Document:

<PAGE>

                                                                    Exhibit 10.2

                       FOURTH AMENDMENT TO LOAN AGREEMENT

      THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is executed on
March 25, 2004, to be effective as of March 31, 2004, by and among THE CIT
GROUP/BUSINESS CREDIT, INC., a New York corporation ("CITBC"), in its individual
capacity as a Lender and as Agent for the Lenders hereinafter named (the
"AGENT"), WELLS FARGO FOOTHILL, INC.,, a California corporation formerly known
as Foothill Capital Corporation, and any other party hereafter becoming a Lender
pursuant to Section 12.4(b) of the Loan Agreement (as hereinafter defined), each
individually sometimes referred to as a "LENDER" and, collectively, the
"LENDERS"), GREY WOLF DRILLING COMPANY L.P., a Texas limited partnership (the
"BORROWER"), GREY WOLF, INC., a Texas corporation (the "PARENT"), GREY WOLF
HOLDINGS COMPANY, a Nevada corporation ("HOLDINGS"), GREY WOLF LLC, a Louisiana
limited liability company ("GWLLC"), DI ENERGY, INC., a Texas corporation
("ENERGY"), GREY WOLF INTERNATIONAL, INC., a Texas corporation
("INTERNATIONAL"), DI/PERFENSA INC., a Texas corporation ("PERFENSA"), MURCO
DRILLING CORPORATION, a Delaware corporation ("MURCO") (Parent, Holdings, GWLLC,
Energy, International, Perfensa and Murco are referred to collectively herein as
the "GUARANTORS").

                                    RECITALS

      1.    WHEREAS, pursuant to the terms and subject to the conditions of that
certain Loan Agreement dated as of January 14, 1999 among the parties hereto, as
amended by that certain First Amendment to Loan Agreement dated as of December
20, 2001, that certain Second Amendment to Loan Agreement dated as of February
7, 2003, and that certain Third Amendment to Loan Agreement dated as of May 1,
2003 (such Loan Agreement, as the same was previously amended, is hereby amended
and may hereafter be amended from time to time, being hereinafter referred to as
the "Loan Agreement"), the Borrower was granted a $50,000,000 revolving line of
credit which included a letter of credit facility;

      2.    WHEREAS, the indebtedness of the Borrower to the Lenders is
currently evidenced by that certain Revolving Note dated December 20, 2001 (the
"Revolving Note"), executed by the Borrower and payable to CITBC as Agent for
the benefit of the Lenders in the stated principal amount of $75,000,000;

      3.    WHEREAS, payment of the Obligations of the Borrower are supported by
the guarantees of the Guarantors contained in Section 13 of the Loan Agreement;

      4.    WHEREAS, to secure, in part, the indebtedness under the Loan
Agreement and the Revolving Note (and all renewals, extensions, modifications
and/or rearrangements thereof and in connection therewith) and all other
indebtedness, liabilities and obligations of the Borrower and the Guarantors to
the Agent for the benefit of the Lenders, then existing or thereafter arising,
the Borrower and the Guarantors have heretofore executed in favor of the Agent
certain Credit Documents (as defined in the Loan Agreement), including, without
limitation, the Security Documents (as defined in the Loan Agreement), which
Credit Documents, as amended in connection herewith, shall continue in full
force and effect upon the

<PAGE>

execution of this Amendment and shall continue to secure the payment by the
Borrower and the Guarantors of the Obligations (as defined in the Loan
Agreement), all as more fully set forth therein and herein;

      5.    WHEREAS, the Borrower has requested that the Agent and the Lenders
modify and, pursuant to the terms and subject to the conditions hereof and in
connection herewith, the Agent and the Lenders have agreed to modify, Section
8.4(h), the definition of Permitted Refinancing, and the related provisions
under the Loan Agreement; and

      6.    WHEREAS, in furtherance of the foregoing and to evidence the
agreements of the parties hereto in relation thereto, the parties hereto desire
to amend the Loan Agreement as hereinafter provided.

      NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower, the Guarantors, the Agent and the Lenders,
intending to be legally bound, agree as follows:

                                    AGREEMENT

                                    ARTICLE I
                                   DEFINITIONS

      1.01  Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.

                                   ARTICLE II
                          AMENDMENTS TO LOAN AGREEMENT

      Effective as of the respective date herein indicated, the Loan Agreement
is hereby amended as follows:

      2.01  AMENDMENT AND RESTATEMENT OF DEFINITION OF "PERMITTED REFINANCING".
Effective as of the date of execution of this Amendment, the definition of
"Permitted Refinancing" set forth in Section 10 of the Loan Agreement is amended
and restated to read in its entirety as follows:

            ""Permitted Refinancing" shall mean a refinancing of all or any
      portion of the Indebtedness evidenced by (i) the 3.75% Contingent
      Convertible Senior Notes Due 2023 issued by the Parent in 2003, in the
      aggregate principal amount of $150,000,000, and (ii) the Floating Rate
      Contingent Convertible Senior Notes Due 2024 issued by the Parent in 2004,
      in the aggregate principal amount of up to $125,000,000 (in each case,
      either with the same payees or different financing sources), including a
      restructure or restatement of such existing Indebtedness or a new loan to
      repay such existing Indebtedness, so long as

                                        2

<PAGE>

      (a) the terms of the refinanced Indebtedness are not materially more
      favorable to the payee(s) and are not less favorable to the Lenders than
      the existing Indebtedness which was refinanced, (b) no Default or Event of
      Default will exist immediately after the completion of such refinancing,
      and (c) such refinancing Indebtedness is unsecured and subordinated in
      right of payment to the Obligations at least to the same extent as the
      Indebtedness being refinanced."

      2.02  AMENDMENT OF SECTION 8.4. Effective as of the date of execution of
this Amendment, Section 8.4(h) of the Loan Agreement is amended and restated to
read in its entirety as follows:

            "(h) Unsecured Indebtedness evidenced by (i) the 3.75% Contingent
      Convertible Senior Notes Due 2023 issued by the Parent in 2003, in the
      aggregate principal amount of $150,000,000, (ii) the Floating Rate
      Contingent Convertible Senior Notes Due 2024 issued by the Parent in 2004,
      in the aggregate principal amount of up to $125,000,000, and (iii) any
      Permitted Refinancing."

                                   ARTICLE III
                              CONDITIONS PRECEDENT

      3.01  CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent in a manner
satisfactory to Agent, unless specifically waived in writing by Agent:

            (a) Agent shall have received each of the following, each in form
      and substance satisfactory to Agent, in its sole discretion, and, where
      applicable, each duly executed by each party thereto, other than Agent:

                  (i) This Amendment, duly executed by the Borrower and the
            Guarantors; and

                  (ii) All other documents Agent may request with respect to any
            matter relevant to this Amendment or the transactions contemplated
            hereby.

            (b) The representations and warranties contained herein and in the
      Loan Agreement and the other Credit Documents (as defined in the Loan
      Agreement), as each is amended hereby, shall be true and correct as of the
      date hereof, as if made on the date hereof.

            (c) No Default or Event of Default shall have occurred and be
      continuing, unless such Default or Event of Default has been otherwise
      specifically waived in writing by Agent.

                                        3

<PAGE>

            (d) All corporate proceedings taken in connection with the
      transactions contemplated by this Amendment and all documents, instruments
      and other legal matters incident thereto shall be satisfactory to Agent.

            (e) Agent's receipt of the fees described in the fee letter dated of
      even date herewith executed by Borrower and Agent.

                                   ARTICLE IV
                  RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

      4.01  RATIFICATIONS. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Loan Agreement and the other Credit Documents, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the Loan
Agreement and the other Credit Documents are ratified and confirmed and shall
continue in full force and effect. The Borrower, Guarantors, Agent and Lenders
agree that the Loan Agreement and the other Credit Documents, as amended hereby,
shall continue to be legal, valid, binding and enforceable in accordance with
their respective terms. The Loan Agreement and any other Credit Documents
previously executed by Murco under the name "Murco Drilling Corp." are hereby
amended in all cases to use Murco's full legal name, Murco Drilling Corporation,
and Murco agrees that the Loan Agreement and all such other Credit Documents
continue to be valid, binding and enforceable and ratifies the same.

      4.02  REPRESENTATIONS AND WARRANTIES. The Borrower and Guarantor (the
"Credit Parties") hereby represent and warrant to Agent and the Lenders that (a)
the execution, delivery and performance of this Amendment and any and all other
Credit Documents executed and/or delivered in connection herewith have been
authorized by all requisite corporate action on the part of the Credit Parties
and will not violate the organizational documents of the Credit Parties; (b) the
Managers or Board of Directors of each of the Credit Parties (or the Board of
Directors of the corporate general partners of any Credit Party that is a
limited partnership) has authorized the execution, delivery and performance of
this Amendment and any and all other Credit Documents executed and/or delivered
in connection herewith; (c) the representations and warranties contained in the
Loan Agreement, as amended hereby, and any other Credit Document are true and
correct on and as of the date hereof and on and as of the date of execution
hereof as though made on and as of each such date; (d) no Default or Event of
Default under the Loan Agreement, as amended hereby, has occurred and is
continuing, unless such Default or Event of Default has been specifically waived
in writing by Agent; (e) the Credit Parties are in full compliance with all
covenants and agreements contained in the Loan Agreement and the other Credit
Documents, as amended hereby; and (f) since the date of the initial closing of
the Loan Agreement, the Credit Parties have not amended their (i) Articles (or
Certificates) of Incorporation or their Bylaws, if a corporation, (ii) limited
partnership agreement or certificate of limited partnership, if a limited
partnership, or (iii) Articles of Organization or operating agreement, if a
limited liability company, except as otherwise disclosed to Agent.

                                        4

<PAGE>

                                    ARTICLE V
                            MISCELLANEOUS PROVISIONS

      5.01  SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in the Loan Agreement or any other Credit Document, including,
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the other Credit
Documents, and no investigation by Agent or any closing shall affect the
representations and warranties or the right of Agent to rely upon them.

      5.02  REFERENCE TO LOAN AGREEMENT. Each of the Loan Agreement and the
other Credit Documents, and any and all other Credit Documents, documents or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Loan Agreement, as amended hereby, are hereby
amended so that any reference in the Loan Agreement and such other Credit
Documents to the Loan Agreement shall mean a reference to the Loan Agreement, as
amended hereby.

      5.03  EXPENSES OF AGENT. As provided in the Loan Agreement, the Borrower
agrees to pay on demand all reasonable costs and expenses incurred by Agent in
connection with the preparation, negotiation, and execution of this Amendment
and the other Credit Documents executed pursuant hereto and any and all
amendments, modifications, and supplements thereto, including, without
limitation, the reasonable costs and fees of Agent's legal counsel, and all
reasonable costs and expenses incurred by Agent in connection with the
enforcement or preservation of any rights under the Loan Agreement, as amended
hereby, or any other Credit Documents, including, without limitation, the
reasonable costs and fees of Agent's legal counsel.

      5.04  SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

      5.05  SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Agent, the Lenders, and the Credit Parties and their
respective successors and assigns, except that the Credit Parties may not assign
or transfer any of their rights or obligations hereunder without the prior
written consent of Agent.

      5.06  COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

      5.07  EFFECT OF WAIVER. No consent or waiver, express or implied, by Agent
to or for any breach of or deviation from any covenant or condition by the
Credit Parties shall be deemed a consent to or waiver of any other breach of the
same or any other covenant, condition or duty.

      5.08  HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

                                        5

<PAGE>

      5.09  APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER CREDIT DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE
IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

      5.10  FINAL AGREEMENT. THE LOAN AGREEMENT AND THE OTHER CREDIT DOCUMENTS,
EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE
LOAN AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY THE CREDIT
PARTIES AND THE AGENT.

      5.11  FINANCING STATEMENTS. Agent is hereby authorized by each Credit
Parties to file (including pursuant to the applicable terms of the UCC) from
time to time any financing statements, continuations or amendments covering the
Collateral whether or not the signature of any such Credit Party appears
thereon.

      5.12  RELEASE BY BORROWER. THE BORROWER HEREBY ACKNOWLEDGES THAT BORROWER
HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY
KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY
PART OF ITS LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF
OR DAMAGES OF ANY KIND OR NATURE FROM AGENT OR THE LENDERS. THE BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT AND THE LENDERS,
AND THEIR RESPECTIVE PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS
(THE "RELEASED PARTIES"), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE
THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER
HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM ANY "LOANS", INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST
IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE LOAN AGREEMENT OR OTHER CREDIT DOCUMENTS, AND NEGOTIATION FOR
AND EXECUTION OF THIS AMENDMENT.

                                        6

<PAGE>

      5.13  RELEASE BY GUARANTORS. Each Guarantor hereby consents to the terms
of this Amendment, confirms and ratifies the terms of the guarantee by such
Guarantor for the benefit of Agent and the other Lenders set forth in Section 13
of the Loan Agreement (each a "Guarantee" and collectively the "Guarantees"),
and acknowledges that such Guarantor's Guarantee is in full force and effect and
ratifies the same and that such Guarantor has no defense, counterclaim, set-off
or any other claim to diminish such Guarantor's liability under its Guarantee.
EACH GUARANTOR HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES
THE RELEASED PARTIES, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE
THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE GUARANTORS MAY NOW OR HEREAFTER
HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM ANY "LOANS", INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST
IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE LOAN AGREEMENT OR OTHER CREDIT DOCUMENTS, AND NEGOTIATION FOR
AND EXECUTION OF THIS AMENDMENT.

                                        7

<PAGE>

      IN WITNESS WHEREOF, this Amendment has been executed and is effective as
of the date first above-written.

                                       BORROWER:

                                       GREY WOLF DRILLING COMPANY L.P.

                                       By: Grey Wolf Holdings Company,
                                           its general partner

                                           By: _________________________________
                                               David W. Wehlmann
                                               Senior Vice President and
                                               Chief Financial Officer

                                       GUARANTORS:

                                       GREY WOLF, INC.

                                       By: _____________________________________
                                           David W. Wehlmann
                                           Senior Vice President and
                                           Chief Financial Officer

                                       GREY WOLF HOLDINGS COMPANY

                                       By: _____________________________________
                                           David W. Wehlmann
                                           Senior Vice President and
                                           Chief Financial Officer

FOURTH AMENDMENT TO LOAN AGREEMENT      Page 1

<PAGE>

                                       GREY WOLF LLC

                                       By: _____________________________________
                                           David W. Wehlmann
                                           Senior Vice President and
                                           Chief Financial Officer

                                       DI ENERGY, INC.

                                       By: _____________________________________
                                           David W. Wehlmann
                                           Senior Vice President and
                                           Chief Financial Officer

                                       GREY WOLF INTERNATIONAL, INC.

                                       By: _____________________________________
                                           David W. Wehlmann
                                           Senior Vice President and
                                           Chief Financial Officer

                                       DI/PERFENSA INC.

                                       By: _____________________________________
                                           David W. Wehlmann
                                           Senior Vice President and
                                           Chief Financial Officer

                                       MURCO DRILLING CORPORATION

                                       By: _____________________________________
                                           David W. Wehlmann
                                           Senior Vice President and
                                           Chief Financial Officer

FOURTH AMENDMENT TO LOAN AGREEMENT      Page 2

<PAGE>

                                       LENDERS:

                                       THE CIT GROUP/BUSINESS CREDIT, INC.
                                       as Agent and Lender

                                       By: _____________________________________
                                       Name: ___________________________________
                                       Title: __________________________________

                                       Revolving Loan Commitment: $40,000,000

FOURTH AMENDMENT TO LOAN AGREEMENT      Page 3

<PAGE>

                                       WELLS FARGO FOOTHILL, INC., formerly
                                       known as Foothill Capital Corporation,
                                       as Lender

                                       By: _____________________________________
                                       Name: ___________________________________
                                       Title: __________________________________

                                       Revolving Loan Commitment:  $35,000,000

FOURTH AMENDMENT TO LOAN AGREEMENT      Page 4exv10w1

 

Exhibit 10.1

March 17, 2004

Via Hand Delivery

Mr. Andrew Szescila

6307 Prague Street

Houston, TX 77007

Dear Andy:

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

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

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

	1.	 	RETIREMENT:
	 
	 	 	You have indicated that you plan to retire from the Company on December
31, 2003 (the “Effective Date”). Your employment will terminate on the
Effective Date.

	 	 	 	 	 
	Initials: AJS MEW

	 	 	1	 

 

 

Exhibit 10.1

	2.	 	SEPARATION BENEFITS:
	 
	 	 	The Company will provide you with two kinds of separation benefits at the
time of your termination. First, you will receive regular separation
benefits as defined below. Second, in recognition of your specialized
knowledge and of your position as an officer of the Company, and in
exchange for a release of all claims, the Company is offering you enhanced
separation benefits. You will receive the regular separation benefits,
even if you decline to sign this letter and execute the release of claims.
	 
	 	 	(a) Regular Separation Benefits
	 
	 	 	Year 2003 ICP Bonus – Your bonus for fiscal year 2003 will be determined
with reference to the formal written objectives set forth for your
position of Senior Vice President and Chief Operating Officer, Baker
Hughes Incorporated, in the Incentive Compensation Plan, and will be paid
by March 31, 2004. If the results for Baker Hughes Incorporated exceed
OA, the excess portion that would be “banked” will be paid to you in
conjunction with your incentive payment. The bonus will be determined at
the Company’s sole discretion, based on fiscal 2003 audited results.
	 
	 	 	Long-term Incentive Performance Plan – Performance goals were not
achieved under the Long-term Incentive Performance Plan and, therefore, no
payment will be made under this bonus plan.
	 
	 	 	Health and Welfare Benefits – If you were participating in medical,
dental, and/or vision coverage for yourself and any 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, you have the option of enrolling in the Retiree Medical
Plan 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.
	 
	 	 	Regarding your Thrift Plan account balance, you have the option of leaving
your money in the Plan, or you may request a full distribution of your
account at any time after your termination.

	 	 	 	 	 
	Initials: AJS MEW

	 	 	2	 

 

 

Exhibit 10.1

	 	 	Regarding your Pension Plan account balance, you are not currently vested
in the Pension Plan; therefore your current Pension Plan balance is
forfeited.
	 
	 	 	Your vested Supplemental Retirement Plan account balance will be paid out
according to your elections previously submitted. A small portion of your
Supplemental Retirement Plan balance related to pension contributions is
unvested and will therefore be forfeited.
	 
	 	 	Stock Options – In accordance with the terms of your current outstanding
stock options, (1) all options immediately vest upon the Effective Date,
and (2) you have up to three years from the Effective Date, but not later
than the Expiration Date of the options, to exercise the respective
options.
	 
	 	 	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 expense account reimbursement
request will be reviewed and paid in accordance with Company policy. You
agree and consent to allow the Company to deduct from any payments you
would otherwise be entitled to receive any amounts that you owe to the
Company as of the Effective Date.
	 
	 	 	Perquisites – All perquisites terminate as of your Effective Date. If any
memberships are owned by the Company, you will relinquish them to the
Company.
	 
	 	 	(b) Enhanced Separation Benefits
	 
	 	 	These enhanced separation benefits are benefits to which you are not
entitled pursuant to any agreement, or under any policy or practice of the
Company. You acknowledge that the Company has no obligation to provide
you with these benefits and that these benefits constitute a valuable
consideration justifying your agreement to provide the release set forth
in Section 4 of this letter.
	 
	 	 	Restricted Stock – The 25,000 restricted shares of Common Stock of the
Company, issued to you in 2001 and due to vest on January 24, 2004, are
vested as of the Effective Date.
	 
	3.	 	AGREEMENTS:

	A.	 	Agreement Not to Compete in order to Protect Confidential
Information. You already possess, and the Company agrees and
promises that it will provide you with additional, sensitive and
Confidential Information (as hereinafter defined) and trade secrets,
all of which will be necessary for the continued performance of your
job duties to the effective date of your resignation. Accordingly,
as a promise ancillary to and in exchange for the Company’s promise
to provide you with Confidential Information and trade secrets, you
agree that, during the period commencing with the Effective Date and

	 	 	 	 	 
	Initials: AJS MEW

	 	 	3	 

 

 

Exhibit 10.1

	 	 	ending six-months from that date unless extended by other agreement,
you will not, without the written consent of the Company, at any time,
directly or indirectly serve as an employee, director, consultant, or
otherwise provide services, advice or assistance to any person,
association, or entity that is a Competitor of the Company, whether in
operations, research, marketing, engineering, process, finance or
administration. For the purposes of this Agreement, the term
“Competitor of the Company” shall be construed broadly to include
without limitation any individual, entity, or enterprise that employs
engineers, geoscientists, and field service personnel who apply
knowledge and technology to find, develop and produce oil and gas, as
well as those enterprises that provide products or services for the
drilling, formation evaluation, completion, or production of
hydrocarbons. You agree that this restriction in your ability to
represent a Competitor of the Company is necessary to protect the
Confidential Information the Company has already provided and promised
to further provide to you. Because your agreement to refrain from
competition for a total period of six-months is ancillary to the
Company’s promise to provide you with Confidential Information, that
agreement will survive the termination of your employment.
	 
	 	 	You recognize the restriction stated herein as reasonable in protecting
the Confidential Information of the Company. Although the Company has
attempted to place no more than reasonable limitations on your
subsequent employment opportunities consistent with the Company’s
protection of its legitimate business interests, you may, at some time
in the future, feel that such limitations constitute a serious
impediment to your securing future employment. In such case, you
agree to make a written request to the Company for waiver or
reformation of rights under Section 3A of this letter before accepting
employment in conflict with this Section or any other section of this
letter, such request to include the name and address of the proposed
employer and location, position, and duties of proposed employment. A
waiver, unqualified or upon stated conditions, may be granted by the
Company in its discretion.
	 
	B.	 	No Solicitation. During the period commencing with your
Effective Date and ending six months from that date unless extended
by other agreement, you shall not, directly or indirectly,

	(a)	 	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;
	 
	(b)	 	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; or
	 
	(c)	 	employ, engage as a consultant or adviser, or solicit the
employment, engagement as a consultant or adviser, of any employee
or agent of the

	 	 	 	 	 
	Initials: AJS MEW

	 	 	4	 

 

 

Exhibit 10.1

	 	 	Company or any of its Affiliates, or cause or attempt to cause
any individual or entity to do any of the foregoing.

	C.	 	Cooperation and Assistance. You agree, acknowledge, and
certify that:

	(a)	 	you are aware that the Company is currently under
investigation by the Securities and Exchange Commission and the
Department of Justice;
	 
	(b)	 	you have (i) not engaged in, nor encouraged any
individual, in any way, to engage in the destruction or secreting
of any information, in any form, including but not limited to
documents and emails, (“documentation”) that might be relevant to
the investigation referenced in 1 A (a) 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 such investigation that have
been posed to you by employees or representatives of the Company;
	 
	(c)	 	for a period of two years after the date of the
termination of your employment (the “Effective Date”), you will
cooperate fully upon reasonable request 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 the government or agency or
instrumentality thereof;
	 
	(d)	 	for a period of two years after the Effective Date, upon
reasonable request of the Company, any subsidiary of the Company,
or any successor thereof, you will provide all documentation and
information related to any internal or external investigation of
the Company and its affiliates; and
	 
	(e)	 	after two years after the Effective Date, you will
cooperate with the Company and its affiliates as described herein
at your option, upon payment of all reasonable expenses
reasonably incurred, with such agreement to cooperate not to be
unreasonably withheld.

	D.	 	Confidential Information. “Confidential Information” means
sensitive or proprietary information that has been disclosed to me,
or is known by me, through my employment or as a consequence of my
employment with the Company, which is not generally known as common
existing public knowledge in the relevant trade or industry.
Confidential Information includes, but is not limited to, the
following: information regarding customers, employees, contractors,
and the industry not generally known to the public; strategies,
methods, books, records, and documents; technical information
concerning products, equipment, services, and processes; procurement
procedures, pricing, and pricing techniques; information concerning
past, current, and prospective customers, investors, and business
affiliates (such as contact name, service provided, pricing, type
and amount of services used, financial data, and/or other such
information);

	 	 	 	 	 
	Initials: AJS MEW

	 	 	5	 

 

 

Exhibit 10.1

	 	 	pricing strategies and price curves; positions; plans or strategies
for expansion or acquisitions; budgets; research; financial and sales
data; trading methodologies and terms; communications information;
evaluations, opinions, and interpretations of information and data;
marketing a merchandising techniques; electronic databases; models;
specifications; computer programs; contracts; bids or proposals;
technologies and methods; training methods and processes;
organizational structure; personnel information; payments or rates
paid to consultants or other service providers; and other such
confidential or proprietary information.
	 
	 	 	You acknowledge that Company’s business is highly competitive, that
this Confidential Information constitutes a valuable, special, and
unique asset used by Company in its business, and that protection of
such Confidential Information against unauthorized disclosure and use
is of critical importance to Company. During the course of your
employment with the Company, you had access to and received
Confidential Information. You are obligated to keep confidential all
such Confidential Information for a period of not less than 12 months
following the Effective Date of this Agreement. Notwithstanding
anything to the contrary contained in this Agreement, the definition
of Confidential Information shall not include that sub-set of
confidential information denoted as “trade-secrets” as that term is
defined by law, for which the Company reserves the protections and
limitations provided at law.
	 
	 	 	As an exception to this confidentiality obligation you may disclose
Confidential or proprietary information and trade secrets (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.
	 
	E.	 	Agreement to Return Company Property. Immediately prior to the
Effective Date, 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. In addition, you authorize the Company to deduct from
any final payments to you in accordance with the terms of this
Agreement, any outstanding amounts that you may owe to the Company.

	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 separation
benefits described in Section 2(b) of this letter, you hereby provide the
Company with an irrevocable and unconditional release and discharge of
claims.

	 	 	 	 	 
	Initials: AJS MEW

	 	 	6	 

 

 

Exhibit 10.1

	 	 	This release and discharge of claims applies to (i) Baker Hughes
Incorporated, (ii) to each and all of its parent, subsidiary or 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 401(k) 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 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.

	 	 	 	 	 
	Initials: AJS MEW

	 	 	7	 

 

 

Exhibit 10.1

	B.	 	You have carefully read and fully understand all the provisions
of the release set forth in Section 4 of this letter, 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 is 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.
	 
	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 me. You understand that this Agreement will
not become effective and binding, and that none of the separation
benefits described above in Section 2 of this letter 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 notice of revocation before
the end of the seven-day period described above, this Agreement will
become final, binding and enforceable.

	 	 	The Company’s decision to offer 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, statue, 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 letter, other than those specifically stated in this letter.

	 	 	 	 	 
	Initials: AJS MEW

	 	 	8	 

 

 

Exhibit 10.1

	 	 	The release set forth in Section 4 of this letter 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 letter.
	 
	5.	 	MISCELLANEOUS:

	A.	 	Exclusive Rights and Benefits – 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 Attorney, 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 Attorney.
	 
	B.	 	Entire Agreement – This letter sets forth the entire agreement
between you and the Company with respect to each and every issue
addressed in this letter, 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 letter.
	 
	C:	 	Exclusive Choice of Law and Arbitration Agreement – This letter
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.
	 
	 	 	In the event of any dispute or controversy arising under the
agreement set forth in this letter, 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. 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. 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

	 	 	 	 	 
	Initials: AJS MEW

	 	 	9	 

 

 

Exhibit 10.1

	 	 	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 Sections 1 or 2 of this letter. This
arbitration agreement does not limit your right to file an
administrative charge concerning the validity of the release set
forth in Section 5 of this letter with any appropriate state or
federal agency. Moreover, should it be determined by an arbiter
that any agreement or certification you have made under Section
1.A(a), (b), (c), or (d) of this Agreement is unfulfilled or
inaccurate you agree that the appropriate measure of damages
recoverable by the Company shall include, but not be limited to, the
total of all payments made under this agreement, and such other
damages as the arbitrator shall deem appropriate.
	 
	D:	 	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.
	 
	E:	 	Confidentiality – You agree that, because the agreement set
forth in this letter is a special arrangement, you will keep the
terms of this letter completely confidential and will not disclose,
describe or characterize those terms to any current, former or
prospective employee of the Company, or any representative of the
news media, except as specifically authorized by the Chairman and
Chief Executive Officer of Baker Hughes Incorporated. If any current,
former, or prospective employee of the Company asks about the terms
and conditions of your separation and consulting arrangement with the
Company, you will respond by stating that you reached a
“satisfactory” arrangement with the Company. This confidentiality
provision does not prevent you from sharing information about this
letter with your spouse or your tax advisors provided that you inform
them of the obligation to keep the terms confidential.

Please initial each page and sign below.

EXECUTED in Houston, Texas
this 18th day of March, 2004.

BAKER HUGHES INCORPORATED

	 	 	 
	By:

	 	/s/ Michael E. Wiley
	

	 	
 
	

	 	Michael E. Wiley
	

	 	Chairman, President, and Chief Executive Officer

EXECUTED in Houston, Texas
this 18th day of March, 2004.

	 	 	 
	By:

	 	/s/ Andrew J. Szescila
	

	 	
 
	

	 	Andrew J. Szescila

	 	 	 	 	 
	Initials: AJS MEW

	 	 	10

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