Exhibit 10.2
October 25, 2007
Mr. David H. Barr
38 Southgate
The Woodlands, TX 77380
Dear David,
We have agreed to expand your responsibilities to include oversight of the
enterprise performance of Baker Hughes Incorporated (the “Company”) in the
Eastern Hemisphere, while continuing in your current role as Group President,
Completion & Production for Baker Hughes Oilfield Operations, Inc. (“BHOO”). You
will continue to report directly to me in this expanded role.
In recognition of your added responsibilities, which are effective immediately,
your current compensation will be adjusted as follows:

1)   Your new base salary will be $37,500.00 per month, effective November 4,
2007, paid biweekly as earned. The next review of your base salary is not
scheduled to occur before 2009.   2)   Other details of your current
compensation package will be adjusted as indicated below, effective January 1,
2008. All payouts and grants are subject to approval by the Compensation
Committee of the Board of Directors and are based on the financial performance
of the Company and subject to the Terms and Conditions of the respective plans
and award agreements.

  a)   The Expected Value (“EV”) target for your participation in the Baker
Hughes Incorporated Annual Incentive Compensation Plan will be increased to 70%.
    b)   Your compensation package includes continued eligibility for
participation in the Baker Hughes Incorporated 2002 Director & Officer Long-Term
Incentive Plan. The target level for your participation will be increased to
four times base salary based on the Company’s standard methodology for
determining long-term awards.     c)   You are reminded that you are expected to
attain and maintain a level of ownership of Baker Hughes Incorporated stock
equal to at least three times your base salary.     d)   You will continue to be
covered by the Company’s Executive Severance Policy, which currently provides
for a payment equal to eighteen months of your base salary in the event of your
covered termination. You will also continue to be eligible for participation in
the executive perquisite program, which entitles you to a perquisite award in
the amount of $20,000 per year for expenses incurred under the program and which
amounts are paid in quarterly installments. Both policies are subject to change
at the discretion of the Company’s Board of Directors.

3)   You will continue to be eligible to participate in Company-sponsored
benefit programs, including the Supplemental Retirement Plan (SRP), our health &
welfare programs, Thrift (401k) Plan, Pension Plan and Employee Stock Purchase
Plan. You will have a choice of coverage options that best suit you and your
family’s needs. Coverage options and contribution amounts are related to your
benefit elections, base salary level (as appropriate) and specific requirements
of each of these plans, as outlined in the appropriate Summary Plan Description.
  4)   The above mentioned changes to your compensation package will not impact
the existing Change in Control Severance Agreement and Indemnification Agreement
between you and the Company.

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Additionally, in recognition of the increased amount of time you will be
expected to spend in the Eastern Hemisphere, we will arrange temporary
accommodations in Dubai, United Arab Emirates, for you and your spouse, for a
period expected to last up to 18 months (the “Temporary Period”), under the
following conditions:

1)   Effective January 1, 2008, while you are in Dubai, you will be provided
with the following benefits:

  a)   A car with a driver available to you (for work-related commuting) and
your spouse when in Dubai (at the disposal of Baker Hughes when not in use by
you or your spouse).     b)   Fully-furnished 3-bedroom apartment accommodations
for you and your spouse, equipped with workstation and broadband connection with
access to the BHI network and VOIP phone. You and your spouse will be provided a
trip to Dubai for the purpose of selecting the temporary accommodation.     c)  
A cell phone for your spouse.     d)   Travel via business-class airfare to/from
Houston for your spouse (maximum of 6 round trips per year).     e)  
Reimbursement of fees for periodic country club access while in Dubai.     f)  
A compensation uplift equal to 10% of your base salary, paid during the
Temporary Period through Payroll.     g)   Offset of any adverse tax
consequences resulting from the above.     h)   All reimbursements will be made
in accordance with the Company’s Expense Reimbursement Policy.

This offer does not guarantee employment for a specified term and is not to be
construed as a contract limiting the prerogative of the Company to terminate the
employment relationship with or without cause and with or without notice.
Please acknowledge your acceptance of this offer by initialing and signing where
indicated one copy of this letter and returning it to me.
I look forward to continuing to work with you as we lead Baker Hughes
Incorporated to a new level of performance.
Sincerely,

             
/s/Chad C. Deaton
      October 26, 2007    
 
           
Chad C. Deaton
      Date    
Chairman and Chief Executive Officer
           
Baker Hughes Incorporated
           
 
           
Agreed and Accepted:
           
 
           
/s/David H. Barr
      October 26, 2007    
 
           
David H. Barr
      Date    

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