BAKER HUGHES INCORPORATED
PERFORMANCE UNIT AWARD AGREEMENT

AWARD OF PERFORMANCE UNITS
PAYABLE IN CASH
The Compensation Committee (the “Committee”) of the Board of Directors of Baker
Hughes Incorporated, a Delaware corporation (the “Company”), pursuant to the
Baker Hughes Incorporated 2002 Director & Officer Long-Term Incentive Plan (the
“Plan”), hereby awards to you, the above named Participant, effective as of the
Grant Date set forth above (the “Grant Date”), that number of Performance Units
set forth above (each, a “Performance Unit”, and collectively, the “Performance
Units”), on the terms and conditions set forth in this Performance Unit Award
Agreement (this “Agreement”).
Each Performance Unit provides you an opportunity to earn a cash payment based
upon the achievement of certain performance goals established by the Committee
(the “Performance Goals”) for the three-year period beginning January 1 of the
year of the Grant Date and ending December 31 of the year containing the third
anniversary of the Grant Date (the “Performance Period”). The Performance Goals
and the formulas for determining the amounts payable under this Agreement
established by the Compensation Committee are available for your review on the
Baker Hughes Direct website at www.bakerhughesdirect.com. The Committee may not
increase the amount payable under this Agreement.
If the Performance Goals are not achieved at a minimum level of performance and
a Change in Control of the Company has not occurred on or before the last day of
the Performance Period, then the award pursuant to this Agreement will lapse and
be forfeited as of the end of the Performance Period.
The Committee’s determination of whether the Performance Goals applicable to
this Agreement are achieved will be binding upon all persons.
Any amount payable to you pursuant to this Agreement will be paid to you by the
Employer by March 15, after the end of the Performance Period (the “Scheduled
Payment Date”), unless otherwise provided under the attached Terms and
Conditions of Performance Unit Award Agreements (the “Terms and Conditions”).
Such payment will be made to you in exchange for the Performance Units and
thereafter you will have no further rights with respect to such Performance
Units or this Agreement.
If a Change in Control of the Company occurs or your employment with the Company
and Affiliates terminates (a “Termination of Employment”) on or before the last
day of the Performance Period, your rights to the Performance Units and a
payment under this Agreement will be determined as provided in the Terms and
Conditions.

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The Performance Units that are awarded hereby to you will be subject to the
prohibitions and restrictions set forth herein with respect to the sale or other
disposition of such Performance Units and the obligation to forfeit and
surrender such Performance Units.
The Performance Units and your rights under this Agreement may not be sold,
assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
or disposed of (other than by will or the applicable laws of descent and
distribution). Any such attempted sale, assignment, pledge, exchange,
hypothecation, transfer, encumbrance or disposition in violation of this
Agreement will be void and the Company Group will not be bound thereby.
Capitalized terms that are not defined herein will have the meaning ascribed to
such terms in the Plan or the Terms and Conditions.
In accepting the award of Performance Units set forth in this Agreement you
accept and agree to be bound by all the terms and conditions of the Plan, this
Agreement and the Terms and Conditions. The shares of Common Stock (the
“shares”) that may be issued under this Plan are registered with the Securities
and Exchange Commission (“SEC”) under a Registration Statement on Form S-8.  A
Prospectus describing the Plan and the shares and the Terms and Conditions can
be found on the Baker Hughes Direct website at www.bakerhughesdirect.com. You
may obtain a copy of the Plan Prospectus by requesting it from the Company.

BAKER HUGHES INCORPORATED

                            
Martin S. Craighead
Chairman and Chief Executive Officer

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BAKER HUGHES INCORPORATED
TERMS AND CONDITIONS
OF
PERFORMANCE UNIT AWARD AGREEMENTS

These Terms and Conditions are applicable to a performance unit granted pursuant
to the Baker Hughes Incorporated 2002 Director & Officer Long-Term Incentive
Plan (the “Plan”) and are incorporated as part of the Performance Unit Agreement
setting forth the terms of such performance unit (the “Agreement”).
1.
CHANGE IN CONTROL/TERMINATION OF EMPLOYMENT. The following provisions will apply
in the event a Change in Control of the Company occurs, or your employment with
the Company and all Affiliates (collectively, the “Company Group”) terminates (a
“Termination of Employment”), before the last day of the Performance Period (as
that term is defined in the Performance Unit Agreement awarded to you (the
“Agreement”)).

1.1    Termination Generally. If you incur a Termination of Employment on or
before the last day of the Performance Period for any reason other than one of
the reasons described in Sections 1.2 through 1.5 below, all of your rights in
the Agreement, including all rights to the Performance Units granted to you,
will lapse and be completely forfeited on the date your employment terminates.
1.2    Change in Control. If a Change in Control of the Company occurs on or
before the last day of the Performance Period and you do not incur a Termination
of Employment before the date the Change in Control of the Company occurs, then
the Company will pay to you in cash an amount determined under the following
formula in lieu of any other amounts under the Agreement:
(1) multiplied by (2) multiplied by (3) divided by (4)
where (1) is $100, (2) is the number of Performance Units that were awarded to
you under the Agreement, (3) is the number of days from (and including) the
first day of the Performance Period to (and including) the date the Change in
Control of the Company occurs, and (4) is the number of days during the
Performance Period. Any amount payable to you pursuant to this Section 1.2 will
be paid by the Company to you (a) ten (10) business days after the date the
Change in Control of the Company occurs if the Change in Control of the Company
qualifies as a change in the ownership or effective control of the corporation,
or in the ownership of a substantial portion of the assets of the corporation,
within the meaning of section 409A of the Internal Revenue Code of 1986, as
amended and the Department of Treasury rules and regulations issued thereunder,
or (b) on the Scheduled Payment Date if the Change in Control of the Company
does not so qualify. Such payment will be made to you in exchange for the
Performance Units and thereafter you will have no further rights with respect to
such Performance Units or the Agreement and the Company

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Group will have no further obligations to you pursuant to the Performance Units
or the Agreement.
1.3    Disability. Notwithstanding any other provision of the Agreement or these
Terms and Conditions to the contrary, if you become permanently disabled before
the last day of the Performance Period and while in the active employ of one or
more members of the Company Group, then the number of Performance Units issued
to you under the Agreement will automatically be reduced (without action by you
and/or the Company) on the date of your Termination of Employment to that number
of Performance Units determined under the following formula (the “Disability
Adjusted Performance Units”):
(1) multiplied by (2) divided by (3)
where (1) is the number of Performance Units that were awarded to you under the
Agreement, (2) is the number of days from (and including) the first day of the
Performance Period to (and including) the day you become permanently disabled,
and (3) is the number of days during the Performance Period. The excess of the
Performance Units that were originally awarded to you under the Agreement over
the Disability Adjusted Performance Units will be immediately forfeited on the
date of your Termination of Employment due to your becoming permanently
disabled. Any amount payable to you pursuant to this Section 1.3 will be paid on
the Scheduled Payment Date.
For purposes of this Section 1.3, you will be “permanently disabled” if you
(a) are unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, or (b) are, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three (3) months under an
accident and health plan covering employees of the Company Group.
1.4    Death. Notwithstanding any other provision of the Agreement or these
Terms and Conditions to the contrary, if you die before the last day of the
Performance Period and while in the active employ of one or more members of the
Company Group, then the number of Performance Units issued to you under the
Agreement will automatically be reduced (without action by you and/or the
Company) on the date of your Termination of Employment to that number of
Performance Units determined under the following formula (the “Deceased Adjusted
Performance Units”):
(1) multiplied by (2) divided by (3)
where (1) is the number of Performance Units that were awarded to you under the
Agreement, (2) is the number of days from (and including) the first day of the
Performance Period to (and including) the date of your death, and (3) is the
number of days during the Performance Period. The excess of the Performance
Units that were originally awarded to you under the Agreement over the Deceased
Adjusted Performance Units will be immediately forfeited on the date of your
Termination of Employment due to death. Any amount payable to you pursuant to
this Section 1.4 will be paid on the Scheduled Payment Date. Such payment

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will be made in exchange for the Performance Units and thereafter your estate
and heirs, executors, administrators will have no further rights with respect to
such Performance Units or the Agreement and the Company Group will have no
further obligations pursuant to the Performance Units or the Agreement.
1.5    Retirement. Notwithstanding any other provision of the Agreement or these
Terms and Conditions to the contrary, if you incur a Termination of Employment
due to your Retirement before the last day of the Performance Period, then the
number of Performance Units issued to you under the Agreement will automatically
be reduced (without further action by you and/or the Company) on the date of
your Termination of Employment to that number of Performance Units determined
under the following formula (the “Retirement Adjusted Performance Units”):
(1) multiplied by (2) divided by (3)
where (1) is the number of Performance Units that were originally awarded to you
under the Agreement, (2) is the number of days from (and including) the first
day of the Performance Period to (and including) the date of your Termination of
Employment due to Retirement, and (3) is the number of days during the
Performance Period. The excess of the Performance Units that were originally
awarded to you under the Agreement over the Retirement Adjusted Performance
Units will be immediately forfeited on the date of your Termination of
Employment with the Company Group due to Retirement. Any amount payable to you
pursuant to this Section 1.5 will be paid on the Scheduled Payment Date. For
purposes of this Section 1.5, the term “Retirement” means the your Termination
of Employment on or after the date on which you are at least 55 years of age
(not rounded up) and you have completed at least ten whole Years of Service with
the Company Group (not rounded up). For purposes of these Terms and Conditions,
“Years of Service” means your years of service credited for vesting service
purposes under either of the Baker Hughes Incorporated Thrift Plan or the Baker
Hughes International Retirement Plan in which you are eligible to participate.
If you are eligible to participate in neither of such retirement plans, Years of
Service” means the years of service for which you would be credited for vesting
purposes under the Baker Hughes Incorporated Thrift Plan if you were eligible to
participate in that plan.
2.
PROHIBITED ACTIVITY. Notwithstanding any other provision of these Terms and
Conditions or the Agreement, if you engage in a “Prohibited Activity,” as
described below, while employed by one or more members of the Company Group,
during the Performance Period or within two years after the date of your
Termination of Employment, then your right to receive payment under the
Agreement, to the extent still outstanding at that time, will be completely
forfeited. A “Prohibited Activity” will be deemed to have occurred, as
determined by the Committee in its sole and absolute discretion, if you (i)
divulge any non-public, confidential or proprietary information of the Company
Group but excluding information that (a) becomes generally available to the
public other than as a result of your public use, disclosure, or fault, or
(b) becomes available to you on a non-confidential basis after your employment
termination date from a source other than a member of the Company Group prior to
the public use or disclosure by you, provided that such source is not bound by a
confidentiality agreement or otherwise prohibited from transmitting the
information

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by a contractual, legal or fiduciary obligation, or (ii) directly or indirectly,
consult with or become affiliated with, conducts, participate or engage in, or
becomes employed by, any business that is competitive with the business of any
member of the Company Group, wherever from time to time conducted throughout the
world, including situations where you solicit or participate in or assist in any
way in the solicitation or recruitment, directly or indirectly, of any employees
of any member of the Baker Hughes Group.
3.
TAX WITHHOLDING. To the extent that the receipt of the Performance Units or any
payment pursuant to the Agreement results in income, wages or other compensation
to you for any income, employment or other tax purposes with respect to which
the Company has a withholding obligation, you will deliver to the Company at the
time of such receipt or payment, as the case may be, such amount of money as the
Company may require to meet its obligation under applicable tax laws or
regulations, and, if you fail to do so, the Company is authorized to withhold
from any payment under the Agreement or from any cash or stock remuneration or
other payment then or thereafter payable to you any tax required to be withheld
by reason of such taxable income, wages or compensation.

4.
NONTRANSFERABILITY. The Agreement is not transferable by you otherwise than by
will or by the laws of descent and distribution.

5.
CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The existence of the Performance Units
will not affect in any way the right or power of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change in
its capital structure or its business, engage in any merger or consolidation,
issue any debt or equity securities, dissolve or liquidate, or sell, lease,
exchange or otherwise dispose of all or any part of its assets or business, or
engage in any other corporate act or proceeding.

6.
PERFORMANCE UNITS DO NOT AWARD ANY RIGHTS OF A SHAREHOLDER. You will not have
the voting rights or any of the other rights, powers or privileges of a holder
of the stock of the Company with respect to the Performance Units that are
awarded hereby.

7.
EMPLOYMENT RELATIONSHIP. For purposes of the Agreement, you will be considered
to be in the employment of the Company Group as long as you have an employment
relationship with the Company Group. The Committee will determine any questions
as to whether and when there has been a termination of such employment
relationship, and the cause of such termination, under the Plan and the
Committee’s determination will be final and binding on all persons.

8.
NOT AN EMPLOYMENT AGREEMENT. The Agreement is not an employment agreement, and
no provision of the Agreement will be construed or interpreted to create an
employment relationship between you and the Company or any Affiliate or
guarantee the right to remain employed by the Company or any Affiliate for any
specified term.

9.
LIMIT OF LIABILITY. Under no circumstances will the Company or an Affiliate be
liable for any indirect, incidental, consequential or special damages (including
lost profits) of any form incurred by any person, whether or not foreseeable and
regardless of the form of the act in which such a claim may be brought, with
respect to the Plan.

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10.
EMPLOYER LIABLE FOR PAYMENT. Except as specified in Section 1.2, the legal
entity that is a member of the Company Group and that is classified by the
Company Group as your employer (the “Employer”) is liable for the payment of any
amounts that become due under the Agreement.

11.
DATA PRIVACY. The Company’s Human Resources Department in Houston, Texas
(U.S.A.) administers and maintains the data regarding the Plan, the awardees and
the performance units granted to awardees for all employees in the Company Group
worldwide.

The data administered and maintained by the Company includes information that
may be considered personal data, including the name of the awardee, the award
granted and the number of performance units included in any award (“Employee
Personal Data”). From time to time during the course of your employment in the
Company Group, the Company may transfer certain of your Employee Personal Data
to Affiliates as necessary for the purpose of implementation, administration and
management of your participation in the Plan (the “Purposes”), and the Company
and its Affiliates may each further transfer your Employee Personal Data to any
third parties assisting the Company in the implementation, administration and
management of the Plan (collectively, “Data Recipients”). The countries to which
your Employee Personal Data may be transferred may have data protection
standards that are different than those in your home country and that offer a
level of data protection that is less than that in your home country.
In accepting the award of the Performance Units set forth in the Agreement, you
hereby expressly acknowledge that you understand that from time to time during
the course of your employment in the Company Group the Company may transfer your
Employee Personal Data to Data Recipients for the Purposes. You further
acknowledge that you understand that the countries to which your Employee
Personal Data may be transferred may have data protection standards that are
different than those in your home country and that offer a level of data
protection that is less than that in your home country.
Further, in accepting the award of the Performance Units set forth in the
Agreement, you hereby expressly affirm that you do not object, and you hereby
expressly consent, to the transfer of your Employee Personal Data by the Company
to Data Recipients for the Purposes from time to time during the course of your
employment in the Company Group.
12.
RECOUPMENTS. If the Company is required to prepare an accounting restatement due
to the material noncompliance of the Company with any financial reporting
requirement under applicable securities laws, if you are then a current or
former executive officer of the Company you will forfeit and must repay to the
Company any compensation awarded under the Agreement to the extent specified in
any of the Company’s compensation recoupment policies established or amended
(now or in the future) in compliance with the rules and standards of the
Securities and Exchange Commission Committee under or in connection with Section
954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Further,
if the Company is required to prepare an accounting restatement due in whole or
in part to your misconduct, you will forfeit and must repay to the Company any
compensation awarded under the Agreement to the extent required by the Board of
Directors of the Company in accordance with the terms of the Company’s
compensation recoupment policy as in effect on January 23, 2014.

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13.
OTHER AGREEMENTS. Nothing in these Terms and Conditions is intended to reduce
the Company’s protections or your obligations under (1) any other agreement
between you and the Company or any other member of the Company Group, (2) the
common law, or (3) any applicable state, federal or foreign statute.

14.
GOVERNING LAW AND VENUE. The Plan, these Terms and Conditions and the award of
the performance units set forth in the Agreement shall be governed by the laws
of the State of Texas, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan,
these Terms and Conditions and the award of the performance units to the
substantive law of another jurisdiction. In accepting the award of the
performance units you are deemed to agree to submit to the exclusive
jurisdiction and venue of the federal or state courts of Harris County, Texas,
to resolve any and all issues that may arise out of or relate to the Plan, these
Terms and Conditions and the award of the performance units.    

15.
SEVERABILITY AND BLUE PENCILING. If any single Section or clause of these Terms
and Conditions should be found unenforceable, it shall be severed and the
remaining Sections and clauses of these Terms and Conditions shall be enforced
in accordance with the intent of these Terms and Conditions. If any particular
provision of these Terms and Conditions shall be adjudicated to be invalid or
unenforceable, the Company and you specifically authorize the court making such
determination to edit the invalid or unenforceable provision to allow these
Terms and Conditions, and the provisions thereof, to be valid and enforceable to
the fullest extent allowed by law or public policy.

16.
MISCELLANEOUS. The Agreement is awarded pursuant to and is subject to all of the
provisions of the Plan, including amendments to the Plan, if any. In the event
of a conflict between these Terms and Conditions and the Plan provisions, the
Plan provisions will control. The terms “you” and “your” refer to the
Participant named in the Agreement. Capitalized terms that are not defined
herein will have the meanings ascribed to such terms in the Plan or the
Agreement. The Company’s rights under these Terms and Conditions and the
Agreement may be assigned by the Company.

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