exv10w59






Exhibit 10.59









	 	 	 
	Baker Hughes Incorporated

	 	2929 Allen Parkway, Suite 2100
	 

	 	Houston, Texas 77019-2118
	 

	 	P.O. Box 4740
	February 25, 2009

	 	Houston, Texas 77210-4740
	 

	 	Tel 713 439-8600
	 

	 	Fax 713 439-8699






Mr. David Barr

35 Southgate

The Woodlands, Texas 77380



Dear David:


As we have agreed, your employment with Baker Hughes Incorporated (hereinafter referred to as the
“Company”) will terminate upon your retirement from the Company on April 30, 2009. The purpose of
this letter (the “Agreement”) is to set forth certain agreements and understandings regarding,
among other things:




	 	•	 	The termination of your employment;
	 
	 	•	 	Certain benefits the Company has agreed to provide to you upon termination of your
employment;
	 
	 	•	 	Your agreement to certain obligations of confidentiality and cooperation; and
	 
	 	•	 	Your release of any and all claims against the Company.




When you and I have signed this Agreement, it will constitute a complete agreement on all of these
issues.




	1.	 	TERMINATION OF EMPLOYMENT:
	 
	 	 	You have decided to retire and resign your position as an officer of the Company on April
30, 2009 (the “Effective Date”). Your employment terminates as of the Effective Date.
	 
	2.	 	SEPARATION BENEFITS:
	 
	 	 	The Company will provide you with two kinds of separation benefits at the time of your
termination, regular separation benefits to which you are entitled as a result of your
termination and enhanced separation benefits which are being offered to you in recognition
of your specialized knowledge, and of your position as an officer of the Company. You will
receive the regular separation benefits even if you decline to sign this Agreement and
execute the release of claims. These benefits are described in Exhibit A attached hereto.




 









 






	3.	 	COVENANTS:
	 
	 	 	In consideration of the Consulting Agreement between the Company and you effective May 1,
2009, you agree to the following:





     (a) Non-Solicitation




Following the Effective Date, and for a period of 18 months thereafter, you shall not,
directly or indirectly:




     (1) interfere with the relationship of the Company or any affiliate with, or endeavor
to entice away from the Company or any affiliate, any individual or entity who was or is a
material customer or material supplier of, or who has maintained a material business
relationship with, the Company or its affiliates;




     (2) establish (or take preliminary steps to establish) a business with, or cause or
attempt to cause others to establish (or take preliminary steps to establish) a business
with, any employee or agent of the Company or any of its affiliates, if such business is or
will compete with the Company or any of its affiliates (provided that it shall not be a
violation of this covenant for you to take any action to the extent that the Company agrees
to permit such action in accordance with the provisions of Section 13 of the Consulting
Agreement); or;




     (3) employ, engage as a consultant or adviser, or solicit the employment, engagement as
a consultant or adviser, of any employee or agent of the Company or any of its affiliates,
or cause or attempt to cause any individual or entity to do any of the foregoing.



     (b) Cooperation and Assistance




Definition of Cooperation — As used in this Agreement, “cooperate” and
“cooperation” includes making yourself available in response to all reasonable requests by
the Company or the Securities and Exchange Commission (“SEC”) or Department of Justice
(“DOJ”) for information, whether the request is informal or formal (e.g., in response to a
subpoena in a legal proceeding), and includes fully, completely, and truthfully answering
questions or providing testimony in any related proceeding, civil or criminal.




Agreement to Cooperate — You agree, acknowledge, represent and warrant that:




     (1) you are aware that the Company has been under investigation by the SEC and the DOJ;




     (2) you have (i) not engaged in, nor encouraged any individual, in any way, to engage
in the destruction or secretion of any information, in any form, including but not limited
to documents and emails (“documentation”), that might be relevant to any



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investigation referenced in subsection 3(a)(1) above; (ii) turned over all documentation in
response to prior requests; and (iii) responded, fully and truthfully, to all questions
related to or arising from the subject matter of any such investigation that have been posed
to you by employees, representatives of the Company, or any government agency;




     (3) for a period of two (2) years after the Effective Date, upon reasonable request,
you will cooperate fully with the Company and its affiliates, past or present, in connection
with any internal investigation initiated by the Company, its affiliates, and any successors
in interest, as well as with any external investigation initiated by any government or
agency or instrumentality thereof in accordance with the Company’s Internal Investigations
Policy and Cooperation with Government Investigations Policy;




     (4) for a period of two (2) years after the Effective Date, upon reasonable request of
the Company, any subsidiary of the Company, or any successor-in-interest, you will provide
all documentation and information in your possession, custody, or control that is related to
any internal or external investigation of the Company and its affiliates;




     (5) after two (2) years after the Effective Date, you agree upon request to provide
continuing reasonable cooperation with the Company or any of its affiliates in responding to
internal or governmental investigations.




All reasonable expenses you incur in rendering cooperation under this subsection 3(b) will
be reimbursed by the Company.




(c) Confidentiality




Confidential Information — During the course of your employment with the Company,
you have had access and received confidential information. You are obligated to keep
confidential all such confidential information for a period of not less than one (1) year
following the Effective Date of this Agreement. Moreover, you understand and acknowledge
that your obligation to maintain the confidentiality of trade secrets and other intellectual
property is unending. As an exception to this confidentiality obligation you may disclose
the confidential information (i) in connection with enforcing your rights under any plan
relevant to the terms of this Agreement, or if compelled by law, and in either case, you
shall provide written notice to the Company prior to the disclosure or (ii) if the Company
provides written consent prior to the disclosure.




(d) Property




Agreement to Return Company Property — Immediately prior to the Effective Date, or
such earlier date as the Company may reasonably determine appropriate, you will return to
the Company all Company property in your possession, including but not limited to,
computers, credit cards and all files, documents and records of the Company, in whatever
medium and of whatever kind or type. You agree and hereby certify that you have returned, or
will return prior to the Effective Date, all proprietary or confidential information or
documents relating to the business and affairs of the Company and its affiliates. You
further agree that should it subsequently be determined by the Company that,



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notwithstanding the foregoing certification, you have inadvertently failed to return all
proprietary or confidential information and documents in your possession or control relating
to the business and affairs of the Company and its affiliates, you will be obligated to
promptly return to the Company such proprietary or confidential information and documents in
your possession or control relating to the business and affairs of the Company and its
affiliates.




	4.	 	RELEASE OF CLAIMS:
	 
	 	 	You hereby acknowledge that your relationship with the Company is an “at-will employment
relationship,” meaning that either you or the Company could terminate the relationship with
or without notice and or without cause, at any time. Nevertheless, in consideration for the
Consulting Agreement and the enhanced separation benefits described in Exhibit A of this
Agreement, you hereby provide the Company with an irrevocable and unconditional release and
discharge of claims.
	 
	 	 	This release and discharge of claims applies to (i) Baker Hughes Incorporated, (ii) to each
and all of its subsidiaries and affiliated companies, (collectively, “the Company”), (iii)
to the Company’s officers, agents, directors, supervisors, employees, representatives, and
their successors and assigns, whether or not acting in the course and scope of employment,
and (iv) to all persons acting by, through, under, or in concert with any of the foregoing
persons or entities.
	 
	 	 	The claims subject to this release include, without limitation, any and all claims related
or in any manner incidental to your employment with the Company or the termination of that
employment relationship. The parties understand the word “claims” to include all actions,
claims, and grievances, whether actual or potential, known or unknown, and specifically but
not exclusively all claims arising out of your employment with the Company and the
termination of your employment. All such claims (including related attorneys’ fees and
costs) are forever barred by this Agreement and without regard to whether those claims are
based on any alleged breach of a duty arising in a statute, contract, or tort; any alleged
unlawful act, including, without limitation, age discrimination; any other claim or cause or
cause of action; and regardless of the forum in which it might be brought. This release
applies to any claims brought by any person or agency on behalf of you or any class action
pursuant to which you may have any right or benefit.
	 
	 	 	You promise never to file a lawsuit asserting any claims that are released by you and
further promise not to accept any recoveries or benefits which may be obtained on your
behalf by any other person or agency or in any class action and do hereby assign any such
recovery or benefit to the Company. If you sue the Company in violation of this Agreement,
you shall be liable to the Company for its reasonable attorneys’ fees and other litigation
costs incurred in defending against such a suit. Additionally, if you sue the Company in
violation of this Agreement, the Company can require you to return all monies and other
benefits paid to you pursuant to this Agreement.
	 
	 	 	Notwithstanding the foregoing, the release contained herein shall not apply to (i) any
rights that you may have under the Company’s retirement plans including the Baker Hughes




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	 	 	Incorporated Pension Plan and the Baker Hughes Incorporated Thrift Plan, (ii) any rights you
may have under this Agreement, (iii) your right under applicable law (i.e., the COBRA law)
to continued medical insurance coverage at your expense, and (iv) your statutory right to
file a charge with the Equal Employment Opportunity Commission (“EEOC”) or the Texas
Commission on Human Rights (“TCHR”), to participate in an EEOC or TCHR investigation or
proceeding, or to challenge the validity of the release, consistent with the requirements of
29 U.S.C. § 626(f)(4).
	 
	 	 	In connection with this release, you understand and agree that:






(a) You have a period of 21 days within which to consider whether you execute this
Agreement, that no one hurried you into executing this Agreement during that 21 day period,
and that no one coerced you into executing this Agreement;




(b) You have carefully read and fully understand all the provisions of the release set forth
in Section 4 of this Agreement, and declare that the Agreement is written in a manner that
you understand;




(c) You are, through this Agreement, releasing the Company from any and all claims you may
have against the Company and the other parties specified above, and that this Agreement
constitutes a release and discharge of claims arising under the Age Discrimination in
Employment Act (ADEA), 29 U.S.C. § 621-634, including the Older Workers’ Benefit Protection
Act, 29 U.S.C. § 626(f);




(d) You declare that your agreement to all of the terms set forth in this Agreement is
knowing and voluntary;




(e) You knowingly and voluntarily intend to be legally bound by the terms of this Agreement;




(f) You acknowledge that the Company is hereby advising you in writing to consult with an
attorney of your choice prior to executing this Agreement; and




(g) You understand that rights or claims that may arise after the date this Agreement is
executed are not waived. You understand that you have a period of seven days to revoke your
agreement to give the Company a complete release in exchange for separation benefits, and
that you may deliver notification of revocation by letter or facsimile addressed to the
Company’s Senior Labor and Employment Counsel. You understand that this will not become
effective and binding, and that none of the separation benefits described above in Section 2
of this Agreement will be provided to you until after the expiration of the revocation
period. The revocation period commences when you execute this Agreement and ends at 11:59
p.m. on the seventh calendar day after execution, not counting the date on which you execute
this Agreement. You understand that if you do not deliver a written notice of revocation to
the Company’s Senior Labor and Employment Counsel before the end of the seven-day period
described above, this Agreement will become final, binding and enforceable.








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	 	 	The Company’s decision to offer the Consulting Agreement and the enhanced separation
benefits in exchange for a release of claims shall not be construed as an admission by the
Company of (i) any liability whatsoever, (ii) any violation of any of your rights or those
of any person, or (iii) any violation of any order, law, statute, duty, or contract. The
Company specifically disclaims any liability to you or to any other person for any alleged
violation of any rights possessed by you or any other person, or for any alleged violation
of any order, law, statute, duty, or contract on the part of the Company, its employees or
agents or related companies or their employees or agents.
	 
	 	 	You represent and acknowledge that in executing this Agreement you do not rely and have not
relied upon any representation or statement made by the Company, or by any of the Company’s
agents, attorneys, or representatives with regard to the subject matter, basis, or effect of
the release set forth in this Agreement, other than those specifically stated in this
Agreement.
	 
	 	 	The release set forth in this Section 4 of this Agreement shall be binding upon you, and
your heirs, administrators, representatives, executors, successors, and assigns, and shall
inure to the benefit of the Company as defined above. You expressly warrant that you have
not assigned, transferred or sold to any person or entity any rights, causes of action, or
claims released in this Agreement.
	 
	5.	 	D&O INSURANCE AND INDEMNIFICATION RIGHTS:
	 
	 	 	This Agreement shall in no way diminish or otherwise affect any of your rights under that
Indemnification Agreement between you and the Company made and executed December 3, 2003, as
amended January 1, 2009, and such agreement shall remain in full force and effect.
	 
	6.	 	MISCELLANEOUS:
	 
	 	 	Exclusive Rights and Benefits — Except as otherwise provided in this Agreement, the
benefits described in this Agreement supersede, negate and replace any other benefits owed
to or offered by the Company to you. This Agreement will be administered by the Company’s
Senior Labor and Employment Counsel, who will also resolve any issues regarding the
interpretation, implementation, or administration of the benefits described above. However,
this provision shall not be construed to limit your legal rights if a disagreement exists to
contest the decision of the Company’s Senior Labor and Employment Counsel.
	 
	 	 	Entire Agreement — This Agreement sets forth the entire agreement between you and
the Company with respect to each and every issue addressed in this Agreement, and that
entire, integrated agreement fully supersedes any and all prior agreements or
understandings, oral or written, between you and the Company pertaining to the subject
matter of this Agreement.
	 
	 	 	Exclusive Choice of Law and Arbitration Agreement — This Agreement constitutes an
agreement that has been executed and delivered in the State of Texas, and the validity,
interpretation, performance, and enforcement of that agreement shall be governed by the laws
of that State.




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	 	 	In the event of any dispute or controversy arising out of or under this Agreement, or
concerning the substance, interpretation, performance, or enforcement of this Agreement, or
in any way relating to this Agreement (including issues relating to the formation of the
agreement and the validity of this arbitration clause), you agree to resolve that dispute or
controversy, fully and completely, through the use of final, binding arbitration. This
arbitration agreement applies to any disputes arising under (i) the common law, (ii) federal
or state statutes, laws or regulations, and also to (iii) any dispute about the
arbitrability of any claim or controversy. You further agree to hold knowledge of the
existence of any dispute or controversy subject to this Agreement to arbitrate, completely
confidential. You understand and agree that this confidentiality obligation extends to
information concerning the fact of any request for arbitration, any ongoing arbitration, as
well as all matters discussed, discovered, or divulged, (whether voluntarily or by
compulsion) during the course of such arbitration proceeding. Any arbitration conducted
pursuant to this arbitration provision will be conducted in accordance with the rules of the
American Arbitration Association in accordance with its rules governing employment disputes
and the arbitrator shall have full authority to award or grant all remedies provided by law.
The arbitrator will have the discretion to permit discovery that the arbitrator deems
appropriate for a full and fair hearing. The arbitrator will issue a reasoned award, and the
award of the arbitrator shall be final and binding. A judgment upon the award may be
entered and enforced by any court having jurisdiction. Any arbitration proceeding resulting
hereunder will be conducted in Houston, Texas before an arbitrator selected by you and the
Company by mutual agreement, or through the American Arbitration Association. This
arbitration agreement does not limit or affect the right of the Company to seek an
injunction to maintain the status quo in the event that the Company believes that you have
violated any provision of Section 3 of this Agreement. This arbitration agreement does not
limit your right to file an administrative charge concerning the validity of the release set
forth in Section 4 of this Agreement, with any appropriate state or federal agency.
	 
	 	 	Severability and Headings — 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. Any titles
or headings in this Agreement are for convenience only and shall have no bearing on any
interpretation of this Agreement.





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Please initial each page and sign below.


ENTERED INTO in Houston, Texas as of the 25th day of February, 2009.



BAKER HUGHES INCORPORATED




	 	 	 
	By:

	 	/s/ Chad C. Deaton
	 

	 	 
	 

	 	Chad C. Deaton
	 

	 	Chairman, President and Chief Executive Officer
	 
	 	 
	ENTERED INTO in Houston, Texas as of the 25th day of February, 2009.
	 
	 	 
	By:

	 	/s/ David H. Barr
	 

	 	 
	 

	 	David H. Barr







 











 





Exhibit A

David Barr

Summary of Compensation and Benefits

April 2009




Retirement Effective Date: April 30, 2009




Regular Separation Benefits




Health & Welfare Programs




     As you are participating in medical, dental,
and/or vision coverage for yourself and your
eligible dependent(s), all active coverage
will end as of the Effective Date. The
Benefits Center will send you a packet
regarding continuation of benefits under
COBRA (Consolidated Omnibus Benefits
Reconciliation Act), and you and/or your
eligible dependent(s) may elect to continue
coverage for an additional 18 months,
provided you timely enroll for coverage and
make the required premium payments.




     As an alternative to COBRA continuation of
benefits, you have the option of enrolling
in the Retiree Medical Program based on your
age and years of service. If you select
this option, the Benefits Center will send
you a packet regarding continuation of
benefits, and you and/or your eligible
dependent(s) may elect to continue coverage.
Your retiree medical premiums are
subsidized by the Company and will be billed
to you by the Benefits Center. You will be
solely responsible for payment of the
retiree premiums for both yourself and your
covered dependents, if any. You can also
contact the Benefits Center directly at
1-866-244-3539 for more information and to
answer any questions. All other health and
welfare benefits end as of the Effective
Date.



Retirement Programs




Thrift Plan




     You have the option of leaving your money in
the Baker Hughes Incorporated Thrift Plan,
or you may request a distribution of your
account balance at any time after the
Effective Date.




Pension Plan




     You have the option of leaving your money in
the Baker Hughes Incorporated Pension Plan,
or you may request a distribution of your
Pension Plan benefit at any time after the
Effective Date.




Supplemental Retirement Plan




     Your vested account balance will be paid out
according to your elections previously
submitted and the terms of the Baker Hughes
Incorporated Supplemental Retirement Plan
(“SRP”).




ICP Bonus




     Your 2008 ICP bonus will be paid in
accordance with the provisions of the ICP
and your applicable election (if any) under
the SRP. You will be eligible to receive a
prorated ICP bonus for the 2009 fiscal year
based upon your length of service
(4/12ths) during the 2009 fiscal
year at the same time as other employees.




	 	 	 	 	 
	2009 Bonus at EV (56%)
	 	$	252,000	 
	Value of Bonus
	 	$	84,000	 
	(prorated four months)
	 	 	 	 






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Discretionary Bonus




     You will be eligible to receive a
discretionary bonus based on the achievement
of non-financial performance goals in an
amount no less than the average bonus paid
to other participants.




	 	 	 	 	 
	Target Bonus at EV (14%)
	 	$	63,000	 
	Value of Bonus
	 	$	21,000	 
	(prorated four months)
	 	 	 	 






Long-Term Incentives




Stock Options




     All of your previously granted options will
become fully vested upon your Retirement
Date (to the extent they are not already
fully vested) and may be exercised in
accordance with the terms of the grants.
Options granted in or after 2004 expire five
years from your retirement date. You are
not eligible for any future equity awards.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Options
	Grant	 	Grant	 	Options	 	Grant	 	Out-
	Date	 	Date	 	Granted	 	Price	 	Standing
	7/27/2005
	 	NQ	 	 	14,750	 	 	$56.21	 	 	4,917	 
	1/25/2006
	 	ISO	 	 	1,332	 	 	$75.06	 	 	1,332	 
	1/25/2006
	 	NQ	 	 	6,538	 	 	$75.06	 	 	6,538	 
	7/27/2006
	 	NQ	 	 	7,870	 	 	$80.73	 	 	7,870	 
	1/24/2007
	 	ISO	 	 	1,459	 	 	$68.54	 	 	1,459	 
	1/24/2007
	 	NQ	 	 	6,722	 	 	$68.54	 	 	6,722	 
	7/25/2007
	 	NQ	 	 	10,191	 	 	$82.28	 	 	10,191	 
	1/23/2008
	 	ISO	 	 	1,430	 	 	$69.92	 	 	1,430	 
	1/23/2008
	 	NQ	 	 	9,244	 	 	$69.92	 	 	9,244	 
	8/11/2008
	 	NQ	 	 	9,716	 	 	$77.20	 	 	9,716	 
	1/21/2009
	 	NQ	 	 	43,136	 	 	$29.18	 	 	43,136	 
	1/21/2009
	 	ISO	 	 	3,427	 	 	$29.18	 	 	3,427	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	115,815	 	 	 	 	 	105,982	 






Performance Unit Awards




     You will receive a prorated portion of the
Performance Units awarded to you under the
2002 D&O Plan in 2007, but you will forfeit
1,213 Performance Units awarded in 2007.
You will also receive a prorated portion of
the Performance Units awarded to you under
the 2002 D&O Plan in 2008, but you will
forfeit 4,014 Performance Units awarded in
2008. Depending on results achieved, you
will be eligible to receive a prorated award
based on actual results as defined in the
terms and conditions of the Performance Unit
Award Agreements provided with each grant of
Performance Units in 2007 and in 2008.
Payments for the 2006 awards are scheduled
for March 13, 2009. You will not receive
any further awards under the 2002 D&O Plan.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Adjusted
	Grant	 	 	 	 	 	Cycle End	 	Days in	 	Performance
	Date	 	Units	 	Date	 	Plan	 	Units
	1/25/2006
	 	 	4,125	 	 	12/31/2008	 	full cycle	 	 	4,125	 
	1/24/2007
	 	 	5,403	 	 	12/31/2009	 	850	 	 	4,190	 
	1/23/2008
	 	 	7,200	 	 	12/31/2010	 	485	 	 	3,186	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	16,728	 	 	 	 	 	 	 	11,501	 






Perquisites



     All perquisites terminate as of the
Effective Date and you will receive no
perquisite payments for any period after the
Effective Date. The Company will make
arrangements to transfer your country club
membership from a corporate membership to a
personal membership.




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Vacation




     You will be paid for any accrued but unused
2009 vacation. You will not accrue further
vacation following the Effective Date.




Final Expenses




     The Company agrees to reimburse you for all
outstanding business expenses in accordance
with Company policy. You will prepare and
submit a final expense account reimbursement
request for expenses incurred prior to the
Effective Date. Such an expense account
reimbursement request will be reviewed and
paid in accordance with Company policy.




Enhanced Separation Benefits




Restricted Stock




     You have been awarded 5,984 shares of
restricted stock under the 2002 D&O Plan
that are scheduled to vest after the
Effective Date. As an enhanced separation
benefit, the Company agrees that a total of
5,984 restricted shares that would otherwise
vest after the Effective Date, will vest as
of the Effective Date. Unless you elect
otherwise by remitting to the Company cash
in an amount necessary to satisfy the
Company’s tax withholding obligation arising
with respect to the vesting of your
restricted stock, the Company shall satisfy
its tax withholding obligation by
withholding shares with a fair market value
equal to the withholding obligation.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grant	 	Shares	 	 	 	 
	Date	 	Granted	 	Vested	 	Unvested
	1/24/2007
	 	 	5,078	 	 	 	3,385	 	 	 	1,693	 
	1/23/2008
	 	 	6,436	 	 	 	2,145	 	 	 	4,291	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	11,514	 	 	 	5,530	 	 	 	5,984	 







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