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                                                                   EXHIBIT 10.12

[BAKER HUGHES LOGO]

                  POLICY:     BAKER HUGHES INCORPORATED
                              EXECUTIVE SEVERANCE POLICY

APPROVED:         PRESIDENT                        EFFECTIVE:         01-01-2000
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         POLICY:              Baker Hughes Incorporated ("BHI")
                              Executive Severance Policy (the "Policy")

         SCOPE:               This policy covers all U.S. based Executive Salary
                              Grade System employees (the "Executives") of Baker
                              Hughes Incorporated, its divisions, subsidiaries
                              and BHI controlled affiliates (the "Company")

         PURPOSE:             To have a uniform Policy regarding severance
                              benefits for all U.S. based Company Executives on
                              the Executive Salary Grade System. This Policy is
                              intended to afford the specified Executives whose
                              employment is terminated for reasons specified
                              below an income stream for a fixed time period
                              while such Executives actively seek and obtain
                              gainful employment or become self employed.

         ELIGIBILITY:         Executives shall be eligible for the benefits
                              under this Policy if (1) their employment is
                              terminated because their position is eliminated,
                              or (2) their employment is terminated in
                              conjunction with an acquisition, merger, spin-off,
                              reorganization (either business or personnel),
                              facility closing or a discontinuance of operations
                              of the divisions in which such Executives are
                              employed. Executives shall not be eligible for the
                              benefits under this Policy if they are terminated
                              for any other reason, or if they resign or retire.
                              Executives shall not be eligible for the benefits
                              under this Policy if, in the event of an
                              acquisition or merger, they are offered a position
                              by BHI or the successor company at the same base
                              salary at a work location within fifty (50) miles
                              of their current work location.

         BENEFITS:            Eligible Executives shall be eligible for the
                              severance benefits as described in the "Settlement
                              Agreement and General Release". The duration of
                              these benefits is dependent upon the Executive's
                              salary band as shown below:

                              Salary Band              No. of Months
                              -----------              ---------
                              1                             9
                              2                            12
                              3 - 5                        15
                              6 - 8                        18



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[BAKER HUGHES LOGO]

                  POLICY:     BAKER HUGHES INCORPORATED
                              EXECUTIVE SEVERANCE POLICY

APPROVED:         PRESIDENT                        EFFECTIVE:         01-01-2000
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  REQUIREMENTS:               In order to receive the benefits described in the
                              Settlement Agreement and General Release, an
                              Executive must agree to the terms and conditions
                              of that document with the execution of their
                              signature.

  MISCELLANEOUS:              The Company is an "employment at will" employer.
                              Employees have the right to resign their positions
                              "at will" and the Company has the right to
                              terminate an employee "at will" with or without
                              notice of cause. No employee's "at will" status
                              may be modified except in a written contract
                              executed by BHI's President.

                              The benefits described in this Policy shall be
                              interpreted and administered by BHI's Vice
                              President of Human Resources in accordance with
                              the terms and conditions of the various benefit
                              plans described in the Letter.

                              The benefits outlined in this Policy supersede,
                              negate and replace all other benefits the Company
                              has offered or may offer to other Company
                              employees including those offered by the division
                              where such Executives are employed.

                              The benefits under this Policy may be amended,
                              expanded or discontinued at any time at the sole
                              discretion of BHI with or without notice.


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[BAKER HUGHES LOGO]

                  POLICY:     BAKER HUGHES INCORPORATED
                              EXECUTIVE SEVERANCE POLICY

APPROVED:         PRESIDENT                        EFFECTIVE:         01-01-2000
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                    SETTLEMENT AGREEMENT AND GENERAL RELEASE

         FIRST: Employee's active employment with the Company will terminate on
    _____________, 20____ ("Effective Date"). At that time, Employee will be
    placed on a paid Leave of Absence for ___________ months. During this
    period, Employee will receive a salary of $_________ per month. Employee
    will receive this salary amount until the expiration of the period or until
    Employee obtains employment or becomes self employed ("Subsequent Employment
    Date"), whichever occurs first. If Employee obtains employment or becomes
    self employed during the paid Leave of Absence period and earns less than
    $___________ per month, Employee will continue to receive the difference
    between the amount earned and $___________per month until the expiration of
    the period.

         SECOND: During the paid Leave of Absence period, Employee will continue
    to be eligible for the group insurance programs on which Employee is
    currently enrolled as of the Effective Date. Such benefits will cease as of
    the expiration of the paid Leave of Absence period or as of the date other
    medical, dental, and life insurance becomes available following Employee's
    Subsequent Employment Date, whichever occurs first. Upon the termination of
    coverage under the Company's programs, Employee may be eligible to buy
    continuation coverage under the terms and for the period mandated by federal
    law. Coverage for short-term and long-term disability will not be extended
    to Employee after the Effective Date.

         THIRD: Employee may elect to continue to participate in the BHI
    Employee Thrift Plan and the BHI Employee Stock Purchase Plan until the
    expiration of the paid Leave of Absence period or until the Subsequent
    Employment Date, whichever comes first. All benefits, contributions or
    disbursements, if any, under such Plans will be paid to Employee in
    accordance with such Plans upon the expiration of the period or Subsequent
    Employment Date, whichever occurs first.

         FOURTH: If Employee was participating in the BHI Employee Stock Option
    Plan and/or the BHI Convertible Debenture Plan as of the Effective Date,
    such participation may continue until the expiration of the paid Leave of
    Absence period. No new options or debenture grants will be awarded to
    Employee after the Effective Date. Employee will be permitted to exercise or
    convert any option rights or convertible debenture rights awarded prior to
    the Effective Date for a period of up to three (3) months from the
    expiration of the paid Leave of Absence period, or the normal expiration
    date of these rights, whichever occurs first, but only to the extent that
    such rights are vested or convertible by the date of exercise. If any of
    Employee's convertible debentures remain unconverted at the end of the
    period in which they can be exercised, Company will prepay the debentures in
    accordance with the terms of such Plan.

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[BAKER HUGHES LOGO]

                  POLICY:     BAKER HUGHES INCORPORATED
                              EXECUTIVE SEVERANCE POLICY

APPROVED:         PRESIDENT                        EFFECTIVE:         01-01-2000
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         FIFTH: Employee's bonus for 20____ will be determined with reference to
    formal written objectives and paid in __________________, 20____. The bonus
    will be determined at the Company's sole discretion based on fiscal 20_____
    audited results.

         SIXTH: All payments by Company for Employee's club memberships or other
    perquisites will cease on the Effective Date. Employee has the option of
    purchasing Employee's club membership for the fair market value of such
    membership as determined by Company.

         SEVENTH: Employee will return to company all Company property in
    Employee's possession as of the Effective Date including but not limited to
    credit cards and documents of any kind.

         Employee will prepare and submit a final expense account reimbursement
    request for expenses incurred prior to the Effective Date. Such expense
    account reimbursement request will be reviewed and paid in accordance with
    company policy.

         Employee agrees and consents to allow Company to deduct from the paid
    Leave of Absence salary payments any amounts of money that Employee owes to
    Company.

         EIGHTH: Outplacement services will be provided to Employee at Company
    expense in accordance with Company policy.

         NINTH: The benefits described above supersede, negate and replace any
    other benefits offered by Company to Employee. This Agreement will be
    administered by BHI's Chief Administrative Officer who will also resolve any
    issues regarding the interpretation, implementation or administration of the
    benefits described above.

         TENTH: By executing this Agreement, Employee accepts the fact that
    Employee's relationship with the Company was "at-will employment" meaning
    that either Employee or Company could terminate the relationship with or
    without notice and with or without cause, at any time.

         ELEVENTH: Payment of the above described benefits is contingent upon
    the Employee executing and returning this Settlement Agreement and General
    Release to Company. Employee may take up to _________________ (___) days to
    consider this Agreement prior to executing it. Furthermore, Employee has a
    seven (7) day period after executing this Agreement during which time
    Employee may revoke Employee's consent to the Agreement, and this Agreement
    will not become effective or enforceable until such revocation period has
    expired.
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[BAKER HUGHES LOGO]

                  POLICY:     BAKER HUGHES INCORPORATED
                              EXECUTIVE SEVERANCE POLICY

APPROVED:         PRESIDENT                        EFFECTIVE:         01-01-2000
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         TWELFTH: This Agreement shall not in any way be construed as an
    admission by Company that it has acted wrongfully with respect to Employee
    or any other person, or that Employee has any rights whatsoever against
    Company, and Company specifically disclaims any liability to wrongful acts
    against Employee or any other person, on the part of itself, its employees
    or its agents.

         THIRTEENTH: Employee represents, understands and agrees that Employee's
    active employment with the Company has or will soon terminate and that
    Employee will not apply for or otherwise seek active employment or extended
    inactive employment with Company at any time.

         FOURTEENTH: Employee further agrees that during any period in which
    Employee is receiving benefits under this Agreement, Employee will not
    solicit or participate in or assist in any way in the solicitation or
    recruitment, directly or indirectly, of any Company employees or customers.
    In view of the nature of Employee's employment and the information and trade
    secrets which Employee has received during the course of Employee's
    employment with ____________________, Employee likewise agrees that Company
    would be irreparably harmed by any violation or threatened violation of this
    Agreement and that Company shall be entitled to injunctive relief
    prohibiting Employee from any violation or threatened violation of this
    Agreement.

         FIFTEENTH: As a material inducement for Company to enter into this
    Agreement, Employee hereby irrevocably and unconditionally releases, acquits
    and forever discharges Company and its affiliated companies and their
    directors, officers, employees and representatives, (collectively
    "Releasees") from any and all claims, liabilities, obligations, damages,
    causes of action, demands, costs, losses, and/or expenses (including
    attorneys fees), of any nature whatsoever, whether known or unknown,
    including but not limited to, rights arising out of alleged violations of
    any contracts, express or implied, any covenant of good faith and fair
    dealing, express or implied, or any tort, or any legal restrictions on the
    Company's right to terminate employees, or any federal, state or other
    governmental statute, regulation, or ordinance, including, without
    limitation, Title VII of the Civil Rights Act of 1964, and the Federal Age
    Discrimination in Employment Act, which Employee claims to have against any
    of the Releasees. In addition, Employee waives all rights and benefits
    afforded by any state laws which provide in substance that a general release
    does not extend to claims which a person does not know or suspect to exist
    in his favor at the time of executing the release which, if known by him,
    must have materially affected employee's settlement with the other person.
    The only exception to the foregoing are claims and rights that may arise
    after the date of execution of this Agreement.

         SIXTEENTH: Employee represents and acknowledges that in executing this
    Agreement Employee does not rely and has not relied upon any representation
    or statement, oral or written, not set forth herein, made by any of the
    Releasees or by any of the Releasees' agents, representatives or attorneys
    with regard to the subject matter, basis or effect of this Agreement or
    otherwise.


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[BAKER HUGHES LOGO]

                  POLICY:     BAKER HUGHES INCORPORATED
                              EXECUTIVE SEVERANCE POLICY

APPROVED:         PRESIDENT                        EFFECTIVE:         01-01-2000
--------------------------------------------------------------------------------

         SEVENTEENTH: This Agreement sets forth the entire agreement between the
    parties hereto, and fully supersedes any and all prior agreements or
    understandings, oral or written, between the parties hereto pertaining to
    the subject matter hereof.

         EIGHTEENTH: This Agreement shall be construed and interpreted in
    accordance with the laws of the State of Texas with venue for litigation
    being in Houston, Texas.

         NINETEENTH: The invalidity or unenforceability of a term or provision
    of this Agreement shall not affect the validity or enforceability of any
    other term or provision of this Agreement, which shall remain in full force
    and effect.

         TWENTIETH: Employee represents and agrees that Employee fully
    understands Employee's right to discuss all aspects of this Agreement with
    Employee's private attorney, that to the extent, if any, that employee
    desires, Employee has availed___________________________ of this right, that
    Employee has carefully read and fully understands all of the provisions of
    this Agreement and that Employee is voluntarily entering into this
    Agreement.

         TWENTY - FIRST: Employee acknowledges, by Employee's signature below,
    that Employee was given this Agreement on the ________day of
    _____________________, 20_____.



         PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN
    AND UNKNOWN CLAIMS. YOU MAY TAKE UP TO ________________ (____) DAYS FROM
    RECEIPT OF THIS AGREEMENT TO CONSIDER ITS TERMS BEFORE SIGNING IT. YOU ARE
    ENCOURAGED TO CONSULT AN ATTORNEY BEFORE EXECUTING THIS AGREEMENT IF THAT IS
    YOUR DESIRE.

         EXECUTED at _________________________ (city), ___________________
    (state), this __________day of ______________________, 20______.

    BAKER HUGHES INCORPORATED



    By:

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