<PAGE>
                                                                    EXHIBIT 10.8








                            BAKER HUGHES INCORPORATED

                        CHANGE IN CONTROL SEVERANCE PLAN

                          (EFFECTIVE DECEMBER 3, 2003)


<PAGE>
                            BAKER HUGHES INCORPORATED

                        CHANGE IN CONTROL SEVERANCE PLAN

         WHEREAS, Baker Hughes Incorporated, a corporation organized and
existing under the laws of the State of Delaware recognizes that one of its most
valuable assets is its key management executives; and

         WHEREAS, Baker Hughes Incorporated would like to provide severance
benefits in the event that the employment of a key management executive is
involuntarily terminated in conjunction with a change in control.

         NOW, THEREFORE, Baker Hughes Incorporated adopts the Baker Hughes
Incorporated Change in Control Severance Plan, effective December 3, 2003.




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                                TABLE OF CONTENTS

<TABLE>
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                                                                                                   PAGE

<C>   <S>                                                                                           <C>
1.    ESTABLISHMENT AND OBJECTIVE....................................................................1

      1.1      Establishment.........................................................................1

      1.2      Objective.............................................................................1

2.    DEFINITIONS....................................................................................1

      2.1      Capitalized Terms.....................................................................1

      2.2      Number and Gender.....................................................................9

      2.3      Headings..............................................................................9

3.    ELIGIBILITY....................................................................................9

4.    BENEFITS......................................................................................10

      4.1      Equity Based Compensation............................................................10

      4.2      Compensation and Benefits During Incapacity and Prior to Termination of Employment...10

      4.3      Benefits Following Termination of Employment.........................................10

      4.4      Tax Gross-Up Payments................................................................13

      4.5      Legal Fees...........................................................................14

5.    TIME OF BENEFITS PAYMENTS.....................................................................15

6.    TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE........................................15

      6.1      Notice of Termination................................................................15

      6.2      Employment Termination Date..........................................................15

      6.3      Dispute Concerning Termination.......................................................16

      6.4      Compensation During Dispute..........................................................16

7.    WITHHOLDING...................................................................................16

8.    DEATH OF PARTICIPANT..........................................................................16

9.    AMENDMENT AND TERMINATION.....................................................................17

10.   ADOPTION OF PLAN BY OTHER EMPLOYERS...........................................................17

11.   MISCELLANEOUS.................................................................................17

      11.1     Plan Not an Employment Contract......................................................17

      11.2     Alienation Prohibited................................................................17

      11.3     Severability.........................................................................17

      11.4     Binding Effect.......................................................................17

</TABLE>

<PAGE>
                                TABLE OF CONTENTS
                                   (continued)
<TABLE>
<CAPTION>
                                                                                                   PAGE

<C>   <S>                                                                                           <C>

      11.5     Settlement of Disputes Concerning Benefits Under the Plan; Arbitration...............18

      11.6     Guaranty of Payment, Performance, and Observance by Baker Hughes.....................18

      11.7     No Mitigation........................................................................19

      11.8     Other Amounts Due....................................................................19

      11.9     Notices..............................................................................19

      11.10    Governing Law........................................................................20

</TABLE>





                                      -ii-

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                            BAKER HUGHES INCORPORATED

                        CHANGE IN CONTROL SEVERANCE PLAN

1.       ESTABLISHMENT AND OBJECTIVE

         1.1 ESTABLISHMENT. Baker Hughes Incorporated, a Delaware corporation,
hereby establishes a plan for certain designated employees to be known as the
"Baker Hughes Incorporated Change in Control Severance Plan" (the "Plan").

         1.2 OBJECTIVE. The Plan is designed to attract and retain certain
designated employees of the Company (defined below) and to reward such employees
of the Company by providing replacement income and certain benefits in
conjunction with a Change in Control (defined below).

2.       DEFINITIONS

         2.1 CAPITALIZED TERMS. Whenever used in the Plan, the following
capitalized terms in this Section 2.1 shall have the meanings set forth below:

                  "AFFILIATE" means any entity which is a member of (i) the same
         controlled group of corporations within the meaning of section 414(b)
         of the Code with Baker Hughes, (ii) a trade or business (whether or not
         incorporated) which is under common control (within the meaning of
         section 414(c) of the Code) with Baker Hughes or (iii) an affiliated
         service group (within the meaning of section 414(m) of the Code) with
         Baker Hughes.

                  "ANNUAL INCENTIVE PLAN" means the Baker Hughes Incorporated
         1995 Employee Annual Incentive Compensation Plan, as amended from time
         to time, any guidelines issued pursuant to such plan, and any other
         incentive compensation plans adopted by the Company from time to time
         which are in replacement of or in addition to such plan.

                  "ASSETS" means assets of any kind owned by Baker Hughes,
         including but not limited to securities of Baker Hughes' direct and
         indirect subsidiaries and Affiliates.

                  "BAKER HUGHES" means Baker Hughes Incorporated, a Delaware
         corporation, and any successor by merger or otherwise.

                  "BASE COMPENSATION" means a Participant's base salary or wages
         (as defined in section 3401(a) of the Code for purposes of federal
         income tax withholding) from the Company, modified by including any
         portion thereof that such Participant could have received in cash in
         lieu of any elective deferrals made by the Participant pursuant to the
         Supplemental Retirement Plan (other than deferrals of bonuses) or
         pursuant to a qualified cash or deferred arrangement described in
         section 401(k) of the Code and any elective contributions under a
         cafeteria plan described in section 125, and modified further by
         excluding any bonus, incentive compensation (including but not limited
         to equity-based compensation), commissions, expense reimbursements or
         other expense allowances, fringe benefits (cash and noncash), moving
         expenses, deferred compensation (other than elective deferrals by the
         Participant under a qualified cash or deferred arrangement described in
         section 401(k) of the Code or the Supplemental Retirement Plan that are

                                       1
<PAGE>
         expressly included in "Base Compensation" under the foregoing
         provisions of this definition), welfare benefits as defined in ERISA,
         overtime pay, special performance compensation amounts and severance
         compensation.

                  "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the
         meaning ascribed to those terms in Rule 13d-3 of the General Rules and
         Regulations under the Exchange Act.

                   "BOARD " means the Board of Directors of Baker Hughes or
         other governing body of Baker Hughes or its direct or indirect parent.

                  "BONUS" means each annual incentive bonus, if any, paid in
         cash by the Company to or for the benefit of an Employee for services
         rendered or labor performed while an Employee. Annual bonuses are
         generally paid with respect to a completed fiscal year by the Company
         to its employees pursuant to the Annual Incentive Plan. An Employee's
         Bonus shall be determined by including any portion thereof that such
         Participant could have received in cash in lieu of (i) any elective
         deferrals made by such Participant pursuant to the Supplemental
         Retirement Plan or (ii) elective contributions made on such
         Participant's behalf by the Company pursuant to a qualified cash or
         deferred arrangement (as defined in section 401(k) of the Code) or
         pursuant to a plan maintained under section 125 of the Code.

                  "CAUSE" means (i) the willful and continued failure by the
         Employee to substantially perform the Employee's duties with the
         Company (other than any such failure resulting from the Employee's
         incapacity due to physical or mental illness) after a written demand
         for substantial performance is delivered to the Employee by the Board
         (or by a delegate appointed by the Board), which demand specifically
         identifies the manner in which the Board believes that the Employee has
         not substantially performed the Employee's duties, or (ii) the willful
         engaging by the Employee in conduct which is demonstrably and
         materially injurious to the Company or any of its Affiliates,
         monetarily or otherwise. For purposes of Sections (i) and (ii) of this
         definition, (A) no act, or failure to act, on the Employee's part shall
         be deemed "willful" if done, or omitted to be done, by the Employee in
         good faith and with reasonable belief that the act, or failure to act,
         was in the best interest of the Company and (B) in the event of a
         dispute concerning the application of this provision, no claim by the
         Company that Cause exists shall be given effect unless the Company
         establishes to the Board by clear and convincing evidence that Cause
         exists.

                  "CHANGE IN CONTROL" means the occurrence of any of the
         following events:

         (a) the individuals who are Incumbent Directors cease for any reason to
constitute a majority of the members of the Board;

         (b) the consummation of a Merger of Baker Hughes or an Affiliate of
Baker Hughes with another Entity, unless the individuals and Entities who were
the Beneficial Owners of the Voting Securities

                                       2
<PAGE>
of Baker Hughes outstanding immediately prior to such Merger own, directly or
indirectly, at least 50 percent of the combined voting power of the Voting
Securities of any of Baker Hughes, the surviving Entity or the parent of the
surviving Entity outstanding immediately after such Merger;

         (c) any Person, other than a Specified Owner, becomes a Beneficial
Owner, directly or indirectly, of securities of Baker Hughes representing 30
percent or more of the combined voting power of Baker Hughes' then outstanding
Voting Securities;

         (d) a sale, transfer, lease or other disposition of all or
substantially all of Baker Hughes' Assets is consummated (an "Asset Sale"),
unless:

                  (1) the individuals and Entities who were the Beneficial
Owners of the Voting Securities of Baker Hughes immediately prior to such Asset
Sale own, directly or indirectly, 50 percent or more of the combined voting
power of the Voting Securities of the Entity that acquires such Assets in such
Asset Sale or its parent immediately after such Asset Sale in substantially the
same proportions as their ownership of Baker Hughes' Voting Securities
immediately prior to such Asset Sale; or

                  (2) the individuals who comprise the Board immediately prior
to such Asset Sale constitute a majority of the board of directors or other
governing body of either the Entity that acquired such Assets in such Asset Sale
or its parent (or a majority plus one member where such board or other governing
body is comprised of an odd number of directors); or

         (e) The stockholders of Baker Hughes approve a plan of complete
liquidation or dissolution of Baker Hughes.

                  "CODE" means the Internal Revenue Code of 1986, as amended, or
         any successor act.

                  "COMMITTEE" means, prior to a Change in Control or a Potential
         Change in Control, the Compensation Committee of the Board. After a
         Change in Control or a Potential Change in Control, "Committee" means
         (i) the individuals (not fewer than three (3) in number) who, on the
         date six months prior to the Change in Control constitute the
         Compensation Committee of the Board, plus, (ii) in the event that fewer
         than three (3) individuals are available from the group specified in
         clause (i) above for any reason, such individuals as may be appointed
         by the individual or individuals so available (including for this
         purpose any individual or individuals previously so appointed under
         this clause (ii)); provided, however, that the maximum number of
         individuals constituting the Committee after a Change in Control or
         Potential Change in Control shall not exceed six (6).

                  "COMPANY" means Baker Hughes or an Employer.

                  "DISABILITY" means the Participant's incapacity due to
         physical or mental illness that has caused the Participant to be absent
         from full-time performance of his duties with the Company for a period
         of six (6) consecutive months.

                  "EFFECTIVE DATE" means December 3, 2003, the date on which the
         Plan is adopted.

                                       3
<PAGE>
                  "EMPLOYEE" means an individual (i) who is employed in the
         services of the Company on the Company's active payroll, and (ii) who
         is also a United States-based executive salary grade system employee
         (under the Company's then current payroll system categories), or any
         comparable executive designations in any system that replaces the
         United States-based salary grade system. Notwithstanding the foregoing,
         the Committee may from time to time designate other individuals who may
         be selected for participation in the Plan.

                  "EMPLOYER" means any Affiliate that adopts the Plan pursuant
         to the provisions of Section 10.

                  "EMPLOYMENT TERMINATION DATE" means the date as of which a
         Participant incurs a Termination of Employment determined in accordance
         with the provisions of Section 6.2.

                  "ENTITY" means any corporation, partnership, association,
         joint-stock company, limited liability company, trust, unincorporated
         organization or other business entity.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended, or any successor act.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
         amended, or any successor act.

                  "EXCISE TAX" means the excise tax imposed by section 4999 of
         the Code or any similar tax payable under any United States federal,
         state, or local statute.

                  "EXPIRATION DATE" shall have the meaning specified in the
         definition of the "Term of the Plan".

                  "GOOD REASON" for termination by the Employee of his
         employment means the occurrence (without the Employee's express written
         consent) after any Change in Control, or prior to a Change in Control
         under the circumstances described in clauses (ii) and (iii) of the
         second paragraph of the definition of Termination of Employment
         (treating all references to "Change in Control" in paragraphs (a)
         through (f) below as references to a "Potential Change in Control"), of
         any one of the following acts by the Company, or failures by the
         Company to act, unless, in the case of any act or failure to act
         described in paragraph (a), (e), (f) or (g) below, such act or failure
         to act is corrected prior to the effective date of the Employee's
         termination for Good Reason:

         (a) the assignment to the Employee of any duties or responsibilities
which are substantially diminished as compared to the Employee's duties and
responsibilities immediately prior to a Change in Control or a material change
in the Employee's reporting responsibilities, titles or offices as an Employee
and as in effect immediately prior to the Change in Control.

         (b) a reduction by the Company in the Employee's annual Base
Compensation as in effect on the date hereof or as the same may be increased
from time to time, except for across-the-board salary reductions similarly
affecting all individuals having a similar level of

                                       4
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authority and responsibility with the Company and all individuals having a
similar level of authority and responsibility with any Person in control of the
Company;

         (c) the relocation of the Employee's principal place of employment to a
location outside of a 50-mile radius from the Employee's principal place of
employment immediately prior to the Change in Control or the Company's requiring
the Employee to be based anywhere other than such principal place of employment
(or permitted relocation thereof) except for required travel on the Company's
business to an extent substantially consistent with the Employee's business
travel obligations immediately prior to a Change in Control;

         (d) the failure by the Company to pay to the Employee any portion of
the Employee's current compensation except pursuant to an across-the-board
compensation deferral similarly affecting all individuals having a similar level
of authority and responsibility with the Company and all individuals having a
similar level of authority and responsibility with any Person in control of the
Company, or to pay to the Employee any portion of an installment of deferred
compensation under any deferred compensation program of the Company, within
seven (7) days of the date such compensation is due;

         (e) the failure by the Company to continue in effect any compensation
plan in which the Employee participates immediately prior to the Change in
Control which is material to the Employee's total compensation, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Company to
continue the Employee's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms of the
amount or timing of payment of benefits provided and the level of the Employee's
participation relative to other participants, as existed immediately prior to
the Change in Control;

         (f) the failure by the Company to continue to provide the Employee with
benefits substantially similar to those enjoyed by the Employee under any of the
Company's pension, savings, life insurance, medical, health and accident, or
disability plans in which the Employee was participating immediately prior to
the Change in Control (except for across the board changes similarly affecting
all individuals having a similar level of authority and responsibility with the
Company and all individuals having a similar level of authority and
responsibility with any Person in control of the Company), the taking of any
other action by the Company which would directly or indirectly materially reduce
any of such benefits or deprive the Employee of any material fringe benefit or
Perquisite enjoyed by the Employee at the time of the Change in Control, or the
failure by the Company to provide the Employee with the number of paid vacation
days to which the Employee is entitled on the basis of years of service with the
Company in accordance with the Company's normal vacation policy in effect
immediately prior to the time of the Change in Control; or

         (g) any purported termination of the Employee's employment which is not
effected pursuant to a notice of termination satisfying the requirements of
Section 6.1 hereof.

                  The Employee's right to terminate his employment for Good
         Reason shall not be affected by the Employee's incapacity due to
         physical or mental illness. The Employee's

                                       5
<PAGE>
         continued employment shall not constitute consent to, or a waiver of
         any rights with respect to, any act or failure to act constituting Good
         Reason hereunder.

                  For purposes of any determination regarding the existence of
         Good Reason, any claim by the Employee that Good Reason exists shall be
         presumed to be correct unless the Company establishes to the Committee
         by clear and convincing evidence that Good Reason does not exist. The
         Committee's determination regarding the existence of Good Reason shall
         be conclusive and binding upon all parties unless the Committee's
         determination is arbitrary and capricious.

                  "GROSS-UP PAYMENT" means the additional amount paid to a
         Participant pursuant to Section 4.4.

                  "HIGHEST BASE COMPENSATION" means the Participant's annualized
         Base Compensation in effect immediately prior to (1) a Change in
         Control, (2) the first event or circumstance constituting Good Reason,
         or (3) the Participant's Termination of Employment, whichever is
         greatest.

                  "INCUMBENT DIRECTOR" means -

                  (a) a member of the Board on the Effective Date; or

                  (b) an individual-

                           (1) who becomes a member of the Board after the
                  Effective Date;

                           (2) whose appointment or election by the Board or
                  nomination for election by Baker Hughes' stockholders is
                  approved or recommended by a vote of at least two-thirds of
                  the then serving Incumbent Directors (as defined herein); and

                           (3) whose initial assumption of service on the Board
                  is not in connection with an actual or threatened election
                  contest.

                  "MERGER" means a merger, consolidation or similar transaction.

                  "PARTICIPANT" means an individual who is eligible to
         participate in the Plan under the provisions of Section 3.

                  "PENSION PLAN" means the Baker Hughes Incorporated Pension
         Plan, as amended from time to time.

                  "PERQUISITES" means benefits such as any airline VIP club
         memberships; country club and/ or health club membership dues and
         expenses related to the use of the country club and/ or health club;
         supplemental life insurance; financial consulting; and office equipment
         for use in the home (e.g., cellular telephones, personal digital
         assistance, home computers and office accessories similar to the office
         accessories available to the Employee in his employment office and
         monthly Internet connection fees) that may be provided by the Company
         from time to time.

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<PAGE>
                  "PERSON" shall have the meaning ascribed to the term in
         Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
         14(d) thereof, including a "group" as defined in Section 13(d) thereof,
         except that the term shall not include (a) the Company or any of its
         Affiliates, (b) a trustee or other fiduciary holding Company securities
         under an employee benefit plan of the Company or any of its Affiliates,
         (c) an underwriter temporarily holding securities pursuant to an
         offering of those securities or (d) a corporation owned, directly or
         indirectly, by the stockholders of the Company in substantially the
         same proportions as their ownership of stock of the Company.

                  "PLAN" means the Baker Hughes Incorporated Change in Control
         Severance Plan, as it may be amended from time to time.

                  "POTENTIAL CHANGE IN CONTROL" shall be deemed to have occurred
         if the event set forth in any one of the following paragraphs shall
         have occurred:

                           (a) the Company enters into an agreement, the
                  consummation of which would result in the occurrence of a
                  Change in Control;

                           (b) the Company or any Person publicly announces an
                  intention to take or to consider taking actions which, if
                  consummated, would constitute a Change in Control;

                           (c) any Person becomes the Beneficial Owner, directly
                  or indirectly, of securities of the Company representing 15
                  percent or more of either the then outstanding shares of
                  common stock of the Company or the combined voting power of
                  the Company's then outstanding securities (not including in
                  the securities beneficially owned by such Person any
                  securities acquired directly from the Company or its
                  Affiliates); or

                           (d) the Board adopts a resolution to the effect that,
                  for purposes of the Plan, a Potential Change in Control has
                  occurred.

                  "RENEWAL DATE" shall have the meaning specified in the
         definition of the "Term of the Plan."

                  "SPECIFIED OWNER" means any of the following:

                  (a) Baker Hughes;

                  (b) an Affiliate of Baker Hughes;

                  (c) an employee benefit plan (or related trust) sponsored or
maintained by Baker Hughes or any Affiliate of Baker Hughes;

                  (d) a Person that becomes a Beneficial Owner of Baker Hughes'
outstanding Voting Securities representing 30 percent or more of the combined
voting power of Baker Hughes' then outstanding Voting Securities as a result of
the acquisition of securities directly from Baker Hughes and/or its Affiliates;
or

                                       7
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                  (e) a Person that becomes a Beneficial Owner of Baker Hughes'
outstanding Voting Securities representing 30 percent or more of the combined
voting power of Baker Hughes' then outstanding Voting Securities as a result of
a Merger if the individuals and Entities who were the Beneficial Owners of the
Voting Securities of Baker Hughes outstanding immediately prior to such Merger
own, directly or indirectly, at least 50 percent of the combined voting power of
the Voting Securities of any of Baker Hughes, the surviving Entity or the parent
of the surviving Entity outstanding immediately after such Merger in
substantially the same proportions as their ownership of the Voting Securities
of Baker Hughes outstanding immediately prior to such Merger.

                  "SUPPLEMENTAL RETIREMENT PLAN" means the Baker Hughes
         Incorporated Supplemental Retirement Plan, as amended from time to
         time.

                  "TERM OF THE PLAN" means the period commencing on the
         Effective Date and ending on:

                  (a) the last day of the three-year period beginning on the
Effective Date if no Change in Control shall have occurred during that
three-year period (such last day being the "Expiration Date"); or

                  (b) if a Change in Control shall have occurred during (i) the
three-year period beginning on the Effective Date or (ii) any period for which
the Term of the Plan shall have been automatically extended pursuant to the
second sentence of this definition, the two-year period beginning on the date on
which the Change in Control occurred.

                  After the expiration of the time period described in
         subsection (a) of this definition and in the absence of a Change in
         Control (as described in subsection (b) of this definition) the Term of
         the Plan shall be automatically extended for successive two-year
         periods beginning on the day immediately following the Expiration Date
         (the beginning date of each successive two-year period being a "Renewal
         Date"), unless, not later than 18 months prior to the Expiration Date
         or applicable Renewal Date, the Company shall give notice to
         Participants that the Term of the Plan will not be extended.

                  "TERMINATION OF EMPLOYMENT" means the termination of an
         individual's employment relationship with the Company (i) by the
         Company without Cause after a Change in Control occurs, or (ii) by the
         individual for Good Reason after a Change in Control occurs.

                  For purposes of this definition, an individual's employment
         shall be deemed to have been terminated after a Change in Control, if
         (i) the individual's employment is terminated by the Company without
         Cause prior to a Change in Control (whether or not a Change in Control
         ever occurs) and 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) the
         individual terminates his employment for Good Reason prior to a Change
         in Control (whether nor not a Change in Control ever occurs) and the
         circumstance or event which constitutes Good Reason occurs at the
         request or direction of a Person who has entered into an agreement with
         the

                                       8
<PAGE>
         Company, the consummation of which would constitute a Change in
         Control; or (iii) the individual's employment is terminated by the
         Company without Cause or by the individual for Good Reason and 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). For purposes
         of any determination regarding the applicability of the immediately
         preceding sentence, any position taken by the Participant shall be
         presumed to be correct unless the Company establishes to the Committee
         by clear and convincing evidence that such position is not correct.

                  Termination of Employment does not include (i) a termination
         of employment due to the individual's death or Disability, or (ii) a
         termination of employment by the individual without Good Reason.

                  "THRIFT PLAN" means the Baker Hughes Incorporated Thrift Plan,
         as amended from time to time.

                  "VOTING SECURITIES" means the outstanding securities entitled
         to vote generally in the election of directors or other governing body.

         2.2 NUMBER AND GENDER. As used in the Plan, unless the context
otherwise expressly requires to the contrary, references to the singular include
the plural, and vice versa; references to the masculine include the feminine and
neuter; references to "including" mean "including (without limitation)"; and
references to Sections and clauses mean the sections and clauses of the Plan.

         2.3 HEADINGS. The headings of Sections herein are included solely for
convenience, and if there is any conflict between such headings and the text of
the Plan, the text shall control.

3.       ELIGIBILITY

         The individuals who shall be eligible to participate in the Plan shall
be those Employees who are selected by the Committee. The Committee shall notify
an Employee who has been selected for participation of his eligibility to
participate in the Plan by furnishing him a written notification of
participation that specifies whether he is a Level 1 or Level 2 executive for
purposes of the Plan.

         Notwithstanding any other provision of the Plan, an Employee shall not
be eligible to participate in the Plan if there is in effect an individual
severance agreement (including an employment agreement that provides for
severance benefits) or change in control agreement between the Employee and the
Company.

         Notwithstanding any other provision of the Plan, the Board may
discontinue an individual's eligibility to participate in the Plan by providing
him written advance notice (the "Notice"), no later than 18 months prior to the
Expiration Date or a Renewal Date (as defined in the definition of "Term of the
Plan" in Section 2.1), that he shall no longer participate in the Plan;
provided, however, that should a Change in Control occur during such 18-month
advance

                                       9
<PAGE>
notification period, the Notice shall be void and of no effect, and the
Participant shall be eligible to participate in the Plan as if the Notice were
never given.

4.       BENEFITS

         4.1 EQUITY BASED COMPENSATION. Upon the occurrence of a Change in
Control, all options to acquire Baker Hughes stock, all shares of restricted
Baker Hughes stock, all other equity or phantom equity incentives and any awards
the value of which is determined by reference to or based upon the value of
Baker Hughes stock, held by the Participant under any plan of the Company shall
become immediately vested, exercisable and nonforfeitable and all conditions
thereof (including, but not limited to, any required holding periods) shall be
deemed to have been satisfied.

         4.2 COMPENSATION AND BENEFITS DURING INCAPACITY AND PRIOR TO
TERMINATION OF EMPLOYMENT. Following a Change in Control and during the Term of
the Plan, during any period in which the Participant fails to perform the
Participant's full-time duties with the Company as a result of incapacity due to
physical or mental illness, the Company shall pay the Participant's full salary
to the Participant at the rate in effect at the commencement of any such period,
together with all compensation and benefits payable to the Participant under the
terms of any compensation or benefit plan, program or arrangement maintained by
the Company during such period, until the Participant's employment is terminated
by the Company for Disability.

         4.3 BENEFITS FOLLOWING TERMINATION OF EMPLOYMENT. If a Participant
incurs a Termination of Employment during the Term of the Plan, the Company
shall provide the Participant the benefits described below. Further details of
the benefits described in this Section 4.3 are provided in Exhibit A.

                  (a) SEVERANCE PAYMENT BASED UPON BASE COMPENSATION. The
Company will pay the Participant a cash severance benefit based on the
applicable multiple of the Employee's Highest Base Compensation. The "applicable
multiple" shall be determined in accordance with the relevant provisions of
Exhibit A. A Participant's severance payment under this paragraph (a) will be
paid in accordance with the provisions of Section 5.

                  (b) SEVERANCE PAYMENT BASED UPON BONUSES. The Company will pay
the Participant a cash severance benefit in an amount equal to the sum of (1)
and (2) where (1) is an amount equal to the product of (A) the expected value
target percentage under the Participant's Bonus for the Baker Hughes' fiscal
year in which the Participant's Termination of Employment occurs, (B) the
Participant's Highest Base Compensation and (C) a fraction, the numerator of
which is the number of full months and any fractional portion of a month during
the performance period through the Participant's Employment Termination Date and
the denominator of which is the total number of months during such performance
period; and (2) is an amount equal to the product of (A) the expected value
target percentage under the Participant's Bonus for the Baker Hughes' fiscal
year in which the Participant's Termination of Employment occurs, (B) the
Participant's Highest Base Compensation and (C) the applicable multiple
determined in accordance with the relevant provisions of Exhibit A. However, if
the Participant's Employment Termination Date occurs during the same calendar
year in which a Change in Control occurs, the pro-rata bonus payment described
in clause (1) of the preceding

                                       10
<PAGE>
sentence shall be offset by any payments received by the Participant under the
Baker Hughes Incorporated 1995 Employee Annual Incentive Compensation Plan in
connection with the Change in Control. A Participant's severance payment under
this paragraph (b) will be paid in accordance with the provisions of Section 5.

                  (c) OUTPLACEMENT. The Company will provide the Participant
outplacement services suitable to the Participant's position for the period of
time specified in the relevant provisions of Exhibit A. In lieu of such
outplacement services, if the Participant so elects, the Company shall pay the
Participant in cash the amount specified in the relevant provisions of Exhibit
A. Any such cash payment in lieu of outplacement services will be paid in
accordance with the provisions of Section 5.

                  (d) PENSION, THRIFT AND SUPPLEMENTAL RETIREMENT PLANS. In
addition to the retirement benefits to which the Participant is entitled under
the Thrift Plan, the Pension Plan and the Supplemental Retirement Plan, the
Company shall pay the Participant a single sum cash payment in an amount equal
to the undiscounted value of (A) the employer-provided accruals under the
Pension Plan that the Participant would have earned and (B) the employer
contributions the Company would have made to the Thrift Plan and the
Supplemental Retirement Plan (including but not limited to matching and base
contributions) on behalf of the Participant had the Participant continued in the
employ of the Company for a period of time determined in accordance with the
relevant provisions of Exhibit A, assuming for this purpose that (i) the
Participant's earned compensation per year during the relevant period of time
provided in Exhibit A is the sum of (1) the Participant's Highest Base
Compensation and (2) the product of (A) the expected value target percentage
under the Participant's Bonus for the Baker Hughes' fiscal year in which the
Participant's Termination of Employment occurs, (B) the Participant's Highest
Base Compensation, and (C) is the applicable multiple specified in Exhibit A for
purposes of paragraph (b) of this Section 4.3; and (ii) contribution, deferral,
credit and accrual percentages made under the Pension Plan, the Thrift Plan and
the Supplemental Retirement Plan, by and on behalf of the Participant during the
relevant period of time provided in Exhibit A, are the same percentages in
effect on the date of the Change in Control or the Participant's Employment
Termination Date, whichever is more favorable for the Participant. The payment
required under this paragraph (d) will be made in accordance with the provisions
of Section 5.

                  (e) ACCIDENT AND HEALTH INSURANCE BENEFITS. For the period of
time following the Participant's Employment Termination Date specified in
Exhibit A (the "Continuation Period"), the Company shall arrange to provide the
Participant and his dependents accident and health insurance benefits, in each
case, substantially similar to those provided to the Participant and his
dependents immediately prior to the Employment Termination Date or, if more
favorable to the Participant, those provided to the Participant and his
dependents immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, at no greater cost to the Participant than the cost to
the Participant immediately prior to such date or occurrence. Benefits otherwise
receivable by the Participant pursuant to this Section 4.3(f) shall be reduced
to the extent benefits of the same type are received by or made available to the
Participant during the Continuation Period (and any such benefits received by or
made available to the Participant shall be reported to the Company by the
Participant); provided, however, that the Company shall reimburse the
Participant for the excess, if any, of the cost of such benefits to

                                       11
<PAGE>
the Participant over such cost immediately prior to the Employment Termination
Date or, if more favorable to the Participant, the first occurrence of an event
or circumstance constituting Good Reason.

                  (f) LIFE INSURANCE. A Participant shall be entitled to a
single sum cash payment in an amount equivalent to the product of (1) the
monthly basic life insurance premium applicable to the Participant's basic life
insurance coverage on his Employment Termination Date and (2) the period of time
determined in accordance with the relevant provisions of Exhibit A. The single
sum cash payment will be made in accordance with the provisions of Section 5. A
Participant may, at his option, convert his basic life insurance coverage to an
individual policy after his Employment Termination Date by completing the forms
required by the Company.

                  (g) PERQUISITES. A Participant shall be entitled to a single
sum cash payment which shall be an amount equal to the sum of (1) the cost of
the Participant's Perquisites in effect prior to his Termination of Employment
for the remainder of the calendar year in which the Employment Termination Date
occurs; plus (2) the cost of the Participant's Perquisites in effect prior to
his Termination of Employment for an additional period of time determined in
accordance with the relevant provisions of Exhibit A. The payment required under
this paragraph (f) will be made in accordance with the provisions of Section 5.
A Participant may, at his option, purchase any of his club memberships held in
the Company's name for fair market value and on the terms mutually agreed by the
Participant and the Committee.

                  (h) RETIREE MEDICAL. If the Participant would have become
entitled to benefits under the Company's post-retirement health care insurance
plans, as in effect immediately prior to the Employment Termination Date or, if
more favorable to the Participant as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason, had the
Participant's employment terminated at any time during the period of thirty-six
(36) months after the Employment Termination Date, the Company shall provide
such post-retirement health care insurance benefits to the Participant and the
Participant's dependents commencing on the later of (i) the date on which such
coverage would have first become available and (ii) the date on which the
applicable benefits described in paragraph (e) of this Section 4.3 terminate.

         4.4      TAX GROSS-UP PAYMENTS.

                  If any payments or benefits received or to be received by the
         Participant (whether pursuant to the terms of the Plan, or any other
         plan or agreement with the Company, any Person whose actions result in
         a Change in Control or any Person affiliated with the Company or such
         Person) (such payments or benefits, excluding the Gross-Up Payment,
         being hereinafter referred to as the "Total Payments") will be subject
         to the Excise Tax, the Company shall pay the Participant an additional
         amount (the "Gross-Up Payment") such that the net amount retained by
         the Participant after the deduction of any Excise Tax on the Total
         Payments and any federal, state and local income and employment taxes
         and Excise Tax upon the Gross-Up Payment shall be equal to the Total
         Payments. The purpose of this Section is to place the Participant in
         the same economic position such

                                       12
<PAGE>
         Participant would have been in had no Excise Tax been imposed with
         respect to the Total Payments.

                  For purposes of determining whether any of the Total Payments
         will be subject to the Excise Tax and the amount of such Excise Tax,

                  (i) all of the Total Payments shall be treated as "parachute
payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the
opinion of tax counsel (the "Tax Counsel") reasonably acceptable to the
Participant and selected by the accounting firm which was, immediately prior to
the Change in Control, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the Code,

                  (ii) all "excess parachute payments" within the meaning of
section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax
unless, in the opinion of the Tax Counsel, such excess parachute payments (in
whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of
the "base amount" (within the meaning of section 280G(b)(3) of the Code)
allocable to such reasonable compensation, or are otherwise not subject to the
Excise Tax, and

                  (iii) the value of any noncash benefits or any deferred
payment or benefit shall be determined by the Auditor in accordance with the
principles of sections 280G(d)(3) and (4) of the Code.

                  For purposes of determining the amount of the Gross-Up
         Payment, the Participant shall be deemed to pay federal income tax at
         the highest marginal rate of federal income taxation in the calendar
         year in which the Gross-Up Payment is to be made and state and local
         income taxes at the highest marginal rate of taxation in the state and
         locality of the Participant's residence on the Employment Termination
         Date (or if there is no Employment Termination Date, then the date on
         which the Gross-Up Payment is calculated for purposes of this Section
         4.4), net of the maximum reduction in federal income taxes which could
         be obtained from deduction of such state and local taxes.

                  In the event that the Excise Tax is finally determined to be
         less than the amount taken into account hereunder in calculating the
         Gross-Up Payment, the Participant shall repay to the Company, within
         ten (10) business days following the time that the amount of such
         reduction in the Excise Tax is finally determined, the portion of the
         Gross-Up Payment attributable to such reduction (plus that portion of
         the Gross-Up Payment attributable to the Excise Tax and federal, state
         and local income and employment taxes imposed on the Gross-Up Payment
         benefit being repaid by the Participant, to the extent that such
         repayment results in a reduction in the Excise Tax and a
         dollar-for-dollar reduction in the Participant's taxable income and
         wages for purposes of federal, state and local income and employment
         taxes), plus interest on the amount of such repayment at 120 percent of
         the rate provided in section 1274(b)(2)(B) of the Code. In the event
         that the Excise Tax is determined to exceed the amount taken into
         account hereunder in calculating the Gross-Up Payment (including by
         reason of any payment the existence or

                                       13
<PAGE>
         amount of which cannot be determined at the time of the payment of the
         Gross-Up Payment), the Company shall make an additional Gross-Up
         Payment in respect of such excess (plus any interest, penalties or
         additions payable by the Participant with respect to such excess)
         within five (5) business days following the time that the amount of
         such excess is finally determined. The Participant and the Company
         shall each reasonably cooperate with the other relative to any
         administrative or judicial proceedings concerning the existence or
         amount of liability for the Excise Tax.

         4.5 LEGAL FEES. The Company shall pay, on a fully grossed up, after tax
basis, all legal fees and expenses incurred by the Participant (i) in disputing
in good faith any issue relating to the Participant's termination of employment,
(ii) in seeking in good faith to obtain or enforce any benefit or right provided
under the Plan in accordance with Section 11.5, or (iii) in connection with any
tax audit or proceeding to the extent attributable to the application of section
4999 of the Code to any payment or benefit under the Plan. Such payments shall
be made within ten (10) business days after delivery of the Participant's
written request for payment accompanied with such evidence of fees and expenses
incurred as the Company may reasonably require.

5.       TIME OF BENEFITS PAYMENTS

         The Company shall pay the Participant any cash benefits described in
paragraphs (a), (b), (c) (if the Participant elects to receive a cash payment in
lieu of outplacement services), (d), (e) and (f) of Section 4.3 in a single sum
cash payment within thirty (30) days after the Participant's Employment
Termination Date. If it is subsequently determined that additional monies are
due and payable to the Participant as benefits described in paragraphs (a), (b),
(c) (if the Participant elects to receive a cash payment in lieu of outplacement
services), (d) and (f) of Section 4.3, the Company will pay any such unpaid
benefits to the Participant, together with interest on the unpaid benefits from
the date the single sum cash payment was made at the annual rate of 120 percent
of the rate provided in section 1274(b)(2)(B) of the Code, within ten (10)
business days of discovering that the additional monies are due and payable. If
the benefits paid to the Participant are subsequently determined to exceed the
amount of benefits the Participant should have received, such excess shall
constitute a loan by the Company to the Participant, payable within ten (10)
business days after demand by the Company, together with interest from the date
the single sum cash payment was made at the annual rate of 120 percent of the
rate provided in section 1274(b)(2)(B) of the Code, but only to the extent such
amount has not been previously paid by the Participant.

6.       TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE

         6.1 NOTICE OF TERMINATION. After a Change in Control and during the
Term of the Plan, any purported termination of the Participant's employment by
the Company shall be communicated by the Company by a written Notice of
Termination to the Participant in accordance with Section 11.8 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in the Plan relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Participant's employment under the
provision so indicated. Further, a Notice of Termination for Cause is required
to include a copy of a resolution duly

                                       14
<PAGE>
adopted by the affirmative vote of not less than three-quarters (3/4) of the
entire membership of the Board at a meeting of the Board which was called and
held for the purpose of considering such termination (after reasonable notice to
the Participant and an opportunity for the Participant, together with the
Participant's counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Participant was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and specifying the
particulars thereof in detail. No purported termination of the Participant's
employment by the Company after a Change in Control and during the Term of the
Plan shall be effective unless the Company complies with the procedures set
forth in this Section 6.1.

         6.2 EMPLOYMENT TERMINATION DATE. "Employment Termination Date," with
respect to any purported termination of the Participant's employment after a
Change in Control and during the Term of the Plan, shall mean (i) if the
Participant's employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Participant shall not have
returned to the full-time performance of the Participant's duties during such
thirty (30) day period), and (ii) if the Participant's employment is terminated
for any other reason, the date specified in the Notice of Termination (which, in
the case of a termination by the Company, shall not be less than thirty (30)
days (except in the case of a termination for Cause) and, in the case of a
termination by the Participant, shall not be less than fifteen (15) days nor
more than sixty (60) days, respectively, from the date such Notice of
Termination is given).

         6.3 DISPUTE CONCERNING TERMINATION. If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Employment
Termination Date (as determined without regard to this Section 6.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Employment Termination Date shall be
extended until the earlier of (i) the date on which the Term of the Plan ends or
(ii) the date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of an
arbitrator or a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that the Employment Termination Date shall
be extended by a notice of dispute given by the Participant only if such notice
is given in good faith and the Participant pursues the resolution of such
dispute with reasonable diligence.

         6.4 COMPENSATION DURING DISPUTE. If a purported termination occurs
following a Change in Control and during the Term of the Plan and the Employment
Termination Date is extended in accordance with Section 6.3 hereof, the Company
shall continue to pay the Participant the full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
salary) and continue the Participant as a participant in all compensation,
benefit and insurance plans in which the Participant was participating when the
notice giving rise to the dispute was given or those plans in which the
Participant was participating immediately prior to the first occurrence of an
event or circumstance giving rise to the Notice of Termination, if more
favorable to the Participant, until the Employment Termination Date, as
determined in accordance with Section 6.3 hereof. Amounts paid under this
Section 6.4 are in addition to all other amounts due under the Plan (other than
those due under Section 4.2 hereof) and shall not be offset against or reduce
any other amounts due under the Plan.

                                       15
<PAGE>
7.       WITHHOLDING

         Subject to the provisions of Section 4.4, Company may withhold from any
benefits paid under the Plan all income, employment, and other taxes required to
be withheld under applicable law.

8.       DEATH OF PARTICIPANT

         If a Participant dies after his Employment Termination Date but before
the Participant receives full payment of the benefits to which he is entitled,
any unpaid benefits will be paid to the Participant's surviving spouse, or if
the Participant does not have a surviving spouse, to the Participant's estate.

9.       AMENDMENT AND TERMINATION

         During the Term of the Plan, the Plan may not be terminated or amended
in any manner that would negatively affect a Participant's rights under the
Plan. Further, no amendment or termination of the Plan after a Participant's
Employment Termination Date shall affect the benefits payable to such
Participant. Subject to the foregoing restrictions, Baker Hughes may amend or
terminate the Plan by a written instrument that is authorized by the Committee.

10.      ADOPTION OF PLAN BY OTHER EMPLOYERS

                  (a) With the written approval of the Committee, any entity
that is an Affiliate may adopt the Plan by appropriate action of its board of
directors or noncorporate counterpart, as evidenced by a written instrument
executed by an authorized officer of such entity or an executed adoption
agreement (approved by the board of directors or noncorporate counterpart of the
Affiliate), agreeing to be bound by all the terms, conditions and limitations of
the Plan and providing all information required by the Committee.

                  (b) The provisions of the Plan shall apply separately and
equally to each adopting Affiliate and its employees in the same manner as is
expressly provided for the Company and its employees, except that the power to
appoint the Committee and the power to amend or terminate the Plan shall be
exercised by Baker Hughes.

                  (c) For purposes of the Code and ERISA, the Plan as adopted by
the Affiliates shall constitute a single plan rather than a separate plan of
each Affiliate.

11.      MISCELLANEOUS

         11.1 PLAN NOT AN EMPLOYMENT CONTRACT. The adoption and maintenance of
the Plan is not a contract between the Company and its employees that gives any
employee the right to be retained in its employment. Likewise, it is not
intended to interfere with the rights of the Company to terminate an employee's
employment at any time with or without notice and with or without cause or to
interfere with an employee's right to terminate his employment at any time.

         11.2 ALIENATION PROHIBITED. No benefits hereunder shall be subject to
anticipation or assignment by a Participant, to attachment by, interference
with, or control of any creditor of a

                                       16
<PAGE>
Participant, or to being taken or reached by any legal or equitable process in
satisfaction of any debt or liability of a Participant prior to its actual
receipt by the Participant. Any attempted conveyance, transfer, assignment,
mortgage, pledge, or encumbrance of the benefits hereunder prior to payment
thereof shall be void.

         11.3 SEVERABILITY. Each provision of the Plan may be severed. If any
provision is determined to be invalid or unenforceable, that determination shall
not affect the validity or enforceability of any other provision.

         11.4 BINDING EFFECT. The Plan shall be binding upon any successor of
the Company. Further, the Board shall not authorize a Change in Control that is
a merger or a sale transaction unless the purchaser or the Company's successor
agrees to take such actions as are necessary to cause all Participants to be
paid or provided all benefits due under the terms of the Plan as in effect
immediately prior to the Change in Control.

         11.5 SETTLEMENT OF DISPUTES CONCERNING BENEFITS UNDER THE PLAN;
ARBITRATION. All claims by a Participant for benefits under the Plan shall be
directed to and determined by the Committee and shall be in writing. Any denial
by the Committee of a claim for benefits under the Plan shall be delivered to
the Participant in writing within thirty (30) days after written notice of the
claim is provided to the Company in accordance with Section 11.9 and shall set
forth the specific reasons for the denial and the specific provisions of the
Plan relied upon. The Committee shall afford a reasonable opportunity to the
Participant for a review of the decision denying a claim and shall further allow
the Participant to appeal to the Committee a decision of the Committee within
sixty (60) days after notification by the Committee that the Participant's claim
has been denied. Any further dispute or controversy arising out of or relating
to the Plan, including without limitation, any and all disputes, claims (whether
in tort, contract, statutory or otherwise) or disagreements concerning the
interpretation or application of the provisions of the Plan shall be resolved by
arbitration in accordance with the rules of the American Arbitration Association
(the "AAA") then in effect. No arbitration proceeding relating to the Plan may
be initiated by either the Company or the Participant unless the claims review
and appeals procedures specified in Section 14 have been exhausted. Within ten
(10) business days of the initiation of an arbitration hereunder, the Company
and the Participant will each separately designate an arbitrator, and within
twenty (20) business days of selection, the appointed arbitrators will appoint a
neutral arbitrator from the AAA Panel of Commercial Arbitrators. The arbitrators
shall issue their written decision (including a statement of finding of facts)
within thirty (30) days from the date of the close of the arbitration hearing.
The decision of the arbitrators selected hereunder will be final and binding on
both parties. This arbitration provision is expressly made pursuant to and shall
be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16 (or
replacement or successor statute). Pursuant to Section 9 of the Federal
Arbitration Act, the Company and any Participant agree that a judgment of the
United States District Court for the District in which the headquarters of Baker
Hughes is located at the time of initiation of an arbitration hereunder may be
entered upon the award made pursuant to the arbitration.

         11.6 GUARANTY OF PAYMENT, PERFORMANCE, AND OBSERVANCE BY BAKER HUGHES.
Baker Hughes hereby unconditionally guarantees to Participant the due, prompt
and punctual payment, performance and observance by the Company, and its
successors and assigns

                                       17
<PAGE>
(collectively, the "Obligor"), of the Obligor's obligations under the Plan
(collectively, the "Guaranteed Obligations"), including, but not limited to, (i)
the due, prompt and punctual payment of each and all amounts that the Company
shall become obligated to pay under the Plan, as and when the same shall become
due and payable hereunder, and (ii) the due, prompt and punctual performance and
observance by the Company of each term, provision and condition the Company is
required to perform or observe under the Plan, as and when the same shall be
required to be performed or observed hereunder. In any case of the failure of
the Obligor to punctually pay, perform or observe any of the Guaranteed
Obligations, Baker Hughes agrees to promptly cause to be promptly paid,
performed or observed such Guaranteed Obligation as and when such Guaranteed
Obligation is required to be paid, performed or observed. Baker Hughes agrees
that its obligations hereunder shall be as if it were the principal obligor and
not merely a surety, and shall be absolute and unconditional, irrespective of,
and shall be unaffected by, any invalidity, irregularity or unenforceability of
any provision of the Plan, or any waiver, modification or indulgence granted to
the Obligor with respect thereto, by the Participant, or any other circumstance
that may otherwise constitute a legal or equitable discharge of a surety or
guarantor. Baker Hughes hereby waives diligence, presentment, demand, any right
to require a proceeding first against the Obligor, and all demands whatsoever,
and covenants that its obligations under the Plan will not be discharged except
by payment, performance and observance in full of all of the Guaranteed
Obligations. The agreements of Baker Hughes hereunder shall inure to the benefit
of and be enforceable by Participant's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.

         11.7 NO MITIGATION. The Company agrees that if the Participant's
employment with the Company terminates during the Term of the Plan, the
Participant is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Participant by the Company pursuant to the
Plan. Further, except as expressly provided otherwise herein, the amount of any
payment or benefit provided for in the Plan (other than Section 4.3(f) hereof)
shall not be reduced by any compensation earned by the Participant as the result
of employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Participant to the Company, or otherwise.

         11.8 OTHER AMOUNTS DUE. Except as expressly provided otherwise herein,
the payments and benefits provided for in the Plan are in addition to and not in
lieu of amounts and benefits that are earned by a Participant prior to his
Termination of Employment. The Company shall pay a Participant any compensation
earned through the Employment Termination Date but not previously paid the
Participant. Further the Participant shall be entitled to any other amounts or
benefits due the Participant in accordance with any contract, plan, program or
policy of the Company or any of its Affiliates. Amounts that the Participant is
entitled to receive under any plan, program, contract or policy of the Company
or any of its Affiliates at or subsequent to the Participant's Termination of
Employment shall be payable or otherwise provided in accordance with such plan,
program, contract or policy, except as expressly modified herein.

         11.9 NOTICES. For the purpose of the Plan, notices and all other
communications provided for in the Plan shall be in writing and shall be deemed
to have been duly given when delivered or mailed by United States registered
mail, return receipt requested, postage prepaid, addressed, if to the
Participant, to the residential address listed on the Participant's notification
of participation and, if to the Company, to 3900 Essex Lane; Houston, Texas
77027; Attention:

                                       18
<PAGE>
General Counsel, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt.

         11.10 GOVERNING LAW. All provisions of the Plan shall be construed in
accordance with the laws of Texas, except to the extent preempted by federal law
and except to the extent that the conflicts of laws provisions of the State of
Texas would require the application of the relevant law of another jurisdiction,
in which event the relevant law of the State of Texas will nonetheless apply,
with venue for litigation being in Houston, Texas.





                                       19
<PAGE>
         IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer this ____ day of December, 2003.



                                         BAKER HUGHES INCORPORATED

                                         By:
                                            ------------------------------------
                                         Title:
                                               ---------------------------------






                                       20
<PAGE>
                            INTERNATIONAL SUPPLEMENT

1.    GENERAL. The provisions of this Supplement apply to individuals who are
      Non-US Employees (as defined below). The provisions of the Plan apply to
      Non-US Employees, except to the extent this Supplement modifies the
      provisions of the Plan.

      The purpose of this Supplement is to provide for severance benefits for
      Non-US Employees in the event of a Termination of Employment.

      Capitalized terms used in this Supplement which are defined in the Plan
      have the same meaning in this Supplement unless such terms are defined
      differently for purposes of this Supplement. The definition of terms
      defined in this Supplement apply only to this Supplement and not to other
      parts of the Plan.

2.    DEFINITIONS. Section 2.1 of the Plan is modified to add the following
      definitions to read as follows:

            "NON-US EMPLOYEE" means an individual (i) employed in the services
            of the Company on the active payroll where the operations or
            principal place of business of the individual's employment is
            located outside of the United States and (ii) who is also an
            executive salary grade system employee (under the Company's then
            current payroll system categories), or any comparable executive
            designations in any system that replaces such salary grade system.
            Notwithstanding the foregoing, the Committee may from time to time
            designate other individuals who may be eligible to participate in
            the Plan.

            "NON-US PARTICIPANT" means a Non-US Employee who is eligible to
            participate in the Plan.

3.    REFERENCES. References in the Plan to "Employees" and "Participants" are
      deemed to be references to "Non-US Employees" and "Non-US Participants,"
      respectively.


4.    BENEFITS.

         Section 4.3 shall be modified in the first paragraph to read as
follows:

         "Upon the occurrence of a Change in Control, the Company shall provide
         a Non-US Participant who has satisfied the eligibility requirements of
         Section 3 such severance benefits under the Plan as the Committee
         determines in accordance with the provisions of Exhibit A, taking into
         consideration any prohibitions or restrictions and any statutorily
         mandated severance benefits applicable to the Non-US Participant, with
         the intent of providing the Non-US Participant benefits that are
         generally comparable to the benefits provided to Participants under the
         Plan. It is the express intent of the Company that any benefits paid to
         a Non-US Participant under this Supplement and the Plan will be in lieu
         of any statutorily-mandated severance benefits (or other employment
         termination related benefits), including, but not limited to, gratuity
         and similar benefits.

                                       21
<PAGE>
                                                                       EXHIBIT A
                            BAKER HUGHES INCORPORATED

                        CHANGE IN CONTROL SEVERANCE PLAN

               SCHEDULE OF POST-TERMINATION OF EMPLOYMENT BENEFITS

                  The benefits described in this Schedule are summaries
         only. Each benefit is fully described in the Plan. In the
         event of a conflict between the provisions of the Plan and
         this Exhibit A, the terms of the Plan shall govern.


<Table>
<Caption>
                 BENEFIT                      DETAILS OF BENEFIT
                 -------                      ------------------
<S>      <C>                                  <C>
1.       SEVERANCE PAYMENT
         BASED UPON BASE COMPENSATION

               Level                          3 years (equivalent of 36 months) of Highest Base
                                              Compensation

               Level 2                        2 years (equivalent of 24 months) of Highest Base
                                              Compensation




2.       SEVERANCE PAYMENT                    Based on the "Expected Value" (EV) target percentage
         BASED UPON BONUSES                   under the Participant's Bonus for the Termination
                                              of Employment year prorated to the Participant's
                                              Employment Termination Date, plus an additional
                                              sum which is the product of:

                                              (A) EV target percentage under the Participant's
                                              Bonus for the Termination of Employment year,
                                              multiplied by

                                              (B) Participant's Highest Base Compensa tion, and
                                              multiplied by either

               Level 1                        (C)  3

               Level 2                             2
</TABLE>


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<PAGE>
                                                                       EXHIBIT A
<Table>
<S>      <C>                                  <C>
3.       OUTPLACEMENT

               Level 1                        3 years; or, if the Participant elects to receive
                                              a cash payment in lieu of outplacement, $30,000

               Level 2                        2 years; or, if the Participant elects to receive
                                              a cash payment in lieu of outplacement, $20,000

4.       PERFORMANCE AWARDS                   Equity based performance awards are immediately
                                              vested and exercisable and all conditions thereof
                                              are deemed satisfied.

5.       LOST BENEFITS UNDER PENSION,         An amount equal to the undiscounted value of the
         THRIFT AND SUPPLEMENTAL              employer-provided accruals and credits the
         RETIREMENT PLANS                     Participant would have earned under the Pension
                                              Plan, the Thrift Plan and the Supplemental
                                              Retirement Plan for the following period after
                                              the Participant's Employment Termination Date
                                              had he continued to participate thereunder:

               Level 1                        3 years

               Level 2                        2 years



6.       ACCIDENT AND HEALTH INSURANCE        Coverage for the following time period:

               Level 1                        36 months

               Level 2                        24 months

7.       LIFE INSURANCE                       Payment of the monthly premium amount for the
                                              basic life insurance coverage the Participant had
                                              at his Employment Termination Date multiplied by
                                              the following:

               Level 1                        36

               Level 2                        24
</TABLE>


                                              23
<PAGE>
                                                                       EXHIBIT A
<Table>
<S>      <C>                                  <C>
8.       PERQUISITES                          An amount equal to (i) the cost of the
                                              Participant's Perquisites for the remainder of
                                              the calendar year in which the Employment
                                              Termination Date occurs and (ii) the cost of the
                                              Participant's Perquisites for the following
                                              additional time period:

               Level 1                        36 months

               Level 2                        24 months

9.       TAX GROSS-UP PAYMENT                 An amount such that after the payment of (i) any
                                              Excise Taxes due on the Benefits and other
                                              benefits or payments, (ii) any federal, state and
                                              local income and employment taxes on the
                                              Benefits, and (iii) any Excise Tax on the
                                              Gross-Up Payment benefit, the net amount retained
                                              by the Participant shall be equal to the gross
                                              amount of the Benefits prior to such deductions.

10.      LEGAL FEES                           Legal fees and expenses incurred by the Participant
                                              (i) in disputing in good faith any issue relating
                                              to the Participant's termination of employment,
                                              (ii) in seeking in good faith to obtain or
                                              enforce any Benefit or right provided under the
                                              Plan, or (iii) in connection with any tax audit
                                              or proceeding to the extent attributable to the
                                              application of section 4999 of the Code to the
                                              payment of the Benefits or other benefits or
                                              payments.
</Table>


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