Exhibit 10.1

INDEMNIFICATION AGREEMENT

     INDEMNIFICATION AGREEMENT, made and executed effective October 25, 2004
(this “Agreement”), by and between BAKER HUGHES INCORPORATED, a Delaware
corporation (the “Company”), and Chad C. Deaton, an individual resident of the
State of Texas (the “Indemnitee”).

     WHEREAS, the Company is aware that, in order to induce highly competent
persons to serve the Company as directors or officers or in other capacities,
the Company must provide such persons with adequate protection through insurance
and indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the Company;

     WHEREAS, the Company recognizes that the increasing difficulty in obtaining
directors’ and officers’ liability insurance, the increasing cost of such
insurance and the general reductions in coverage of such insurance have made
attracting and retaining such persons more difficult;

     WHEREAS, the Company recognizes the substantial increase in corporate
litigation in general, subjecting directors and officers to expensive litigation
risks at the same time as the availability and coverage of liability insurance
has been severely limited;

     WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Company’s stockholders that the Company act to assure
such persons that there will be increased certainty of such protection in the
future;

     WHEREAS, it is reasonable, prudent and necessary for the Company to
contractually obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will continue to serve the Company free
from undue concern that they will not be so indemnified; and

     WHEREAS, the Indemnitee is willing to serve, continue to serve and take on
additional service for or on behalf of the Company or any of its direct or
indirect wholly-owned subsidiaries on the condition that he/she be so
indemnified.

     NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
the Indemnitee do hereby agree as follows:

1.   Definitions. For purposes of this Agreement:

     (a) “Change in Control” shall mean a change in control of the Company
occurring after the date hereof of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under

 

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the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the
Company is then subject to such reporting requirement; provided, however, that,
without limitation, a Change in Control shall include the following: (i) the
acquisition (other than from the Company) by any person, entity or “group”
within the meaning of Section 13(d)(3) or 14(d)(2) of the Act (excluding, for
this purpose, the Company or its subsidiaries, any employee benefit plan of the
Company or its subsidiaries which acquires beneficial ownership of voting
securities of the Company and any qualified institutional investor who meets the
requirements of Rule 13d-1(b)(1) promulgated under the Act) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Act), directly
or indirectly, of 30% or more of the combined voting power of the Company’s then
outstanding securities, excluding any person, entity or group that becomes a
beneficial owner in connection with a transaction described in clause (iii)(A)
below; (ii) individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the “Incumbent Board”) ceasing for any reason to
constitute at least a majority of the Board of Directors; provided that, any
person becoming a director subsequent to the date hereof whose appointment or
election by the Board of Directors of the Company or nomination for election by
the Company’s stockholders was approved or recommended by a vote of at least 2/3
of the directors then comprising the Incumbent Board or whose appointment,
election or nomination for election was previously so approved or recommended
(other than an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the directors of the Company) shall be, for purposes
of this Agreement, considered as though such person were a member of the
Incumbent Board; (iii) the consummation of a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
corporation, (A) with respect to which persons who were the stockholders of the
Company immediately prior to such merger or consolidation, in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any “affiliate” (within the meaning of
Rule 12b-2 of the General Rules and Regulations of the Act), do not, immediately
thereafter, own at least 50% of the combined voting power of the securities of
the Company or such surviving entity or any parent thereof outstanding, or
(B) which is effected to implement a recapitalization of the Company (or similar
transaction) in which no person, entity or group becomes the beneficial owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by this person, entity or group any securities
acquired directly from the Company or its affiliates other than in connection
with the acquisition by the Company or its affiliates of a business)
representing 30% or more of the combined voting power of the Company’s then
outstanding securities; (iv) the consummation of a merger or consolidation of
the Company or any direct or indirect subsidiary of the Company with any other
corporation, other than a merger or consolidation immediately following which
the individuals who comprise the Incumbent Board constitute at least a majority
of the Board of Directors of the Company, the entity surviving such merger or
any parent thereof (or a majority plus one member

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where such board comprises and odd number of members); or (v) the stockholders
of the Company approving a plan of complete liquidation or dissolution of the
Company or the consummation of an agreement for the sale or disposition by the
Company of all or substantially all of the assets of the Company, other than
(A) a sale or disposition of all or substantially all of the assets of the
Company to an entity, at least 50% of the combined voting power of the voting
securities of which are owned by the stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale (B) or where the individuals who comprise the Incumbent Board
constitute at least a majority of the board of directors of such entity or any
parent thereof (or a majority plus one member where such board is comprised of
an odd number of members). Notwithstanding the foregoing, a “Change in Control”
shall not be deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately following which the
record holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity that owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions.

     (b) “Disinterested Director” shall mean a director of the Company who is
not or was not a party to the action, suit, investigation or proceeding in
respect of which indemnification is being sought by the Indemnitee.

     (c) “Expenses” shall include all attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating or being
or preparing to be a witness in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative in
nature.

     (d) “Independent Counsel” shall mean a law firm or a member of a law firm
that neither is presently nor in the past five years has been retained to
represent (i) the Company or the Indemnitee in any matter material to either
such party or (ii) any other party to the action, suit, investigation or
proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or the Indemnitee
in an action to determine the Indemnitee’s right to indemnification under this
Agreement.

     2. Service by the Indemnitee. The Indemnitee agrees to serve as a director
or officer of the Company and will discharge his/her duties and responsibilities
to the best of his/her ability so long as the Indemnitee is duly elected or
qualified in accordance with the provisions of the Restated Certificate of
Incorporation, as amended (the “Certificate”), and the Bylaws, as amended (the
“Bylaws”), of the Company and the General Corporation Law of the State of

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Delaware, as amended (the “DGCL”), or until his/her earlier death, retirement,
resignation or removal. The Indemnitee may at any time and for any reason resign
from such position (subject to any other obligation, whether contractual or
imposed by operation of law), in which event this Agreement shall continue in
full force and effect after such resignation. Nothing in this Agreement shall
confer upon the Indemnitee the right to continue in the employ of the Company or
as a director of the Company, or affect the right of the Company to terminate,
in the Company’s sole discretion (with or without cause) and at any time, the
Indemnitee’s employment, in each case, subject to any contractual rights of the
Indemnitee created or existing otherwise than under this Agreement.

     3. Indemnification. The Company shall indemnify the Indemnitee and advance
Expenses to the Indemnitee as provided in this Agreement to the fullest extent
permitted by the Certificate, the Bylaws in effect as of the date hereof and the
DGCL or other applicable law in effect on the date hereof and to any greater
extent that the DGCL or applicable law may in the future from time to time
permit. Without diminishing the scope of the indemnification provided by this
Section 3, the rights of indemnification of the Indemnitee provided hereunder
shall include, but shall not be limited to, those rights hereinafter set forth,
except that no indemnification shall be paid to the Indemnitee:

     (a) on account of any action, suit or proceeding in which judgment is
rendered against the Indemnitee for disgorgement of profits made from the
purchase or sale by the Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Act or similar provisions of any federal,
state or local statutory law;

     (b) on account of conduct of the Indemnitee which is finally adjudged by a
court of competent jurisdiction to have been knowingly fraudulent or to
constitute willful misconduct;

     (c) in any circumstance where such indemnification is expressly prohibited
by applicable law;

     (d) with respect to liability for which payment is actually made to the
Indemnitee under a valid and collectible insurance policy or under a valid and
enforceable indemnity clause, Bylaw or agreement (other than this Agreement),
except in respect of any liability in excess of payment under such insurance,
clause, Bylaw or agreement;

     (e) if a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful (and, in this respect, both
the Company and the Indemnitee have been advised that it is the position of the
Securities and Exchange Commission that indemnification for liabilities arising
under the federal securities laws is against public policy and is, therefore,
unenforceable, and that claims for indemnification should be submitted to the
appropriate court for adjudication); or

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     (f) in connection with any action, suit or proceeding by the Indemnitee
against the Company or any of its direct or indirect wholly-owned subsidiaries
or the directors, officers, employees or other Indemnitees of the Company or any
of its direct or indirect wholly-owned subsidiaries, (i) unless such
indemnification is expressly required to be made by law, (ii) unless the action,
suit or proceeding was previously authorized by a majority of the Board of
Directors of the Company, (iii) unless such indemnification is provided by the
Company, in its sole discretion, pursuant to the powers vested in the Company
under applicable law or (iv) except as provided in Sections 12 and 14 hereof.

     4. Actions or Proceedings Other Than an Action by or in the Right of the
Company. The Indemnitee shall be entitled to the indemnification rights provided
in this Section 4 if the Indemnitee was or is a party or is threatened to be a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature, other than
an action by or in the right of the Company, by reason of the fact that the
Indemnitee is or was a director, officer or employee, agent or fiduciary of the
Company, or any of its direct or indirect wholly-owned subsidiaries, or is or
was serving at the request of the Company, or any of its direct or indirect
wholly-owned subsidiaries, as a director, officer or employee of any other
entity, including, but not limited to, another corporation, partnership, limited
liability company, employee benefit plan, joint venture, trust or other
enterprise, or by reason of any act or omission by him/her in such capacity.
Pursuant to this Section 4, the Indemnitee shall be indemnified against all
Expenses, judgments, penalties (including excise and similar taxes), fines and
amounts paid in settlement which were actually and reasonably incurred by the
Indemnitee in connection with such action, suit or proceeding (including, but
not limited to, the investigation, defense or appeal thereof), if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his/her
conduct was unlawful.

     5. Actions by or in the Right of the Company. The Indemnitee shall be
entitled to the indemnification rights provided in this Section 5 if the
Indemnitee was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding brought by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that the Indemnitee is or was a director, officer or employee, agent or
fiduciary of the Company, or any of its direct or indirect wholly-owned
subsidiaries, or is or was serving at the request of the Company, or any of its
direct or indirect wholly-owned subsidiaries, as a director, officer or employee
of another entity, including, but not limited to, another corporation,
partnership, limited liability company, employee benefit plan, joint venture,
trust or other enterprise, or by reason of any act or omission by him/her in any
such capacity. Pursuant to this Section 5, the Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by him/her in connection
with the defense or settlement of such action, suit or proceeding (including,
but not limited to the investigation, defense or appeal thereof), if the
Indemnitee acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company; provided,
however, that no such indemnification shall be made in respect of any claim,
issue or matter as to which the Indemnitee shall have been adjudged to be liable
to the Company, unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action, suit or proceeding was
brought shall

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determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses which such court shall deem
proper.

     6. Good Faith Definition. For purposes of this Agreement, the Indemnitee
shall be deemed to have acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, or, with respect to any criminal action or proceeding, to have had no
reasonable cause to believe the Indemnitee’s conduct was unlawful, if such
action was based on any of the following: (a) the records or books of the
account of the Company or other enterprise, including financial statements; (b)
information supplied to the Indemnitee by the officers of the Company or other
enterprise in the course of his/her duties; (c) the advice of legal counsel for
the Company or other enterprise; or (d) information or records given in reports
made to the Company or other enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Company or other enterprise.

     7. Indemnification for Expenses of Successful Party. Notwithstanding the
other provisions of this Agreement, to the extent that the Indemnitee has served
on behalf of the Company, or any of its direct or indirect wholly-owned
subsidiaries, as a witness or other participant in any class action or
proceeding, or has been successful, on the merits or otherwise, in defense of
any action, suit or proceeding referred to in Sections 4 and 5 hereof, or in
defense of any claim, issue or matter therein, including, but not limited to,
the dismissal of any action without prejudice, the Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by the
Indemnitee in connection therewith.

     8. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by the Indemnitee in connection with the
investigation, defense, appeal or settlement of such suit, action, investigation
or proceeding described in Sections 4 and 5 hereof, but is not entitled to
indemnification for the total amount thereof, the Company shall nevertheless
indemnify the Indemnitee for the portion of such Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by the
Indemnitee to which the Indemnitee is entitled.

     9. Procedure for Determination of Entitlement to Indemnification. (a) To
obtain indemnification under this Agreement, the Indemnitee shall submit to the
Company a written request, including documentation and information which is
reasonably available to the Indemnitee and is reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to indemnification. The
Secretary of the Company shall, promptly upon receipt of a request for
indemnification, advise the Board of Directors in writing that the Indemnitee
has requested indemnification. Any Expenses incurred by the Indemnitee in
connection with the Indemnitee’s request for indemnification hereunder shall be
borne by the Company. The Company hereby indemnifies and agrees to hold the
Indemnitee harmless for any Expenses incurred by the Indemnitee under the
immediately preceding sentence irrespective of the outcome of the determination
of the Indemnitee’s entitlement to indemnification.

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     (b) Upon written request by the Indemnitee for indemnification pursuant to
Sections 4 and 5 hereof, the entitlement of the Indemnitee to indemnification
pursuant to the terms of this Agreement shall be determined by the following
person or persons, who shall be empowered to make such determination: (i) if a
Change in Control shall have occurred, by Independent Counsel (unless the
Indemnitee shall request in writing that such determination be made by the Board
of Directors (or a committee thereof) in the manner provided for in clause
(b)(ii) of this Section 9) in a written opinion to the Board of Directors, a
copy of which shall be delivered to the Indemnitee; (ii) if a Change in Control
shall not have occurred, (A) by the Board of Directors of the Company, by a
majority vote of a quorum consisting of Disinterested Directors, or (B) if a
quorum consisting of Disinterested Directors is not obtainable, or if a majority
vote of a quorum consisting of Disinterested Directors so directs, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to the Indemnitee; or (iii) in any event, by the
stockholders pursuant to the Bylaws of the Company. The Independent Counsel
shall be selected by the Board of Directors and approved by the Indemnitee. Upon
failure of the Board of Directors to so select, or upon failure of the
Indemnitee to so approve, the Independent Counsel shall be selected by the
Chancellor of the State of Delaware or such other person as the Chancellor shall
designate to make such selection. Such determination of entitlement to
indemnification shall be made not later than 45 days after receipt by the
Company of a written request for indemnification. If the person making such
determination shall determine that the Indemnitee is entitled to indemnification
as to part (but not all) of the application for indemnification, such person
shall reasonably prorate such part of indemnification among such claims, issues
or matters. If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within 10 days after such
determination.

     10. Presumptions and Effect of Certain Proceedings. (a) In making a
determination with respect to entitlement to indemnification, the Indemnitee
shall be presumed to be entitled to indemnification hereunder and the Company
shall have the burden of proof in the making of any determination contrary to
such presumption.

     (b) If the Board of Directors, or such other person or persons empowered
pursuant to Section 9 to make the determination of whether the Indemnitee is
entitled to indemnification, shall have failed to make a determination as to
entitlement to indemnification within 45 days after receipt by the Company of
such request, the requisite determination of entitlement to indemnification
shall be deemed to have been made and the Indemnitee shall be absolutely
entitled to such indemnification, absent actual and material fraud in the
request for indemnification or a prohibition of indemnification under applicable
law. The termination of any action, suit, investigation or proceeding described
in Sections 4 or 5 hereof by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself: (i) create a
presumption that the Indemnitee did not act in good faith and in a manner which
he/she reasonably believed to be in or not opposed to the best interests of the
Company, or, with respect to any criminal action or proceeding, that the
Indemnitee has reasonable cause to believe that the Indemnitee’s conduct was
unlawful; or (ii) otherwise adversely affect the rights of the Indemnitee to
indemnification, except as may be provided herein.

     11. Advancement of Expenses. Subject to applicable law, all reasonable
Expenses actually incurred by the Indemnitee in connection with any threatened
or pending action, suit or proceeding shall be paid by the Company in advance of
the final disposition of such action, suit

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or proceeding, if so requested by the Indemnitee, within 20 days after the
receipt by the Company of a statement or statements from the Indemnitee
requesting such advance or advances. The Indemnitee may submit such statements
from time to time. The Indemnitee’s entitlement to such Expenses shall include
those incurred in connection with any proceeding by the Indemnitee seeking an
adjudication or award in arbitration pursuant to this Agreement. Such statement
or statements shall reasonably evidence the Expenses incurred by the Indemnitee
in connection therewith and shall include or be accompanied by a written
affirmation by the Indemnitee of the Indemnitee’s good faith belief that the
Indemnitee has met the standard of conduct necessary for indemnification under
this Agreement and an undertaking by or on behalf of the Indemnitee to repay
such amount if it is ultimately determined that the Indemnitee is not entitled
to be indemnified against such Expenses by the Company pursuant to this
Agreement or otherwise. Each written undertaking to pay amounts advanced must be
an unlimited general obligation but need not be secured, and shall be accepted
without reference to financial ability to make repayment.

     12. Remedies of the Indemnitee in Cases of Determination not to Indemnify
or to Advance Expenses. In the event that a determination is made that the
Indemnitee is not entitled to indemnification hereunder or if the payment has
not been timely made following a determination of entitlement to indemnification
pursuant to Sections 9 and 10, or if Expenses are not advanced pursuant to
Section 11, the Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware or any other court of competent
jurisdiction of the Indemnitee’s entitlement to such indemnification or advance.
Alternatively, the Indemnitee may, at the Indemnitee’s option, seek an award in
arbitration to be conducted by a single arbitrator chosen by the Indemnitee and
approved by the Company, which approval shall not be unreasonably withheld or
delayed. If the Indemnitee and the Company do not agree upon an arbitrator
within 30 days following notice to the Company by the Indemnitee that it seeks
an award in arbitration, the arbitrator will be chosen pursuant to the rules of
the American Arbitration Association (the “AAA”). The arbitration will be
conducted pursuant to the rules of the AAA and an award shall be made within
60 days following the filing of the demand for arbitration. The arbitration
shall be held in Houston, Harris County, Texas. The Company shall not oppose the
Indemnitee’s right to seek any such adjudication or award in arbitration or any
other claim. Such judicial proceeding or arbitration shall be made de novo, and
the Indemnitee shall not be prejudiced by reason of a determination (if so made)
that the Indemnitee is not entitled to indemnification. If a determination is
made or deemed to have been made pursuant to the terms of Section 9 or
Section 10 hereof that the Indemnitee is entitled to indemnification, the
Company shall be bound by such determination and shall be precluded from
asserting that such determination has not been made or that the procedure by
which such determination was made is not valid, binding and enforceable. The
Company further agrees to stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement and
is precluded from making any assertions to the contrary. If the court or
arbitrator shall determine that the Indemnitee is entitled to any
indemnification hereunder, the Company shall pay all reasonable Expenses
actually incurred by the Indemnitee in connection with such adjudication or
award in arbitration (including, but not limited to, any appellate proceedings).

     13. Notification and Defense of Claim. Promptly after receipt by the
Indemnitee of notice of the commencement of any action, suit or proceeding, the
Indemnitee will, if a claim in respect thereof is to be made against the Company
under this Agreement, notify the Company in

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writing of the commencement thereof. The omission by the Indemnitee to so notify
the Company will not relieve the Company from any liability that it may have to
the Indemnitee under this Agreement or otherwise, except to the extent that the
Company may suffer material prejudice by reason of such failure. Notwithstanding
any other provision of this Agreement, with respect to any such action, suit or
proceeding as to which the Indemnitee gives notice to the Company of the
commencement thereof:

     (a) The Company will be entitled to participate therein at its own expense.

     (b) Except as otherwise provided in this Section 13(b), to the extent that
it may wish, the Company, jointly with any other indemnifying party similarly
notified, shall be entitled to assume the defense thereof with counsel
reasonably satisfactory to the Indemnitee. After notice from the Company to the
Indemnitee of its election to so assume the defense thereof, the Company shall
not be liable to the Indemnitee under this Agreement for any legal or other
Expenses subsequently incurred by the Indemnitee in connection with the defense
thereof other than reasonable costs of investigation or as otherwise provided
below. The Indemnitee shall have the right to employ the Indemnitee’s own
counsel in such action, suit or proceeding, but the fees and Expenses of such
counsel incurred after notice from the Company of its assumption of the defense
thereof shall be at the expense of the Indemnitee unless (i) the employment of
counsel by the Indemnitee has been authorized by the Company, (ii) the
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee in the conduct of the defense of
such action and such determination by the Indemnitee shall be supported by an
opinion of counsel, which opinion shall be reasonably acceptable to the Company,
or (iii) the Company shall not in fact have employed counsel to assume the
defense of the action, in each of which cases the fees and Expenses of counsel
shall be at the expense of the Company. The Company shall not be entitled to
assume the defense of any action, suit or proceeding brought by or on behalf of
the Company or as to which the Indemnitee shall have reached the conclusion
provided for in clause (ii) above.

     (c) The Company shall not be liable to indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of any action, suit or proceeding
affected without its written consent, which consent shall not be unreasonably
withheld. The Company shall not be required to obtain the consent of the
Indemnitee to settle any action, suit or proceeding which the Company has
undertaken to defend if the Company assumes full and sole responsibility for
such settlement and such settlement grants the Indemnitee a complete and
unqualified release in respect of any potential liability.

     14. Other Right to Indemnification. The indemnification and advancement of
Expenses provided by this Agreement are cumulative, and not exclusive, and are
in addition to any other rights to which the Indemnitee may now or in the future
be entitled under any provision of the Bylaws or Certificate of the Company, the
Certificate or Bylaws or other

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governing documents of any direct or indirect wholly-owned subsidiary of the
Company, any vote of the stockholders or Disinterested Directors, any provision
of law or otherwise. Except as required by applicable law, the Company shall not
adopt any amendment to its Bylaws or Certificate the effect of which would be to
deny, diminish or encumber the Indemnitee’s right to indemnification under this
Agreement.

     15. Director and Officer Liability Insurance. The Company shall, from time
to time, make the good faith determination whether or not it is practicable for
the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company, and any direct or indirect wholly-owned subsidiary of the Company, with
coverage for losses from wrongful acts, or to ensure the Company’s performance
of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
necessary or is not reasonably available, if the premium costs for such
insurance are disproportionate to the amount of coverage provided, if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit or if the Indemnitee is covered by similar insurance
maintained by a direct or indirect wholly-owned subsidiary of the Company.
However, the Company’s decision whether or not to adopt and maintain such
insurance shall not affect in any way its obligations to indemnify its officers
and directors under this Agreement or otherwise. In all policies of director and
officer liability insurance, the Indemnitee shall be named as an insured in such
a manner as to provide the Indemnitee the same rights and benefits as are
accorded to the most favorably insured of the Company’s directors, if the
Indemnitee is a director; or of the Company’s officers, if the Indemnitee is not
a director of the Company, but is an officer. The Company agrees that the
provisions of this Agreement shall remain in effect regardless of whether
liability or other insurance coverage is at any time obtained or retained by the
Company; except that any payments made to, or on behalf of, the Indemnitee under
an insurance policy shall reduce the obligations of the Company hereunder.

     16. Spousal Indemnification. The Company will indemnify the Indemnitee’s
spouse to whom the Indemnitee is legally married at any time the Indemnitee is
covered under the indemnification provided in this Agreement (even if the
Indemnitee did not remain married to him or her during the entire period of
coverage) against any pending or threatened action, suit, proceeding or
investigation for the same period, to the same extent and subject to the same
standards, limitations, obligations and conditions under which the Indemnitee is
provided indemnification herein, if the Indemnitee’s spouse (or former spouse)
becomes involved in a pending or threatened action, suit, proceeding or
investigation solely by reason of his or her status as the Indemnitee’s spouse,
including, without limitation, any pending or threatened action, suit,
proceeding or investigation that seeks damages recoverable from marital
community property, jointly-owned property or property purported to have been
transferred from the Indemnitee to his/her spouse (or former spouse). The
Indemnitee’s spouse or former spouse also may be entitled to advancement of
Expenses to the same extent that the Indemnitee is entitled to advancement of
Expenses herein. The Company may maintain insurance to cover its obligation
hereunder with respect to the Indemnitee’s spouse (or former spouse) or set
aside assets in a trust or escrow funds for that purpose.

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     17. Intent. This Agreement is intended to be broader than any statutory
indemnification rights applicable in the State of Delaware and shall be in
addition to any other rights the Indemnitee may have under the Company’s
Certificate, Bylaws, applicable law or otherwise. To the extent that a change in
applicable law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the
Company’s Certificate, Bylaws, applicable law or this Agreement, it is the
intent of the parties that the Indemnitee enjoy by this Agreement the greater
benefits so afforded by such change.

     18. Attorney’s Fees and Other Expenses to Enforce Agreement. In the event
that the Indemnitee is subject to or intervenes in any proceeding in which the
validity or enforceability of this Agreement is at issue or seeks an
adjudication or award in arbitration to enforce the Indemnitee’s rights under,
or to recover damages for breach of, this Agreement the Indemnitee, if he/she
prevails in whole or in part in such action, shall be entitled to recover from
the Company and shall be indemnified by the Company against any actual expenses
for attorneys’ fees and disbursements reasonably incurred by the Indemnitee.

     19. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all documents required and shall
do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.

     20. Effective Date. The provisions of this Agreement shall cover claims,
actions, suits or proceedings whether now pending or hereafter commenced and
shall be retroactive to cover acts or omissions or alleged acts or omissions
which heretofore have taken place. The Company shall be liable under this
Agreement, pursuant to Sections 4 and 5 hereof, for all acts of the Indemnitee
while serving as a director and/or officer, notwithstanding the termination of
the Indemnitee’s service, if such act was performed or omitted to be performed
during the term of the Indemnitee’s service to the Company.

     21. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) ten years after the Indemnitee has ceased to
occupy any of the positions or have any relationships described in Sections 4
and 5 of this Agreement and (b) the final termination of all pending or
threatened actions, suits, proceedings or investigations to which the Indemnitee
may be subject by reason of the fact that he/she is or was a director, officer,
employee, agent or fiduciary of the Company, or any direct or indirect
wholly-owned subsidiary of the Company, or is or was serving at the request of
the Company as a director, officer, employee of any other entity, including, but
not limited to, another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise, or by reason of
any act or omission by the Indemnitee in any such capacity. The indemnification
provided under this Agreement shall continue as to the Indemnitee even though
he/she may have ceased to be a director or officer of the Company, or any direct
or indirect wholly-owned subsidiary of the Company. This Agreement shall be
binding upon the Company and its successors and assigns, including, without
limitation, any corporation or other entity which may have acquired all or
substantially all of the Company’s assets or business or into which the Company
may be consolidated or merged, and shall inure to the benefit of the Indemnitee
and his/her spouse, successors, assigns, heirs, devisees, executors,
administrators or other legal representations. The Company shall require any
successor or assignee (whether direct or

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indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by written
agreement in form and substance reasonably satisfactory to the Company and the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or assignment had taken place.

     22. Disclosure of Payments. Except as expressly required by any federal
securities laws or other federal or state law, neither party hereto shall
disclose any payments under this Agreement unless prior approval of the other
party is obtained.

     23. Severability. If any provision or provisions of this Agreement shall be
held invalid, illegal or unenforceable for any reason whatsoever, (a) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including, but not limited to, all portions of any Sections of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and (b) to
the fullest extent possible, the provisions of this Agreement (including, but
not limited to, all portions of any paragraph of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifest by the provision held invalid, illegal or
unenforceable.

     24. Counterparts. This Agreement may be executed by one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same agreement. Only one
such counterpart signed by the party against whom enforceability is sought shall
be required to be produced to evidence the existence of this Agreement.

     25. Captions. The captions and headings used in this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

     26. Entire Agreement, Modification and Waiver. This Agreement constitutes
the entire agreement and understanding of the parties hereto regarding the
subject matter hereof, and no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver. No supplement, modification or
amendment to this Agreement shall limit or restrict any right of the Indemnitee
under this Agreement in respect of any act or omission of the Indemnitee prior
to the effective date of such supplement, modification or amendment unless
expressly provided therein.

     27. Notices. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given if
(a) delivered by hand with receipt acknowledged by the party to whom said notice
or other communication shall have been directed, (b) mailed by certified or
registered mail, return receipt requested with postage prepaid, on the date
shown on the return receipt or (c) delivered by facsimile transmission on the
date shown on the facsimile machine report:

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  (a)   If to the Indemnitee to:
 
       

      13914 I.O. Court

      Willis, Texas 77318
 
       

  (b)   If to the Company, to:
 
       

      Baker Hughes Incorporated

      Attn: General Counsel

      3900 Essex Lane, Suite 1200

      Houston, Texas 77027-5177

      Facsimile: (713) 439-8472

or to such other address as may be furnished to the Indemnitee by the Company or
to the Company by the Indemnitee, as the case may be.

     28. Governing Law. The parties hereto agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, applied without giving effect to any conflicts of law
principles.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

            BAKER HUGHES INCORPORATED
      By   /s/ H. John Riley, Jr.                 H. John Riley, Jr.       
        Lead Director and Chairman
        of the Compensation Committee     

            INDEMNITEE:
      By   /s/ Chad C. Deaton    

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