shares under this clause
(y) deemed to be owned by the Employee for purposes of this Agreement) at the
close of business on September 2, 2002. Such shares of Restricted Stock shall be
referred to herein as the “Matched Shares.”

         2. Substantial Risk of Forfeiture. The Matched Shares that are granted
hereby shall be subject to a substantial risk of forfeiture (“Forfeiture
Restrictions”) until

 

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the earlier to occur of (a) March 7, 2006, or (b) a “Transferability Event” (as
defined in Section 3). In the event of the occurrence of a Forfeiture Event (as
defined in Section 3) prior to the lapse of the Forfeiture Restrictions, all the
Matched Shares shall be forfeited to the Company.

          3. Transfer Restrictions. Except as specified in Section 3(III), the
Matched Shares granted hereby may not be sold, assigned, pledged, exchanged,
hypothecated or otherwise transferred, encumbered or disposed of prior to the
occurrence of a Transferability Event. Any such attempted sale, assignment,
pledge, exchange, hypothecation, transfer, encumbrance or disposition in
violation of this Agreement shall be void and the Company shall not be bound
thereby. If a Forfeiture Event occurs before the occurrence of a Transferability
Event, the Matched Shares shall be forfeited to the Company.

(I)   Transferability Events. For purposes of this Agreement, the following are
Transferability Events:

(a)   The Retirement of the Employee;   (b)   The termination of the Employee’s
employment by the Company without Non-CIC Cause;   (c)   The occurrence of a
Change in Control;   (d)   The termination of the Employee’s employment:

(i)   by the Company without CIC Cause prior to a Change in Control (whether or
not a Change in Control ever occurs) if such termination was at the request or
direction of a person who has entered into an agreement with the Company, the
consummation of which would constitute a Change in Control;   (ii)   by the
Employee for Good Reason prior to a Change in Control (whether or not a Change
in Control ever occurs) if the circumstance or event which constitutes Good
Reason occurs at the request or direction of the Person described in the
foregoing clause (i); or   (iii)   by the Company without CIC Cause or by the
employee for Good Reason if such termination or the circumstance or event which
constitutes Good Reason is otherwise in connection with, or in anticipation of,
a Change in Control (whether or not a Change in Control ever occurs; or

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(e)   The Employee’s death or permanent disability (as determined by the
Committee in its sole discretion).

(II)   Forfeiture Event: For purposes of this Agreement, a Forfeiture Event
means the termination of employment of the Employee other than as set forth in
Section 3(I) or due to Non-CIC Cause.   (III)   Tax Trigger Event: Upon the
lapse of the Forfeiture Restrictions under Section 2 (a “Tax Trigger Event”)
with respect to the Matched Shares granted to Employee (not including dividends
paid on the Matched Shares), the Employee shall be allowed to satisfy the
Company’s tax withholding obligations by having the Company hold back a portion
of the Matched Shares with a fair market value equal to the minimum statutory
withholding obligations of the Company under applicable laws at the time of the
Tax Trigger Event for the amount Employee is required to recognize as income in
connection with the Tax Trigger Event.

         4. Forfeiture of Matched Shares. Upon the forfeiture of Matched Shares
pursuant to Section 2 of Section 3 of this Agreement the Employee shall forfeit,
for all purposes of this Agreement and without consideration, any and all rights
and have no further claim against or with respect to any such forfeited Matched
Shares or against the Company for any such forfeited Matched Shares.

         5. Stock Certificates. The Company will issue a stock certificate for
the Matched Shares in the name of the Employee; provided that the Secretary of
the Company will hold the stock certificate(s) representing such shares and any
additional shares issued as a result of a stock dividend or stock split (as
provided in Section 9) until the occurrence of a Vesting Event or Forfeiture
Event.

          6. Shareholder Status. The Employee will have (i) the right to receive
all cash dividends on the Matched Shares, subject to forfeiture of such shares
under Sections 2 and 3, and (ii) the right to vote such shares, subject to
forfeiture of such shares under Sections 2 and 3. If the Matched Shares are
forfeited pursuant to Section 2 or 3, the Employee will at the same time forfeit
the Employee’s right to vote such shares and to receive future cash dividends
and any other distributions made with respect to such shares. Any distributions
made with respect to the Matched Shares (other than cash dividends) shall be
deemed to be a portion of the Matched Shares and held by the Secretary of the
Company subject to the terms and conditions of this Agreement.

          7. Ownership by the Employee. The Employee shall have no obligations
to continue to own any minimum amount of Common Stock under this Agreement.
However, this will not relieve the Employee of any obligation to own Common
Stock under other agreements with the Company or the policies of the Company
applicable to its senior executives.

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          8. Limitation of Award. The award of shares of Common Stock to the
Employee pursuant to this Agreement is being made only with respect to the
shares owned on September 2, 2002. No future award of shares is being authorized
pursuant hereto and may only be made by the Committee in its sole discretion at
such time in the future. No increase in shares subsequent to September 2, 2002
shall create a right to an increase in the number of Matched Shares.

          9. Adjustments. If the Company should declare a stock dividend or
authorize a split of shares of the Common Stock of the Company, the Matched
Shares shall reflect and to take into account such stock dividend or stock
split, as the case may be. The additional shares to be issued as a result of
such stock dividend or stock split shall be deemed to be a portion of the
Matched Shares and subject to the terms and conditions of this Agreement.

          10. Relationship to the Plan; Definitions. This award of Matched
Shares is granted under the Plan and is subject to all of the terms, conditions
and provisions of the Plan and administrative interpretations thereunder, if
any, which have been adopted by the Committee thereunder and are in effect on
the date hereof. Capitalized terms that are not defined in this Agreement shall
have the same meanings ascribed to them under the Plan. For purposes of this
Agreement:

(a)   “CIC Cause” means Cause as defined in the Plan.   (b)   “Retirement” means
the termination of employment after attaining age 55 with not less than 5 years
of continuous employment since the Employment Date with the Company; provided,
however, that such termination is not due to CIC Cause or Non-CIC Cause.   (c)  
“Non-CIC Cause” means fraud, theft, embezzlement committed against the Company
or an Affiliate or a customer of the Company or an Affiliate, or conflict of
interest, unethical conduct, dishonesty affecting the assets, properties or
businesses of the Company or any of its Affiliates, willful misconduct, or
continued material dereliction of duties.

          11. Withholding. To the extent the issuance of the Matched Shares
under this Agreement results in taxable income to the Employee, the Company is
authorized to withhold from any remuneration payable to the Employee any tax
required to be withheld by reason of such taxable income.

          12. Entire Agreement. This Agreement is intended by the parties hereto
to be the final expression of their Agreement with respect to the subject matter
hereof and is the complete and exclusive statement thereof notwithstanding any
prior representation or statements to the contrary. This Agreement hereby
supercedes the Original Agreement.

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This Agreement may be modified only by written instrument signed by each of the
parties hereto.

          13. Headings and Sections. The headings contained in this Agreement
are for reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement. All references to sections in this Agreement
shall be to sections of this Agreement unless otherwise indicated.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

            BAKER HUGHES INCORPORATED         BY   /s/ Chad C. Deaton       Chad
C. Deaton        Chairman and Chief Executive Officer 

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Acknowledgment, Acceptance and Consent by the Employee

     The undersigned Employee, James Roderick Clark, hereby agrees to, and
accepts, the terms and provisions of the foregoing Second Amended and Restated
Stock Matching Agreement, subject to the terms and provisions of the Plan and
administrative interpretations thereof referred to above. The undersigned
further hereby acknowledges that he has received a copy of the Long Term
Incentive Plan of Baker Hughes Incorporated and that he has been advised by the
Company to consult with and rely upon only his own tax, legal and financial
advisors regarding the consequences and risks of this award.

     

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Date
  James Roderick Clark

  10893 Lake Forest Drive

  Conroe, Texas 77384

Consent of Spouse of the Employee

     The undersigned spouse of the Employee has read and hereby approves the
terms and conditions of the foregoing Second Amended and Restated Stock Matching
Agreement and the Plan. In consideration of the Company’s awarding the Employee
the Matched Shares, as set forth in the Agreement, the undersigned hereby agrees
and consents to be irrevocably bound by the terms and conditions of the
Agreement and the Plan and further agrees that any community property interest
shall be similarly bound. The undersigned hereby appoints the undersigned’s
spouse as attorney-in-fact for the undersigned with respect to any amendment or
exercise of rights under the Agreement and the Plan.

     
 
 

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  Spouse of the Employee