Document:

<PAGE>

                                                                   EXHIBIT 10.12

                            BAKER HUGHES INCORPORATED
                          SUPPLEMENTAL RETIREMENT PLAN

                            (AS AMENDED AND RESTATED
                        EFFECTIVE AS OF JANUARY 1, 2003)

<PAGE>

                                                                   EXHIBIT 10.12

                            BAKER HUGHES INCORPORATED
                          SUPPLEMENTAL RETIREMENT PLAN

                                TABLE OF CONTENTS

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                                                                                                             PAGE
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<S>                                                                                                          <C>
ARTICLE I         DEFINITIONS AND CONSTRUCTION............................................................     1
1.01     Definitions......................................................................................     1
1.02     Number and Gender................................................................................     4
1.03     Headings.........................................................................................     4

ARTICLE II        PARTICIPATION...........................................................................     5
2.01     Eligibility......................................................................................     5
2.02     Commencement of Participation....................................................................     5
2.03     Cessation of Participation Upon Plan Administrator Determination.................................     5
2.04     Suspension of Participation Due to Certain Distributions.........................................     5

ARTICLE III       PARTICIPANT DEFERRALS...................................................................     5
3.01     Amount of Participant Deferrals..................................................................     5
3.02     Participant Deferral Elections...................................................................     6
3.03     Period of Effectiveness of Participant Deferral Elections........................................     6
3.04     Changes to Participant Deferral Election.........................................................     6
3.05     Cancellation of Participant Deferral Election....................................................     6
3.06     Time and Form of Payment Specified in Participant Deferral Election..............................     7
3.07     Irrevocable Change of Election of Time and/or Form of Payment....................................     7
3.08     Suspension of Participant Deferrals Due to Withdrawal for Unforeseeable Financial Emergency......     7

ARTICLE IV        COMPANY DEFERRALS.......................................................................     7
4.01     Company Matching Deferrals.......................................................................     7
4.02     Company Base Thrift Deferrals....................................................................     7
4.03     Company Pension Deferrals........................................................................     8
4.04     Company Discretionary Deferrals..................................................................     8
4.05     Time and Form of Payment Elections for Company Deferrals.........................................     8

ARTICLE V         VALUATION OF ACCOUNTS...................................................................     8

ARTICLE VI        DEEMED INVESTMENT OF FUNDS..............................................................     8

ARTICLE VII       DETERMINATION OF VESTED INTEREST AND FORFEITURES........................................     9
7.01     Vested Interest..................................................................................     9
7.02     Forfeitures  ....................................................................................     9

ARTICLE VIII      ACCELERATED DISTRIBUTIONS...............................................................     9
8.01     Restrictions on In-Service Distributions and Loans...............................................     9
8.02     Emergency Benefit................................................................................     9

ARTICLE IX        TERMINATION BENEFITS....................................................................    10
9.01     Amount of Benefit................................................................................    10
9.02     Time of Payment..................................................................................    10
9.03     Alternative Forms of Benefit Payments............................................................    10
9.04     Accelerated Pay-Out of Certain Benefits..........................................................    11
9.05     Designation of Beneficiaries.....................................................................    11
9.06     Payment of Benefits..............................................................................    11
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                                                                   EXHIBIT 10.12

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9.07     Unclaimed Benefits...............................................................................    11
9.08     Plan Administrator Determination of Pay-Out of Certain Benefits..................................    12
9.09     Statutory Benefits...............................................................................    12

ARTICLE X         ADMINISTRATION OF THE PLAN..............................................................    12
10.01    Plan Administrator...............................................................................    12
10.02    Resignation and Removal..........................................................................    12
10.03    Records and Procedures...........................................................................    12
10.04    Self-Interest of Plan Administrator..............................................................    12
10.05    Compensation and Bonding.........................................................................    12
10.06    Plan Administrator Powers and Duties.............................................................    13
10.07    Reliance on Documents, Instruments, etc..........................................................    13
10.08    Claims Review Procedures; Claims Appeals Procedures..............................................    13
10.09    Company to Supply Information....................................................................    14
10.10    Indemnity .......................................................................................    14

ARTICLE XI        ADMINISTRATION OF FUNDS.................................................................    15
11.01    Payment of Expenses..............................................................................    15
11.02    Trust Fund Property..............................................................................    15

ARTICLE XII       ADOPTION OF PLAN BY OTHER EMPLOYERS.....................................................    15
12.01    Adoption Procedure...............................................................................    15
12.02    No Joint Venture Implied.........................................................................    16

ARTICLE XIII      NATURE OF THE PLAN AND ESTABLISHMENT OF THE TRUST.......................................    16
13.01    Nature of the Plan...............................................................................    16
13.02    Establishment of the Trust.......................................................................    16

ARTICLE XIV       MISCELLANEOUS...........................................................................    16
14.01    Plan Not Contract of Employment..................................................................    16
14.02    Alienation of Interest Forbidden.................................................................    17
14.03    Withholding  ....................................................................................    17
14.04    Amendment and Termination........................................................................    17
14.05    Severability ....................................................................................    17
14.06    Arbitration  ....................................................................................    17
14.07    Governing Law....................................................................................    17
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                                      -ii-

<PAGE>

                                                                   EXHIBIT 10.12

                            BAKER HUGHES INCORPORATED
                          SUPPLEMENTAL RETIREMENT PLAN

                            (AS AMENDED AND RESTATED
                           EFFECTIVE JANUARY 1, 2003)

                                   ARTICLE I
                          DEFINITIONS AND CONSTRUCTION

         1.01     DEFINITIONS. The words and phrases defined in this Article
shall have the meaning set out in the definition unless the context in which
the word or phrase appears reasonably requires a broader, narrower or different
meaning.

                  "ACCOUNT(S)" means all ledger accounts pertaining to a
         Participant or former Participant which are maintained by the Plan
         Administrator to reflect the Company's obligation to the Participant or
         former Participant under the Plan. The Plan Administrator shall
         establish the following subaccounts and any additional subaccounts that
         the Plan Administrator considers necessary to reflect the entire
         interest of the Participant or former Participant under the Plan. Each
         of the subaccounts listed below and any additional subaccounts
         established by the Plan Administrator shall reflect credits and debits
         made to such subaccounts for earnings, losses, distributions and
         forfeitures

                           (a)      Participant Deferral Account - the
                  Participant's or former Participant's deferrals, if any, made
                  pursuant to Section 3.01.

                           (b)      Company Matching Deferral Account - the
                  credits made on behalf of a Participant or former Participant
                  pursuant to Section 4.01.

                           (c)      Company Base Thrift Deferral Account - the
                  credits made on behalf of a Participant or former Participant,
                  if any, made pursuant to Section 4.02.

                           (d)      Company Pension Deferral Account - the
                  credits made on behalf of a Participant or former Participant,
                  if any, made pursuant to Section 4.03.

                           (e)      Company Discretionary Deferral Account - the
                  credits made on behalf of a Participant or former Participant,
                  if any, made pursuant to Section 4.04.

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

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

                  "BAKER HUGHES" means Baker Hughes Incorporated, a Delaware
         corporation.

                  "BASE COMPENSATION" means a Participant's base salary or wages
         measured on an annual basis (as defined in section 3401(a) of the Code
         for purposes of federal income tax withholding) from the Company,
         modified by including any portion thereof that such Participant could
         have received in cash in lieu of (a) Participant Deferrals pursuant to
         Section 3.01 or (b) elective contributions made on his behalf by the
         Company pursuant to a qualified cash or deferred arrangement described
         in section 401(k) of the Code

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                                                                   EXHIBIT 10.12

         and any elective contributions under a cafeteria plan described in
         section 125, and modified further by excluding any bonus; incentive
         compensation; commissions; expense reimbursements or other expense
         allowances; fringe benefits (cash and noncash); moving expenses;
         deferred compensation (other than (a) Participant Deferrals pursuant to
         Section 3.01 or (b) elective contributions to the Company's qualified
         cash or deferred arrangement described in section 401(k) of the Code);
         welfare benefits as defined in the Employee Retirement Income Security
         Act of 1974, as amended; overtime pay; special performance compensation
         amounts and severance compensation.

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

                  "BOARD" means the Board of Directors of Baker Hughes.

                  "BONUS" means each incentive bonus, if any, paid in cash by
         the Company to or for the benefit of an Employee for services rendered
         or labor performed while an Employee. Annual bonuses are generally paid
         with respect to a completed fiscal year by the Company to its employees
         pursuant to the Annual Incentive Plan. An Employee's Bonus shall be
         determined by including any portion thereof that such Employee could
         have received in cash in lieu of (a) any Participant Deferrals pursuant
         to Section 3.01 or (b) elective contributions made on his behalf by the
         Company pursuant to a qualified cash or deferred arrangement (as
         defined in section 401(k) of the Code) or pursuant to a plan maintained
         under section 125 of the Code.

                  "CODE" means the Internal Revenue Code of 1986, as amended
         from time to time.

                  "COMMITTEE" means the Administrative Committee or the
         Investment Committee that may be appointed by the Board as a Plan
         Administrator.

                  "COMPANY" means Baker Hughes or an Employer.

                  "COMPANY BASE THRIFT DEFERRALS" means credits to a
         Participant's Account pursuant to Section 4.02.

                  "COMPANY DEFERRALS" means, collectively or individually, any
         of the deferrals made by the Company pursuant to Sections 4.01, 4.02,
         4.03 and 4.04.

                  "COMPANY DISCRETIONARY DEFERRALS" means credits, if any, to a
         Participant's Account pursuant to Section 4.04.

                   "COMPANY MATCHING DEFERRALS" means credits to a Participant's
         Account pursuant to Section 4.01.

                  "COMPANY PENSION DEFERRALS" means credits to a Participant's
         Account pursuant to Section 4.03.

                   "DEFERRAL PERIOD" means the period of deferral selected by a
         Participant pursuant to Section 3.06 or Section 4.05.

                  "EFFECTIVE DATE" means January 1, 2003.

                  "ELIGIBLE EMPLOYEE" means any individual who, on the date he
         commences participation in the Plan, is employed by the Company on the
         active payroll and who is also an executive salary grade system
         employee (under the Company's then current payroll system categories),
         or any comparable executive designations in any system that replaces
         the executive salary grade system. Once an individual commences
         participation in the Plan, he may continue participation even if his
         payroll system status changes to a level that is below the executive
         salary grade system, provided that the individual continues to remain a
         member

                                       2

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                                                                   EXHIBIT 10.12

         of a select group of management or a highly compensated employee, as
         determined by the Plan Administrator.

                  "EMPLOYER" means any Affiliate that adopts the Plan pursuant
         to the provisions of Article XII.

                  "ENTRY DATE" means the first day of each Plan Year.

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

                  "FUNDS" means the investment funds designated from time to
         time for the deemed investment of Accounts pursuant to Article VI.

                  "INELIGIBLE PENSION PLAN COMPENSATION" means with respect to
         each Participant and each payroll period, the amount of the
         Participant's compensation not taken into account under the Pension
         Plan benefit formula solely because (a) such Participant deferred such
         compensation as a Participant Deferral pursuant to Section 3.01 and/or
         (b) such compensation exceeded the maximum dollar limitation of section
         401(a)(17) of the Code.

                  "INELIGIBLE THRIFT PLAN COMPENSATION" means with respect to
         each Participant and each payroll period, the amount of such
         Participant's compensation for such payroll period that is not
         considered "Compensation" under the Thrift Plan for such payroll period
         solely because (a) such Participant deferred such compensation as a
         Participant Deferral pursuant to Section 3.01 and/or (b) such
         compensation exceeded the maximum dollar limitation of section
         401(a)(17) of the Code.

                  "PARTICIPANT" means each Eligible Employee who has met the
         eligibility requirements for participation in the Plan specified in
         Section 2.01.

                  "PARTICIPANT DEFERRAL" means any deferral made by a
         Participant pursuant to Section 3.01.

                  "PAY" means the sum of a Participant's Base Compensation and
         Bonus.

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

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

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

                  "PLAN ADMINISTRATOR" means Baker Hughes, acting through its
         delegates. Such delegates shall include the Administrative Committee,
         the Investment Committee and any individual Plan Administrator
         appointed by the Board with respect to the employee benefit plans of
         Baker Hughes and its Affiliates, each of which shall have the duties
         and responsibilities assigned to it from time to time by the Board. As
         used in the Plan, the term "Plan Administrator" shall refer to the
         applicable delegate of Baker Hughes as determined pursuant to the
         actions of the Board.

                  "PLAN YEAR" means the twelve-consecutive month period
         commencing January 1 of each year.

                                       3

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                                                                   EXHIBIT 10.12

                  "RETIREMENT" means the Employee's voluntary termination of his
         employment when the Employee has attained at least 55 years of age and
         has at least ten (10) years of service with the Company.

                  "RETIREMENT DATE" means a Participant's or former
         Participant's "Retirement Date" as defined under the Thrift Plan.

                   "TERMINATION OF EMPLOYMENT" means, with respect to each
         Participant or former Participant, the termination of such
         Participant's or former Participant's employment with the Company and
         all Affiliates for any reason whatsoever.

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

                  "TRUST" means the trust, if any, established under the Trust
         Agreement.

                  "TRUST AGREEMENT" means the agreement, if any, entered into
         between the Company and the Trustee pursuant to Article XIII, as
         amended from time to time.

                  "TRUST FUND" means the funds and properties, if any, held
         pursuant to the provisions of the Trust Agreement, together with all
         income, profits, and increments thereto.

                  "TRUSTEE" means the trustee or trustees qualified and acting
         under the Trust Agreement at any time.

                  "UNFORESEEABLE FINANCIAL EMERGENCY" means an unexpected need
         of a Participant for cash that (a) arises from an illness, casualty
         loss, sudden financial reversal, or such other unforeseeable occurrence
         that is caused by an event beyond the control of such Participant, (b)
         would result in severe financial hardship to such Participant if his
         compensation deferral election was not canceled pursuant to Section
         3.08 and/or if a benefit payment pursuant to Section 8.02 was not
         permitted, and (c) is not reasonably satisfiable from other resources
         of such Participant. Cash needs arising from foreseeable events, such
         as the purchase of a house or education expenses for children, shall
         not be considered to be the result of an Unforeseeable Financial
         Emergency. Further, cash needs that may be relieved (a) through
         reimbursement or compensation by insurance or otherwise, (b) by
         liquidation of the Participant's assets, to the extent the liquidation
         of such assets would not itself cause severe financial hardship, or (c)
         by cessation of deferrals under the Plan shall not be considered to be
         Unforeseeable Financial Emergencies.

                  "VESTED INTEREST" means the portion of a Participant's or
         former Participant's Accounts which, pursuant to the Plan, is
         nonforfeitable.

         1.02     NUMBER AND GENDER. Wherever appropriate herein, words used in
the singular shall be considered to include the plural and words used in the
plural shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.

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

                                       4

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                                                                   EXHIBIT 10.12

                                   ARTICLE II
                                  PARTICIPATION

         2.01     ELIGIBILITY.

                  (a)      Each Eligible Employee shall be eligible to become a
         Participant for a Plan Year by electing to make Participant Deferrals
         pursuant to Section 3.01(a).

                  (b)      Each Eligible Employee who is a participant in the
         Thrift Plan during a Plan Year shall be eligible to become a
         Participant for such Plan Year by electing to make Participant
         Deferrals pursuant to Section 3.01(b).

                  (c)      Each Eligible Employee who is a participant in the

         Thrift Plan during a Plan Year shall be a Participant for such Plan
         Year with respect to Company Deferrals pursuant to Section 4.02.

                  (d)      Each Eligible Employee who is a participant in the
         Pension Plan during a Plan Year shall be a Participant of the Plan for
         such Plan Year with respect to Company Deferrals pursuant to Section
         4.03.

         2.02     COMMENCEMENT OF PARTICIPATION. Prior to each Entry Date, the
Plan Administrator shall notify those Eligible Employees who are determined by
the Plan Administrator to be eligible to participate in the Plan as of such
Entry Date. Any such Eligible Employee may elect to make Participant Deferrals
beginning on such Entry Date by effecting, prior to such Entry Date and within
the time period prescribed by the Plan Administrator, the Participant Deferral
election in the form prescribed by the Plan Administrator. Notwithstanding any
provision herein to the contrary, an Eligible Employee who first becomes an
Eligible Employee on other than the first day of a Plan Year may elect to make
Participant Deferrals commencing on the date he first becomes an Eligible
Employee by effecting, prior to or within 30 days after the date he first
becomes an Eligible Employee and within the time period prescribed by the Plan
Administrator, the Participant Deferral election in the form prescribed by the
Plan Administrator.

         2.03     CESSATION OF PARTICIPATION UPON PLAN ADMINISTRATOR
DETERMINATION. Notwithstanding any provision herein to the contrary, an Eligible
Employee who has become a Participant of the Plan shall cease to be entitled to
make Participant Deferrals hereunder or receive credits under Article IV
effective as of any date designated by the Plan Administrator. Any such Plan
Administrator action shall be communicated to the affected individual prior to
the effective date of such action. Any such Eligible Employee may again become
entitled to make Participant Deferrals hereunder and to receive credits under
Article IV beginning on any subsequent Entry Date selected by the Plan
Administrator in its sole discretion.

         2.04     SUSPENSION OF PARTICIPATION DUE TO CERTAIN DISTRIBUTIONS. To
the extent and for the period of time specified in Section 3.08, a Participant's
participation in the Plan shall be suspended upon his making a withdrawal under
Section 8.02.

                                  ARTICLE III
                              PARTICIPANT DEFERRALS

         3.01     AMOUNT OF PARTICIPANT DEFERRALS.

                  (a)      A Participant meeting the eligibility requirements of
                           Section 2.01(a) may:

                           (i)      elect to defer an integral percentage of
                  from 1% to 60% of his Base Compensation for a Plan Year;
                  and/or

                           (ii)     elect to defer an integral percentage of
                  from 1% to 100% of his Bonus for a Plan Year.

                                       5

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                                                                   EXHIBIT 10.12

                  Notwithstanding the foregoing, with respect to an Eligible
         Employee who first becomes a Participant on a date other than an Entry
         Date, (i) any such Participant Deferrals pursuant to Section 3.01(a)(i)
         shall apply only for the portion of such Plan Year commencing with the
         date he first becomes a Participant and ending on the last day of such
         Plan Year, and (ii) any such Participant Deferral pursuant to Section
         3.01(a)(ii) shall become effective as of the first day of the following
         Plan Year.

                  (b)      If a Participant's "Before-Tax Contributions" under
         the Thrift Plan are reduced as a result of the limitations contained in
         sections 401(a)(17) and 402(g) of the Code and a Participant meets the
         eligibility requirements of Section 2.01(b), the Participant may elect
         for a Plan Year to defer an integral percentage of from 0% to 50% of
         the difference between his Base Compensation and the amount the
         Participant elected to defer in Section 3.01(a)(i). Notwithstanding the
         foregoing, any such Participant Deferrals pursuant to this Section
         3.01(b) shall be determined based upon the Participant's elections with
         respect to "Before-Tax Contributions" under the Thrift Plan in effect
         on the first day of such Plan Year (or on the first day the Participant
         became a "Participant" of the Thrift Plan during such Plan Year, if
         later).

         3.02     PARTICIPANT DEFERRAL ELECTIONS. Pay for a Plan Year that is
not deferred pursuant to an election under Sections 3.01(a) and (b) shall be
received by such Participant in cash. A Participant's election to defer an
amount of his Pay pursuant to this Section shall be made by effecting, in the
form prescribed by the Plan Administrator, a Participant Deferral election
pursuant to which the Participant authorizes the Company to reduce his Pay in
the elected amount and the Company, in consideration thereof, agrees to credit
an equal amount to his Participant Deferral Account maintained under the Plan.
The reduction in a Participant's Pay pursuant to his Participant Deferral
election shall be effected by Pay reductions each payroll period as determined
by the Plan Administrator following the effective date of such election. Such
Pay reductions shall be within the Plan Year to which the Participant Deferral
election relates, except that Pay reductions attributable to elections pursuant
to Section 3.01(a)(ii) may be made within a Plan Year if the Bonus to which the
Participant Deferral election relates is paid in the next following Plan Year.
Participant Deferrals made by a Participant shall be credited to his Participant
Deferral Account as of a date determined in accordance with procedures
established from time to time by the Plan Administrator; provided, however, that
such Participant Deferrals shall be credited to his Participant Deferral Account
no later than 30 days after the date upon which the Pay deferred would have been
received by such Participant in cash had he not elected to defer such amount
pursuant to Section 3.01.

         3.03     PERIOD OF EFFECTIVENESS OF PARTICIPANT DEFERRAL ELECTIONS. A
Participant Deferral election pursuant to Sections 3.01(a) and (b) shall become
effective as of the Entry Date (or later initial eligibility date, if
applicable) which is on or after the date the election is effected by the
Participant. With respect to an Eligible Employee who first becomes a
Participant on other than an Entry Date, any such Participant Deferrals pursuant
to Sections 3.01(a)(i) or 3.01(b) shall apply only for the portion of such Plan
Year commencing with the date he first becomes a Participant and ending on the
last day of such Plan Year. A Participant Deferral election pursuant to Section
3.01(a)(ii) shall become effective as of the first day of the Plan Year
following the date the election is effected by the Participant. A Participant
Deferral election shall remain in force and effect for the entire (or partial,
if applicable) Plan Year to which such election relates. A Participant Deferral
election shall be made for each Plan Year, or partial Plan Year, in which the
Participant is eligible to participate. Plan provisions to the contrary
notwithstanding, a Participant Deferral election shall be suspended during any
period of unpaid leave of absence from the Company.

         3.04     CHANGES TO PARTICIPANT DEFERRAL ELECTION. A Participant who
makes a Participant Deferral election may change his election for future
Participant Deferrals as of the Entry Date of any subsequent Plan Year, by
effecting such change in the annual election prior to the Entry Date of such
Plan Year, in the form and within the time period prescribed by the Plan
Administrator. Any such change shall be effective as of the Entry Date of such
Plan Year.

         3.05     CANCELLATION OF PARTICIPANT DEFERRAL ELECTION. A Participant
who has made a Participant Deferral election may cancel his election for future
Participant Deferrals, as of the Entry Date of any subsequent Plan Year, by
effecting such cancellation in the annual election prior to the Entry Date of
such Plan Year, in the form and within the time period prescribed by the Plan
Administrator. Any such change shall be effective as of the Entry Date of such
Plan Year. A Participant who so cancels his Participant Deferral election may
again make a new Participant Deferral election for a subsequent Plan Year, if he
satisfies the eligibility requirements set forth in

                                       6

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                                                                   EXHIBIT 10.12

Section 2.01, by effecting a new Participant Deferral election prior to the
Entry Date of such Plan Year, in the form and within the time period prescribed
by the Plan Administrator.

         3.06     TIME AND FORM OF PAYMENT SPECIFIED IN PARTICIPANT DEFERRAL
ELECTION. A Participant Deferral election shall indicate the applicable time and
form of payment, as provided in Sections 9.02 and 9.03, for the Pay deferred
under the election for such Plan Year and the net income (or net loss) allocated
with respect thereto. Such time and form of payment election for such Plan Year
shall also apply to any Company Deferrals for such Plan Year and the net income
(or net loss) allocated with respect thereto. Each Participant's Accounts shall
be divided into subaccounts to reflect the Participant's various elections
respecting time and form of payment. Notwithstanding the foregoing, with respect
to the portion of a Participant's Account attributable to the amount, if any,
credited to his Account on December 31, 1994, under the Plan as in effect
immediately prior to the January 1, 1995 restatement of the Plan, such portion
and the net income (or net loss) allocated with respect thereto shall be
allocated to a subaccount which shall be payable at the time and in the form
provided under the Plan as in effect immediately prior to such restatement. A
Participant may elect to have his Account or subaccount balance paid or commence
to be paid after the Participant's Termination of Employment (i) upon the
expiration of a specified term or (ii) upon such Termination of Employment (the
"DEFERRAL PERIOD"). The Plan Administrator is authorized to establish written
guidelines concerning limitations on the number of subaccounts respecting time
and form of payment that may be maintained under the Plan for any given
Participant. Any such written guidelines shall be deemed to be incorporated by
reference in the Plan. Once an election as to time and form of payment has been
made for a Plan Year, the election may not be changed by the Participant or
former Participant except as specified in Section 3.07.

         3.07     IRREVOCABLE CHANGE OF ELECTION OF TIME AND/OR FORM OF PAYMENT.
In accordance with procedures established by the Plan Administrator, a
Participant or former Participant may make a one-time irrevocable election to
change the time and/or form of payment he previously selected for all of the
amounts credited to his Account. Any such change election must be made no later
than 18 months before the date on which such amounts were scheduled to be paid
or commence to be paid under the Participant's or former Participant's original
election. In addition, any such change election may not provide for a payment or
commencement of payment that is earlier than 18 months after the date on which
the change election is made. For purposes of calculating the 18-month period,
such period will commence on the first day of the month immediately following
the month in which the election is made.

         3.08     SUSPENSION OF PARTICIPANT DEFERRALS DUE TO WITHDRAWAL FOR
UNFORESEEABLE FINANCIAL EMERGENCY. Upon written petition of a Participant, in
the event that the Plan Administrator determines in its sole discretion that
such Participant has suffered an Unforeseeable Financial Emergency or that such
Participant will, absent termination of such Participant's Participant Deferral
election then in effect, suffer an Unforeseeable Financial Emergency, then the
Participant Deferral election of such Participant then in effect, if any, shall
be terminated as soon as administratively practicable after such determination.
A Participant whose Participant Deferral election has been so terminated may
again make a new Participant Deferral election for a subsequent Plan Year that
commences at least twelve months after the effective date of such termination,
if he satisfies the eligibility requirements set forth in Section 2.01 and by
effecting a new Participant Deferral election for such Plan Year, in the form
and within the time period prescribed by the Plan Administrator.

                                   ARTICLE IV
                                COMPANY DEFERRALS

         4.01     COMPANY MATCHING DEFERRALS. For each payroll period, the
Company shall defer on a Participant's behalf an amount equal to 4% of the
Participant Deferrals made pursuant to Sections 3.01(a) and (b).

                  Company Matching Deferrals made on a Participant's behalf
pursuant to this Section 4.01 shall be credited to such Participant's Company
Matching Deferral Account as of the date the corresponding Participant Deferral
is credited to the Participant's Account.

         4.02     COMPANY BASE THRIFT DEFERRALS. For each payroll period, the
Company shall defer an amount on behalf of each Participant who is entitled to
an allocation of "Company Base Contributions" under the Thrift Plan for such
payroll period. The amount of each such Company Deferral shall be a percentage
of the Participant's

                                       7

<PAGE>

                                                                   EXHIBIT 10.12

Ineligible Thrift Plan Compensation, if any, for such payroll period, with such
percentage being equal to the percentage utilized under the Thrift Plan to
determine the Participant's "Company Base Contribution" for such payroll period
under the Thrift Plan. Company Base Thrift Deferrals on behalf of a Participant
pursuant to this Section 4.02 shall be credited to such Participant's Company
Base Thrift Deferral Account in accordance with the procedures established from
time to time by the Plan Administrator.

         4.03     COMPANY PENSION DEFERRALS. For each payroll period, the
Company shall defer an amount on behalf of each Participant equal to the
percentage of such Participant's Ineligible Pension Plan Compensation, if any,
for such payroll period. Company Pension Deferrals on behalf of a Participant
pursuant to this Section 4.03 shall be credited to such Participant's Company
Pension Deferral Account in accordance with the procedures established from time
to time by the Plan Administrator.

         4.04     COMPANY DISCRETIONARY DEFERRALS. As of any date selected by
the Company, the Company may credit a Participant's Company Discretionary
Deferral Account with Company Discretionary Deferrals in such amount, if any, as
the Company shall determine in its sole discretion. Such credits may be made on
behalf of some Participants but not others, and such credits may vary in amount
among individual Participants.

         4.05     TIME AND FORM OF PAYMENT ELECTIONS FOR COMPANY DEFERRALS. A
Participant who does not have a time and form of payment election in effect
pursuant to Section 3.06 for a given Plan Year shall make a time and form of
payment election, as provided in Sections 9.02 and 9.03, for Company Base Thrift
Deferrals, Company Pension Deferrals, and Company Discretionary Deferrals for
such Plan Year. Such election shall be made in accordance with the same
procedures as apply to Participant Deferral elections under Section 3.06. A
Participant who had made a time and form of payment election pursuant to this
Section 4.05 may change his election for future Company Base Thrift Deferrals,
Company Pension Deferrals, and Company Discretionary Deferrals as of the Entry
Date of any subsequent Plan Year, by effecting a new election prior to the Entry
Date of such Plan Year, in the form and within the time period prescribed by the
Plan Administrator. Each Participant's Accounts shall be divided into
subaccounts to reflect the Participant's various elections respecting time and
form of payment. Once an election as to time and form of payment has been made
for a Plan Year, the election may not be changed by the Participant or former
Participant except as specified in Section 3.07.

                                   ARTICLE V
                             VALUATION OF ACCOUNTS

         All amounts allocated to the Accounts of Participants shall be deemed
to be invested as of the date of such allocation, and the balance of each
Account shall reflect the result of daily pricing of the assets in which such
Account is deemed to be invested from the time of such allocation until the time
of distribution.

                                   ARTICLE VI
                           DEEMED INVESTMENT OF FUNDS

         Participant's and former Participant's Accounts shall be deemed to be
credited with earnings and losses. For the purpose of determining the earnings
or losses to be credited to the Participant's or former Participant's Accounts
under the Plan, the Plan Administrator shall assume that the Participant's or
former Participant's Accounts are invested in units or shares of the Funds in
the proportions selected by the Participant or former Participant in accordance
with procedures established by the Plan Administrator. This amount accrued by
the Plan Administrator as additional deferred compensation shall be a part of
the Company's obligation to the Participant or former Participant. The
determination of deemed earnings and losses on amounts deemed credited to the
Participant's or former Participant's Account shall in no way affect the ability
of the general creditors of the Company to reach the assets of the Company
(including any rabbi trust maintained in connection with the Plan) in the event
of the insolvency or bankruptcy of the Company or place the Participants or
former Participants in a secured position ahead of the general creditors of the
Company. Although a Participant's or former Participant's investment selections
made in accordance with the terms of the Plan and such procedures as may be
established by the Plan Administrator shall be relevant for purposes of
determining the Company's obligation to the Participant or former Participant
under the Plan, there is no requirement that any assets of the Company
(including those held in any rabbi trust) shall be invested in accordance with
the Participant's or former Participant's investment selections.

                                       8

<PAGE>

                                                                   EXHIBIT 10.12

         Each Participant or former Participant shall designate, in accordance
with the procedures established from time to time by the Plan Administrator, the
manner in which the amounts allocated to his Accounts shall be deemed to be
invested from among the Funds made available from time to time for such purpose
by the Plan Administrator. Such Participant or former Participant may designate
one of such Funds for the deemed investment of all such amounts allocated to his
Accounts or he may split the deemed investment of such amounts allocated to his
Accounts among such Funds in such increments as the Plan Administrator may
prescribe. If a Participant or former Participant fails to make a proper
designation, then his Accounts shall be deemed to be invested in the Fund or
Funds designated in a uniform and nondiscriminatory manner by the Plan
Administrator from time to time.

         A Participant may change his deemed investment designation for future
deferrals to be allocated to his Accounts. Any such change shall be made in
accordance with the procedures established by the Plan Administrator, and the
frequency of such changes may be limited by the Plan Administrator.

         A Participant or former Participant may elect to convert his deemed
investment designation with respect to the amounts already allocated to his
Accounts. Any such conversion shall be made in accordance with the procedures
established by the Plan Administrator, and the frequency of such conversions may
be limited by the Plan Administrator.

                                  ARTICLE VII
                DETERMINATION OF VESTED INTEREST AND FORFEITURES

         7.01     VESTED INTEREST. A Participant or former Participant shall
have a 100% Vested Interest in amounts credited to his Participant Deferral
Account and his Company Matching Deferral Account at all times. A Participant or
former Participant shall have a Vested Interest in the amounts credited to his
Company Base Thrift Deferral Account and Company Discretionary Deferral Account
equal to his nonforfeitable interest in his "Company Non-Matching Accounts"
under the Thrift Plan. A Participant or former Participant shall have a Vested
Interest in the amounts credited to his Company Pension Deferral Account equal
to his nonforfeitable interest in his account under the Pension Plan. Further, a
Participant or former Participant shall have a 100% Vested Interest in amounts
credited to his Company Base Thrift Deferral Account, Company Pension Deferral
Account, and Company Discretionary Deferral Account upon such Participant's or
former Participant's Termination of Employment after attainment of his
Retirement Date or by reason of death.

         7.02     FORFEITURES. A Participant or former Participant who incurs a
Termination of Employment with a Vested Interest in amounts credited to his
Company Base Thrift Deferral Account, Company Pension Deferral Account, and
Company Discretionary Deferral Account that is less than 100% (determined after
giving effect to any provision in Section 7.01 that may provide for an increase
in such Participant's Vested Interest upon a Termination of Employment) shall
forfeit to the Company the nonvested portion of amounts credited to his Company
Base Thrift Deferral Account, Company Pension Deferral Account, and Company
Discretionary Deferral Account as of the date of such Termination of Employment.

                                  ARTICLE VIII
                           ACCELERATED DISTRIBUTIONS

         8.01     RESTRICTIONS ON IN-SERVICE DISTRIBUTIONS AND LOANS. Except as
provided in Section 8.02, Participants shall not be permitted to make
withdrawals from the Plan prior to incurring a Termination of Employment.
Participants shall not, at any time, be permitted to borrow from the Trust Fund.
Following Termination of Employment, the amounts credited to a Participant's
Accounts shall be payable to such Participant in accordance with the provisions
of Article IX.

         8.02     EMERGENCY BENEFIT. In the event that the Plan Administrator,
upon written petition of a Participant who has not incurred a Termination of
Employment, determines in its sole discretion that such Participant has suffered
an Unforeseeable Financial Emergency, such Participant shall be entitled to a
distribution in an amount not to exceed the lesser of (a) the amount determined
by the Plan Administrator as necessary to meet

                                        9

<PAGE>

                                                                   EXHIBIT 10.12

such Participant's needs created by the Unforeseeable Financial Emergency or (b)
the then value of such Participant's Vested Interest in his Accounts. Such
benefit shall be paid in a single lump sum payment as soon as administratively
practicable after the Plan Administrator has made its determinations with
respect to the availability and amount of such benefit. If a Participant's
Accounts are deemed to be invested in more than one Fund, such benefit shall be
distributed pro rata from each Fund in which such Accounts are deemed to be
invested. If a Participant's Accounts contain more than one distribution
subaccount, such benefit shall be considered to have been distributed, first,
from the subaccount with respect to which the earliest distribution would be
made, then, from the subaccount with respect to which the next earliest
distribution would be made, and continuing in such manner until the amount of
such distribution has been satisfied.

                                   ARTICLE IX
                              TERMINATION BENEFITS

         9.01     AMOUNT OF BENEFIT. Upon the expiration of the Deferral Period,
the Participant (or, in the event of the death of the Participant while employed
by the Company or an Affiliate, the Participant's designated beneficiary) or
former Participant shall be entitled to a benefit equal in value to the
Participant's or former Participant's Vested Interest in the balance in his
Accounts as of the date the payment of such benefit is to commence pursuant to
Section 9.02 (adjusted for subsequent deemed investment gains or losses in the
case of benefits paid in the form of installments).

         9.02     TIME OF PAYMENT. Payment of a Participant's or former
Participant's benefit under Section 9.01 shall be made or shall commence, with
respect to such Participant's or former Participant's Accounts, or with respect
to such Participant's or former Participant's subaccounts established pursuant
to Section 3.06 and/or Section 4.05 separately and respectively, as follows. To
the extent that the Participant or former Participant elected to have his
Accounts or subaccounts paid upon his Termination of Employment, the
Participant's or former Participant's benefit shall be paid or commence to be
paid as soon as administratively practicable after the last day of the calendar
year coincident with or following the date the Participant or former Participant
incurs a Termination of Employment. To the extent that the Participant or former
Participant elected to have his Accounts or subaccounts paid after a specified
term, the Participant's or former Participant's benefit shall be paid or
commence to be paid as soon as administratively practicable after the expiration
of such specified term. With respect to any portion of a Participant's or former
Participant's benefit for which no time of payment election is in effect,
payment of such amount shall be made or commence as soon as administratively
practicable after the last day of the Plan Year during which the Participant or
former Participant incurs a Termination of Employment. A Participant's or former
Participant's benefit shall not, however, be paid or commence payment prior to
the date that all Participant Deferrals and Company Deferrals made pursuant to
the Plan have been allocated to such Participant's or former Participant's
Accounts.

         9.03     ALTERNATIVE FORMS OF BENEFIT PAYMENTS. A Participant's or
former Participant's benefit under Section 9.01 shall be paid, with respect to
such Participant's or former Participant's Accounts, or with respect to such
Participant's or former Participant's subaccounts established pursuant to
Section 3.06 and/or Section 4.05 separately and respectively, in one of the
following forms irrevocably elected by such Participant or former Participant
pursuant to Section 3.06 and/or Section 4.05:

                  (a)      A single lump sum payment; or

                  (b)      Any number (from two to 20 as designated by such
         Participant or former Participant) of annual installment payments and,
         in the event of such Participant's or former Participant's death prior
         to the receipt of all of the elected installment payments, the
         remaining installments shall be paid to such Participant's or former
         Participant's designated beneficiary as provided in Section 9.05. The
         amount of each annual installment shall be computed by dividing the
         Vested Interest in the unpaid balance in the Participant's or former
         Participant's Accounts as of the date of payment of such annual
         installment by the number of annual installments remaining.

                                       10

<PAGE>

                                                                   EXHIBIT 10.12

With respect to any portion of a Participant's or former Participant's benefit
for which no form of payment election is in effect, such amount shall be paid in
the form of 15 annual installment payments to such Participant or former
Participant or, in the event of such Participant's or former Participant's death
prior to his receipt of all such installments, to his designated beneficiary as
provided in Section 9.05; provided, however, that the Plan Administrator may, in
its sole discretion, elect to make such benefit payment in any other available
form. If a Participant or former Participant dies prior to the date the payment
of his benefit begins and if no form of payment election is in effect for any
portion of such Participant's or former Participant's benefit, such amount shall
be paid to the Participant's or former Participant's designated beneficiary in
the form described in the preceding sentence. If a Participant or former
Participant dies prior to the date the payment of his benefit begins with a form
of payment election in effect, then benefit payments shall be made to the
Participant's or former Participant's designated beneficiary in the form elected
by the Participant or former Participant.

         9.04     ACCELERATED PAY-OUT OF CERTAIN BENEFITS. Notwithstanding any
provision in Section 9.03 to the contrary, if a Participant's or former
Participant's benefit payments respecting any one subaccount established
pursuant to Section 3.06 or Section 4.05 are to be paid in a form other than a
single lump sum payment and the aggregate Vested Interest in the amount in such
subaccount at the time of commencement of such payments is less than $50,000,
then the Plan Administrator may, in its sole discretion, elect to cause such
Vested Interest in such subaccount to be paid in a single lump sum payment.

         9.05     DESIGNATION OF BENEFICIARIES.

                  (a)      Each Participant or former Participant shall have the
         right to designate the beneficiary or beneficiaries to receive payment
         of his benefit in the event of his death. Each such designation shall
         be made by executing the beneficiary designation form prescribed by the
         Plan Administrator and filing same with the Plan Administrator. Any
         such designation may be changed at any time by execution of a new
         designation in accordance with this Section.

                  (b)      If no such designation is on file with the Plan
         Administrator at the time of the death of the Participant or former
         Participant or such designation is not effective for any reason as
         determined by the Plan Administrator, then the designated beneficiary
         or beneficiaries to receive such benefit shall be as follows:

                           (i)      If a Participant or former Participant
                  leaves a surviving spouse, his benefit shall be paid to such
                  surviving spouse;

                           (ii)     If a Participant or former Participant
                  leaves no surviving spouse, his benefit shall be paid to such
                  Participant's or former Participant's executor or
                  administrator, or to his heirs at law if there is no
                  administration of such Participant's or former Participant's
                  estate.

         9.06     PAYMENT OF BENEFITS. To the extent the Trust Fund has
sufficient assets, the Trustee shall pay benefits to Participants or former
Participants or their respective beneficiaries, except to the extent the Company
pays the benefits directly and provides adequate evidence of such payment to the
Trustee. To the extent the Trustee does not or cannot pay benefits out of the
Trust Fund, the benefits shall be paid by the Company. Any benefit payments made
to a Participant, or former Participant, or for his benefit pursuant to any
provision of the Plan shall be debited to such Participant's or former
Participant's Accounts. All benefit payments shall be made in cash to the
fullest extent practicable.

         9.07     UNCLAIMED BENEFITS. In the case of a benefit payable on behalf
of a Participant or former Participant, if the Plan Administrator is unable,
after reasonable efforts, to locate the Participant, the former Participant or
the beneficiary to whom such benefit is payable, upon the Plan Administrator's
determination thereof, such benefit shall be forfeited to the Company.
Notwithstanding the foregoing, if subsequent to any such forfeiture the
Participant, the former Participant or beneficiary to whom such benefit is
payable makes a valid claim for such benefit, such forfeited benefit (without
any adjustment for earnings or loss) shall be restored to the Plan by the
Company and paid in accordance with the Plan.

                                     11

<PAGE>

                                                                   EXHIBIT 10.12

         9.08     PLAN ADMINISTRATOR DETERMINATION OF PAY-OUT OF CERTAIN
BENEFITS. Notwithstanding any provision in Section 3.06 to the contrary, the
form of payment of a Participant's or former Participant's benefits with respect
to the portion of his Account attributable to the amount, if any, credited to
his Account on December 31, 1994, under the Plan as in effect immediately prior
to the January 1, 1995 restatement of the Plan, and the net income (or net loss)
allocated with respect thereto may, in the sole discretion of the Plan
Administrator, be changed from the form elected by such Participant or former
Participant pursuant to the provisions of the Plan as in effect immediately
prior to the January 1, 1995 restatement of the Plan to one or more other forms
provided in Section 9.03. In making its determination as to the form(s) of
payment, the Plan Administrator may consider the age, family status, health,
financial status, or such other facts as it deems relevant respecting the
Participant or former Participant. The Participant or former Participant may,
but shall not be required to, express his preference to the Plan Administrator
as to such form(s) of payment, but the Plan Administrator shall be under no
obligation to follow such preference. Any such change shall be prior to the time
such portion becomes payable to such Participant or former Participant.

         9.09     STATUTORY BENEFITS. If any benefit obligations are required to
be paid under the Plan to a Participant or former Participant in conjunction
with severance of employment under the laws of the country where the Participant
or former Participant is employed or under federal, state or local law, the
benefits paid to a Participant or former Participant pursuant to the provisions
of the Plan will be deemed to be in satisfaction of any statutorily required
benefit obligations.

                                   ARTICLE X
                           ADMINISTRATION OF THE PLAN

         10.01    PLAN ADMINISTRATOR. Baker Hughes shall be the "Plan
Administrator" and the "named fiduciary" for purposes of ERISA and shall be
subject to service of process on behalf of the Plan.

         10.02    RESIGNATION AND REMOVAL. The members of a Committee serving as
Plan Administrator shall serve at the pleasure of the Board; they may be
officers, directors, or Employees of the Company or any other individuals. At
any time during his term of office, any member of a Committee or any individual
serving as Plan Administrator may resign by giving written notice to the Board,
such resignation to become effective upon the appointment of a substitute or, if
earlier, the lapse of thirty days after such notice is given as herein provided.
At any time during its term of office, and for any reason, any member of a
Committee or any individual serving as Plan Administrator may be removed by the
Board.

         10.03    RECORDS AND PROCEDURES. The Plan Administrator shall keep
appropriate records of its proceedings and the administration of the Plan and
shall make available for examination during business hours to any Participant,
former Participant or the beneficiary of any Participant or former Participant
such records as pertain to that individual's interest in the Plan. If a
Committee is performing duties as the Plan Administrator, the Committee shall
designate the individual or individuals who shall be authorized to sign for the
Plan Administrator and, upon such designation, the signature of such individual
or individuals shall bind the Plan Administrator.

         10.04    SELF-INTEREST OF PLAN ADMINISTRATOR. Neither the members of a
Committee nor any individual Plan Administrator shall have any right to vote or
decide upon any matter relating solely to himself under the Plan or to vote in
any case in which his individual right to claim any benefit under the Plan is
particularly involved. In any case in which any Committee member or individual
Plan Administrator is so disqualified to act, the other members of the Committee
shall decide the matter in which the Committee member or individual Plan
Administrator is disqualified.

         10.05    COMPENSATION AND BONDING. Neither the members of a Committee
nor any individual Plan Administrator shall receive compensation with respect to
their services on the Committee or as Plan Administrator. To the extent required
by applicable law, or required by the Company, neither the members of a
Committee nor any individual Plan Administrator shall furnish bond or security
for the performance of their duties hereunder.

                                       12

<PAGE>

                                                                   EXHIBIT 10.12

         10.06    PLAN ADMINISTRATOR POWERS AND DUTIES. The Plan Administrator
shall supervise the administration and enforcement of the Plan according to the
terms and provisions hereof and shall have all powers necessary to accomplish
these purposes, including, but not by way of limitation, the right, power, and
authority:

                  (a)      to make rules, regulations, and bylaws for the
         administration of the Plan that are not inconsistent with the terms and
         provisions hereof, and to enforce the terms of the Plan and the rules
         and regulations promulgated thereunder by the Plan Administrator;

                  (b)      to construe in its discretion all terms, provisions,
         conditions, and limitations of the Plan;

                  (c)      to correct any defect or to supply any omission or to
         reconcile any inconsistency that may appear in the Plan in such manner
         and to such extent as it shall deem in its discretion expedient to
         effectuate the purposes of the Plan;

                  (d)      to employ and compensate such accountants, attorneys,
         investment advisors, and other agents, employees, and independent
         contractors as the Plan Administrator may deem necessary or advisable
         for the proper and efficient administration of the Plan;

                  (e)      to determine in its discretion all questions relating
         to eligibility;

                  (f)      to determine whether and when a Participant has
         incurred a Termination of Employment, and the reason for such
         termination;

                  (g)      to make a determination in its discretion as to the
         right of any individual to a benefit under the Plan and to prescribe
         procedures to be followed by distributees in obtaining benefits
         hereunder;

                  (h)      to receive and review reports from the Trustee as to
         the financial condition of the Trust Fund, including its receipts and
         disbursements; and

                  (i)      to establish or designate Funds as deemed investment
         options as provided in Article VI.

         10.07    RELIANCE ON DOCUMENTS, INSTRUMENTS, ETC. The Plan
Administrator may rely on any certificate statement or other representation made
on behalf of the Company, any Employee or any Participant, which the Plan
Administrator in good faith believes to be genuine, and on any certificate,
statement, report or other representation made to it by any agent or any
attorney, accountant or other expert retained by it or the Company in connection
with the operation and administration of the Plan.

         10.08    CLAIMS REVIEW PROCEDURES; CLAIMS APPEALS PROCEDURES.

                  (a)      Claims Review Procedures. When a benefit is due, the
         Participant, or the person entitled to Benefits under Section 9.05,
         should submit a claim to the office designated by the Plan
         Administrator to receive claims. Under normal circumstances, the Plan
         Administrator will make a final decision as to a claim within 90 days
         after receipt of the claim. If the Plan Administrator notifies the
         claimant in writing during the initial 90-day period, it may extend the
         period up to 180 days after the initial receipt of the claim. The
         written notice must contain the circumstances necessitating the
         extension and the anticipated date for the final decision. If a claim
         is denied during the claims period, the Plan Administrator must notify
         the claimant in writing, and the written notice must set forth in a
         manner calculated to be understood by the claimant:

                  (1)      the specific reason or reasons for the denial;

                  (2)      specific reference to the Plan provisions on which
                  the denial is based;

                                     13

<PAGE>

                                                                   EXHIBIT 10.12

                  (3)      a description of any additional material or
                  information necessary for the claimant to perfect the claim
                  and an explanation of why such material or information is
                  necessary; and

                  (4)      an explanation of the Plan claims review procedures
                  and time limits, including a statement of the claimant's right
                  to bring a civil action under section 502(a) of ERISA.

         If a decision is not given to the Participant within the claims review
         period, the claim is treated as if it were denied on the last day of
         the claims review period.

                  (b)      Claims Appeals Procedures. For purposes of this
         section the Participant or the person entitled to Benefits under
         Section 10 is referred to as the "claimant." If a claimant's claim made
         pursuant to Section 10.08(a) is denied and he wants a review, he must
         apply to the Plan Administrator in writing. That application can
         include any arguments, written comments, documents, records, and other
         information relating to the claim for benefits. In addition, the
         claimant is entitled to receive on request and free of charge
         reasonable access to and copies of all information relevant to the
         claim. For this purpose, "relevant" means information that was relied
         on in making the benefit determination or that was submitted,
         considered or generated in the course of making the determination,
         without regard to whether it was relied on, and information that
         demonstrates compliance with the Plan's administrative procedures and
         safeguards for assuring and verifying that Plan provisions are applied
         consistently in making benefit determinations. The Plan Administrator
         must take into account all comments, documents, records, and other
         information submitted by the claimant relating to the claim, without
         regard to whether the information was submitted or considered in the
         initial benefit determination. The claimant may either represent
         himself or appoint a representative, either of whom has the right to
         inspect all documents pertaining to the claim and its denial. The Plan
         Administrator can schedule any meeting with the claimant or his
         representative that it finds necessary or appropriate to complete its
         review.

                  The request for review must be filed within 90 days after the
         denial. If it is not, the denial becomes final. If a timely request is
         made, the Plan Administrator must make its decision, under normal
         circumstances, within 60 days of the receipt of the request for review.
         However, if the Plan Administrator notifies the claimant prior to the
         expiration of the initial review period, it may extend the period of
         review up to 120 days following the initial receipt of the request for
         a review. All decisions of the Plan Administrator must be in writing
         and must include the specific reasons for its action, the Plan
         provisions on which its decision is based, and a statement that the
         claimant is entitled to receive, upon request and free of charge,
         reasonable access to, and copies of, all documents, records, and other
         information relevant to the claimant's claim for benefits, and a
         statement of the claimant's right to bring an action under section
         502(a) of ERISA If a decision is not given to the claimant within the
         review period, the claim is treated as if it were denied on the last
         day of the review period.

         10.09    COMPANY TO SUPPLY INFORMATION. The Company shall supply full
and timely information to the Plan Administrator, including, but not limited to,
information relating to each Participant's Base Compensation, Bonus, Ineligible
Thrift Plan Compensation, Ineligible Pension Plan Compensation, age, Retirement,
death, or other cause of Termination of Employment and such other pertinent
facts as the Plan Administrator may require. The Company shall advise the
Trustee of such of the foregoing facts as are deemed necessary for the Trustee
to carry out the Trustee's duties under the Plan and the Trust Agreement. When
making a determination in connection with the Plan, the Plan Administrator shall
be entitled to rely upon the aforesaid information furnished by the Company.

         10.10    INDEMNITY. To the extent permitted by applicable law, the
Company shall indemnify and save harmless the Board, each member of the
Committee, each delegate of the Committee or the Board and the Plan
Administrator against any and all expenses, liabilities and claims (including
legal fees incurred to investigate or defend against such liabilities and
claims) arising out of their discharge in good faith of responsibilities under
or incident to the Plan. Expenses and liabilities arising out of willful
misconduct shall not be covered under this indemnity. This indemnity shall not
preclude such further indemnities as may be available under insurance purchased
by the Company or provided by the Company under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, as such indemnities are
permitted under applicable law.

                                       14

<PAGE>

                                                                   EXHIBIT 10.12

                                   ARTICLE XI
                            ADMINISTRATION OF FUNDS

         11.01    PAYMENT OF EXPENSES. All expenses incident to the
administration of the Plan and Trust, including but not limited to, legal,
accounting, Trustee fees, and expenses of the Plan Administrator, may be paid by
the Company and, if not paid by the Company, shall be paid by the Trustee from
the Trust Fund, if any.

         11.02    TRUST FUND PROPERTY. All income, profits, recoveries,
contributions, forfeitures and any and all moneys, securities and properties of
any kind at any time received or held by the Trustee, if any, shall be held for
investment purposes as a commingled Trust Fund pursuant to the terms of the
Trust Agreement. The Plan Administrator shall maintain one or more Accounts in
the name of each Participant or former Participant, but the maintenance of an
Account designated as the Account of a Participant or former Participant shall
not mean that such Participant or former Participant shall have a greater or
lesser interest than that due him by operation of the Plan and shall not be
considered as segregating any funds or property from any other funds or property
contained in the commingled fund. No Participant or former Participant shall
have any title to any specific asset in the Trust Fund, if any.

                                  ARTICLE XII
                      ADOPTION OF PLAN BY OTHER EMPLOYERS

         12.01    ADOPTION PROCEDURE.

                  (a)      With the written approval of the Plan Administrator,
         any entity that is an Affiliate may adopt the Plan by appropriate
         action of its board of directors or noncorporate counterpart, as
         evidenced by a written instrument executed by an authorized officer of
         such entity or an executed adoption agreement (approved by the board of
         directors or noncorporate counterpart of the Affiliate), agreeing to be
         bound by all the terms, conditions and limitations of the Plan except
         those, if any, specifically described in the adoption instrument, and
         providing all information required by the Plan Administrator. The Plan
         Administrator and the adopting Affiliate may agree to incorporate
         specific provisions relating to the operation of the Plan that apply to
         the adopting Affiliate only and shall become, as to such adopting
         Affiliate and its employees, a part of the Plan.

                  (b)      The provisions of the Plan may be modified so as to
         increase the obligations of an adopting Affiliate only with the consent
         of such Affiliate, which consent shall be conclusively presumed to have
         been given by such Affiliate unless the Affiliate gives the Company
         written notice of its rejection of the amendment within 30 days after
         the adoption of the amendment.

                  (c)      The provisions of the Plan shall apply separately and
         equally to each adopting Affiliate and its employees in the same manner
         as is expressly provided for the Company and its employees, except that
         the power to appoint or otherwise affect the Plan Administrator and the
         power to amend or terminate the Plan shall be exercised by the Company.
         The Plan Administrator shall act as the agent for each Affiliate that
         adopts the Plan for all purposes of administration thereof.

                  (d)      Any adopting Affiliate may, by appropriate action of
         its board of directors or noncorporate counterpart, terminate its
         participation in the Plan. Moreover, the Plan Administrator may, in its
         discretion, terminate an Affiliate's participation in the Plan at any
         time.

                  (e)      The Plan will terminate with respect to any Affiliate
         that has adopted the Plan pursuant to this Section if the Affiliate
         ceases to be an Affiliate or revokes its adoption of the Plan by
         resolution of its board of directors or noncorporate counterpart
         evidenced by a written instrument executed by an authorized officer of
         the Affiliate. If the Plan terminates with respect to any Affiliate,
         the employees of that Affiliate will no longer be eligible to be
         Participants in the Plan.

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

                                       15

<PAGE>

                                                                   EXHIBIT 10.12

         12.02    NO JOINT VENTURE IMPLIED. The document which evidences the
adoption of the Plan by an Affiliate shall become a part of the
Plan. However, neither the adoption of the Plan by an Affiliate nor any act
performed by it in relation to the Plan shall ever create a joint venture or
partnership relation between it and any other Affiliate.

                                  ARTICLE XIII
                               NATURE OF THE PLAN
                         AND ESTABLISHMENT OF THE TRUST

         13.01    NATURE OF THE PLAN. The Company intends and desires by the
adoption of the Plan to recognize the value to the Company of the past and
present services of employees covered by the Plan and to encourage and assure
their continued service with the Company by making more adequate provision for
their future retirement security. The establishment of the Plan is, in part,
made necessary by certain benefit limitations which are imposed on the Thrift
Plan and the Pension Plan by the Code. The Plan is intended to constitute an
unfunded, unsecured plan of deferred compensation for a select group of
management or highly compensated employees of the Company. Plan benefits herein
provided are a contractual obligation of the Company which shall be paid out of
the Company's general assets. Nevertheless, subject to the terms hereof and of
the Trust Agreement, the Company may transfer money or other property to the
Trustee to provide Plan benefits hereunder, and the Trustee shall pay Plan
benefits to Participants, former Participants and their beneficiaries out of the
Trust Fund. To the extent the Company transfers assets to the Trustee pursuant
to the Trust Agreement, the Plan Administrator may, but need not, establish
procedures for the Trustee to invest the Trust Fund in accordance with each
Participant's or former Participant's designated deemed investments pursuant to
Article VI respecting the portion of the Trust Fund assets equal to such
Participant's or former Participant's Accounts.

         13.02    ESTABLISHMENT OF THE TRUST. The Board, in its sole discretion,
may establish the Trust and direct Baker Hughes, for and on behalf of each
Company, to enter into the Trust Agreement. In such event, the Company shall
remain the owner of all assets in the Trust Fund and the assets shall be subject
to the claims of the Company's creditors if the Company ever becomes insolvent.
For purposes hereof, the Company shall be considered "insolvent" if (a) the
Company is unable to pay its debts as they become due or (b) the Company is
subject to a pending proceeding as a debtor under the United States Bankruptcy
Code (or any successor federal statute). The chief executive officer of the
Company and its board of directors shall have the duty to inform the Trustee in
writing if the Company becomes insolvent. Such notice given under the preceding
sentence by any party shall satisfy all of the parties' duty to give notice.
When so informed, the Trustee shall suspend payments to the Participants and
former Participants and hold the assets for the benefit of the Company's general
creditors. If the Company subsequently alleges that it is no longer insolvent or
if the Trustee receives a written allegation from a third party that the Company
is insolvent, the Trustee shall suspend payments to the Participants and former
Participants and hold the Trust Fund for the benefit of the Company's general
creditors, and shall determine in accordance with the Trust Agreement whether
the Company is insolvent. If the Trustee determines that the Company is not
insolvent, the Trustee shall resume payments to the Participants and former
Participants. No Participant, former Participant or beneficiary shall have any
preferred claim to, or any beneficial ownership interest in, any assets of the
Trust Fund, and, upon commencement of participation in the Plan, each
Participant and former Participant shall have agreed to waive his priority
credit position, if any, under applicable state law with respect to the assets
of the Trust Fund.

                                   ARTICLE XIV
                                  MISCELLANEOUS

         14.01    PLAN NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance
of the Plan shall not be deemed to be a contract between the Company and any
individual or to be consideration for the employment of any individual. Nothing
herein contained shall be deemed to (a) give any individual the right to be
retained in the employ of the Company, (b) restrict the right of the Company to
discharge any individual at any time, (c) give the Company the right to require
any individual to remain in the employ of the Company, or (d) restrict any
individual's right to terminate his employment at any time.

                                       16

<PAGE>

                                                                   EXHIBIT 10.12

         14.02    ALIENATION OF INTEREST FORBIDDEN. The interest of a
Participant, former Participant or his beneficiary or beneficiaries hereunder
may not be sold, transferred, assigned, or encumbered in any manner, either
voluntarily or involuntarily, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be null and void;
neither shall the benefits hereunder be liable for or subject to the debts,
contracts, liabilities, engagements or torts of any individual to whom such
benefits or funds are payable, nor shall they be an asset in bankruptcy or
subject to garnishment, attachment or other legal or equitable proceedings.

         14.03    WITHHOLDING. All credits to a Participant's or former
Participant's Accounts and payments provided for hereunder shall be subject to
applicable withholding and other deductions as shall be required of the Company
under any applicable local, state or federal law.

         14.04    AMENDMENT AND TERMINATION. The Board, may from time to time,
in its discretion, amend, in whole or in part, any or all of the provisions of
the Plan on behalf of any Company; provided, however, that no amendment may be
made that would impair the rights of a Participant or former Participant with
respect to amounts already credited to his Accounts. The Board may terminate the
Plan at any time. If the Plan is terminated, the balance credited to a
Participant's or former Participant's Account shall be paid to such Participant,
or former Participant, or his designated beneficiary in the manner specified by
the Plan Administrator, which may include the payment of a single lump sum
payment in full satisfaction of all of such Participant's, former Participant's
or beneficiary's benefits hereunder.

         14.05    SEVERABILITY. If any provision of the Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions hereof; instead, each provision shall be fully
severable and the Plan shall be construed and enforced as if said illegal or
invalid provision had never been included herein.

         14.06    ARBITRATION. Any controversy arising out of or relating to the
Plan, including without limitation, any and all disputes, claims (whether in
tort, contract, statutory or otherwise) or disagreements concerning the
interpretation or application of the provisions of the Plan, the Company's
employment of the Participant, or former Participant, and the termination of
that employment, shall be resolved by arbitration in accordance with the
Employee Benefit Plan Claims Arbitration Rules of the American Arbitration
Association (the "AAA") then in effect. No arbitration proceeding relating to
the Plan may be initiated by either the Company or the Participant, or former
Participant, unless the claims review and appeals procedures specified in
Section 10.08 have been exhausted. Within ten (10) business days of the
initiation of an arbitration hereunder, the Company and the Participant, or
former Participant, will each separately designate an arbitrator, and within
twenty (20) business days of selection, the appointed arbitrators will appoint a
neutral arbitrator from the panel of AAA National Panel of Employee Benefit Plan
Claims Arbitrators. The arbitrators shall issue their written decision
(including a statement of finding of facts) within thirty (30) days from the
date of the close of the arbitration hearing. The decision of the arbitrators
selected hereunder will be final and binding on both parties. This arbitration
provision is expressly made pursuant to and shall be governed by the Federal
Arbitration Act, 9 U.S.C. Sections 1-16 (or replacement or successor statute).
Pursuant to Section 9 of the Federal Arbitration Act, the Company and any
Participant agrees that any judgment of the United States District Court for the
District in which the headquarters of Baker Hughes is located at the time of
initiation of an arbitration hereunder shall be entered upon the award made
pursuant to the arbitration. Nothing in this Section 14.06 shall be construed
to, in any way, limit the scope and effect of Article X. In any arbitration
proceeding full effect shall be given to the rights, powers, and authorities of
the Plan Administrator under Article X.

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

                                       17<PAGE>

                                                                   EXHIBIT 10.13

                            BAKER HUGHES INCORPORATED
                            EXECUTIVE SEVERANCE PLAN

                          (EFFECTIVE NOVEMBER 1, 2002)

<PAGE>

                                                                   EXHIBIT 10.33

                            BAKER HUGHES INCORPORATED
                            EXECUTIVE SEVERANCE PLAN

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>    <C>                                                                                                      <C>
1.     ESTABLISHMENT, OBJECTIVE AND DURATION..............................................................       1
       1.1    Establishment...............................................................................       1
       1.2    Objective...................................................................................       1
       1.3    Duration....................................................................................       1

2.     DEFINITIONS........................................................................................       1
       2.1    Capitalized Terms...........................................................................       1
       2.2    Number and Gender...........................................................................       4
       2.3    Headings....................................................................................       4

3.     ELIGIBILITY........................................................................................       4

4.     BENEFITS...........................................................................................       4
       (a)    Base Compensation...........................................................................       4
       (b)    Medical, Dental and Vision Insurance........................................................       4
       (c)    Outplacement................................................................................       4

5.     OTHER BENEFIT PROGRAMS; PERQUISITES; COMPANY PROPERTY; EXPENSE ACCOUNT.............................       5
       5.1    Other Benefit Programs......................................................................       5
              (a) Bonus...................................................................................       5
              (b) Stock Options; Other Awards.............................................................       5
              (c) Pension, Thrift and Supplemental Retirement Plans.......................................       5
              (d) Employee Stock Purchase Plan............................................................       5
              (e) Post-Retirement Health Care or Life Insurance...........................................       5
              (f) Other Insurance.........................................................................       5
       5.2    Perquisites; Company Property; Expense Account..............................................       6
              (a) Perquisites.............................................................................       6
              (b) Company Property........................................................................       6
              (c) Expense Account.........................................................................       6

6.     TIME OF BENEFITS PAYMENTS..........................................................................       6

7.     WITHHOLDING........................................................................................       6

8.     RIGHT OF OFFSET....................................................................................       7

9.     REDUCTION FOR OTHER SEVERANCE BENEFITS; NON-EXCLUSIVITY OF RIGHTS;
              STATUTORY SEVERANCE.........................................................................       7
       9.1    Reduction for Other Severance Benefits......................................................       7
       9.2    Non-Exclusivity of Rights...................................................................       7
       9.3    Statutory Severance.........................................................................       7

10.    DEATH OF PARTICIPANT...............................................................................       7

11.    NON-COMPETE; NO SOLICITATION; CONFIDENTIAL INFORMATION.............................................       7
       11.1   Non-Compete.................................................................................       7
       11.2   No Solicitation.............................................................................       7
       11.3   Confidential Information....................................................................       8

12.    UNFUNDED ARRANGEMENT...............................................................................       8
</TABLE>

                                        i

<PAGE>

                                                                   EXHIBIT 10.13

<TABLE>
<S>    <C>                                                                                                      <C>
13.    ADMINISTRATION OF THE PLAN.........................................................................       8
       13.1   Plan Administrator..........................................................................       8
       13.2   Resignation and Removal.....................................................................       8
       13.3   Records and Procedures......................................................................       8
       13.4   Self-Interest of Plan Administrator.........................................................       8
       13.5   Compensation and Bonding....................................................................       8
       13.6   Plan Administrator Powers and Duties........................................................       9
       13.7   Reliance on Documents, Instruments, etc.....................................................       9

14.    AMENDMENT AND TERMINATION..........................................................................       9

15.    CLAIMS REVIEW PROCEDURES; CLAIMS APPEALS PROCEDURES................................................       9
       15.1   Claims Review Procedures....................................................................       9
       15.2   Claims Appeals Procedures...................................................................      10

16.    EXTENSION OF PLAN TO EMPLOYERS.....................................................................      10

17.    MISCELLANEOUS......................................................................................      11
       17.1   Plan Not an Employment Contract.............................................................      11
       17.2   Alienation Prohibited.......................................................................      11
       17.3   Severability................................................................................      11
       17.4   Binding Effect..............................................................................      11
       17.5   Arbitration.................................................................................      11
       17.6   Governing Law...............................................................................      12

INTERNATIONAL SUPPLEMENT..................................................................................      13

EXHIBIT A, SCHEDULE OF BENEFITS...........................................................................      15

EXHIBIT B, SEVERANCE BENEFITS RELEASE AGREEMENT...........................................................      16
</TABLE>

                                       ii

<PAGE>

                                                                   EXHIBIT 10.13

                            BAKER HUGHES INCORPORATED
                            EXECUTIVE SEVERANCE PLAN

1.        ESTABLISHMENT, OBJECTIVE AND DURATION

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

         1.2      OBJECTIVE. The Plan is designed to attract and retain certain
designated employees of the Company (defined below) and to provide replacement
income in order to afford specified Employees (defined below) a time period to
actively seek and obtain gainful employment or become self employed if the
Employee's employment is terminated because of an Involuntary Termination
(defined below).

         1.3      DURATION. The Plan, as it may be amended by the Board (defined
below) from time to time, shall be effective as of November 1, 2002 and shall
remain in effect until the Board terminates the Plan.

2.       DEFINITIONS

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

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

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

                  "BAKER HUGHES" means Baker Hughes Incorporated, a Delaware
         corporation.

                  "BASE COMPENSATION" means a Participant's base salary or wages
         measured on an annual basis (as defined in section 3401(a) of the Code
         for purposes of federal income tax withholding) from the Company,
         modified by including any portion thereof that such Participant could
         have received in cash in lieu of (i) any deferrals made by the
         Participant pursuant to the Supplemental Retirement Plan or (ii)
         elective contributions made on his behalf by the Company pursuant to a
         qualified cash or deferred arrangement described in section 401(k) of
         the Code and any elective contributions under a cafeteria plan
         described in section 125, and modified further by excluding any bonus,
         incentive compensation, commissions, expense reimbursements or other
         expense allowances, fringe benefits (cash and noncash), moving
         expenses, deferred compensation (other than elective contributions to
         the Company's qualified cash or deferred arrangement described in
         section 401(k) of the Code), welfare benefits as defined in ERISA,
         overtime pay, special performance compensation amounts and severance
         compensation.

                  "BENEFITS" means the severance benefits a Participant is
         entitled to receive pursuant to Section 4 hereof. Other benefits as
         specified in Section 5 are not considered severance benefits for
         purposes of the Plan.

                  "BOARD" means the Board of Directors of Baker Hughes.

                  "BONUS" means each incentive bonus, if any, paid in cash by
         the Company to or for the benefit of an Employee for services rendered
         or labor performed while an Employee. Annual bonuses are generally paid
         with respect to a completed fiscal year by the Company to its employees
         pursuant to the Annual

                                        3

<PAGE>

                                                                   EXHIBIT 10.13

         Incentive Plan. An Employee's Bonus shall be determined by including
         any portion thereof that such Employee could have received in cash in
         lieu of (i) any participant deferrals made pursuant to the
         Supplemental Retirement Plan or (ii) elective contributions made on
         his behalf by the Company pursuant to a qualified cash or deferred
         arrangement (as defined in section 401(k) of the Code) or pursuant to
         a plan maintained under section 125 of the Code.

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

                  "COBRA" means the Consolidated Omnibus Budget Reconciliation
         Act of 1985, as amended, or any successor act.

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

                  "COMMITTEE" means the Administrative Committee or the
         Investment Committee that may be appointed by the Board as a Plan
         Administrator.

                  "COMPANY" means Baker Hughes or an Employer.

                  "COMPETITOR" means, as of any date, any Person (and any
         branch, office, or operation thereof) which engages in, or proposes to
         engage in (i) the supply of wellbore-related products, technology
         services and systems to the oil and gas industry and provides
         equipment, products and services for drilling, formation evaluation,
         completion and production of oil and gas wells, (ii) the manufacture,
         marketing and provision of services for separation and treatment
         solutions and continuous and batch centrifuges and specialty filters or
         (iii) any other business engaged in by the Company or any Affiliate
         prior to the Participant's Employment Termination Date which represents
         for any calendar year, or is projected by the Company to represent for
         any year during the first three-year period commencing on or after the
         Participant's Employment Termination Date, more than 5% of the gross
         revenue of the Company and which is located anywhere worldwide where
         the Company or any Affiliate is then engaged in, or as of the
         Participant's Employment Termination Date and to the Participant's
         knowledge proposes to engage in, any of such activities. The definition
         of "Competitor" excludes any business activity that the Company or any
         Affiliate disposes of to an entity in which the Company or any
         Affiliate retains any equity interest.

                  "CONFIDENTIAL INFORMATION" means any information, ideas,
         processes, methods, designs, devices, inventions, data, techniques,
         models and other information developed or used by the Company or any of
         its Affiliates and not generally known in the relevant trade or
         industry relating to the Company's or any Affiliate's products,
         services, businesses, operations, employees, customers or suppliers,
         whether in tangible or intangible form, which gives the Company or any
         of its Affiliates a competitive advantage, including, without
         limitation, (i) trade secrets; (ii) information relating to existing or
         contemplated products, services, technology, designs, processes,
         formulae, research or product developments; (iii) information relating
         to business plans or strategies, sales or marketing methods, methods of
         doing business, prices of sales or services, customer lists, customer
         usages and/or requirements, supplier information (including the prices
         of supplies); and (iv) any other confidential information which either
         the Company or any of its Affiliates may reasonably have the right to
         protect by patent, copyright or by keeping it secret and confidential.
         Confidential Information also includes any of the foregoing information
         of third parties which the Company is obligated to maintain as
         confidential. Confidential Information does not include (i)

                                        4

<PAGE>

                                                                   EXHIBIT 10.13

         information that is or becomes generally available to the public other
         than as a result of disclosure by the Participant or by any individual
         or entity to which the Participant delivered such information; (ii)
         information that becomes available to the Participant from a source
         that is not bound by a confidentiality agreement with the Company or
         an Affiliate; or (iii) information approved for release by written
         authorization of the Company.

                  "EMPLOYEE" means (i) an individual employed in the services of
         the Company on the active payroll and (ii) who is also a United
         States-based executive salary grade system employee (under the
         Company's then current payroll system categories), or any comparable
         executive designations in any system that replaces the United
         States-based salary grade system.

                  "EMPLOYER" means any Affiliate that adopts the Plan pursuant
         to the provisions of Section 16.

                  "EMPLOYMENT TERMINATION DATE" means the date on which the
         employment relationship between the Participant and the Company is
         terminated due to an Involuntary Termination.

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

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

                  "FICA" means the Federal Insurance Contributions Act, as
         amended, or any successor act.

                  "INVOLUNTARY TERMINATION" means the complete severance of an
         Employee's employment relationship with the Company (i) because the
         Employee's position is eliminated, (ii) because the Employee and the
         Company agree to the Employee's resignation of his position at the
         request of the Company, (iii) which occurs in conjunction with, and
         during the period that begins 90 days before and ends 180 days after,
         an acquisition, merger, spin-off, reorganization (either business or
         personnel), facility closing or a discontinuance of the operations of
         the divisions in which the Employee is employed or (iv) for any other
         reason which is deemed an Involuntary Termination by the Plan
         Administrator. An Involuntary Termination does not include (i) a
         termination for Cause, (ii) a transfer of employment among Employers or
         a transfer of employment to a venture or entity in which the Company or
         an Affiliate has any equity interest, (iii) a temporary absence, such
         as a Family and Medical Leave Act leave or a temporary layoff in which
         an Employee retains entitlement to re-employment, (iv) the Employee's
         death, disability or Retirement or (v) a voluntary termination by the
         Employee.

                  "PARTICIPANT" means an Employee who is eligible to participate
         in the Plan.

                  "PLAN" means the Baker Hughes Incorporated Executive Severance
         Plan, as amended from time to time.

                  "PLAN ADMINISTRATOR" means Baker Hughes, acting through its
         delegates. Such delegates shall include the Administrative Committee,
         the Investment Committee and any individual Plan Administrator
         appointed by the Board with respect to the employee benefit plans of
         Baker Hughes and its Affiliates, each of which shall have the duties
         and responsibilities assigned to it from time to time by the Board. As
         used in the Plan, the term "Plan Administrator" shall refer to the
         applicable delegate of Baker Hughes as determined pursuant to the
         actions of the Board.

                  "RELEASE AGREEMENT" means the agreement substantially in the
         form of Exhibit B hereto, which a Participant is required to execute
         and deliver in order to receive the Benefits, or any other form of
         release agreement adopted by the Plan Administrator in replacement of
         such agreement. The Plan Administrator may modify the Release Agreement
         or adopt more than one form of the Release Agreement to comply with or
         take into account the laws of different jurisdictions.

                  "RETIREMENT" means the Employee's voluntary termination of his
         employment after the Employee has attained at least 55 years of age and
         has at least ten (10) years of service with the Company.

                                       5

<PAGE>

                                                                   EXHIBIT 10.13

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

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

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

3.       ELIGIBILITY

         To be eligible to receive Benefits under the Plan, an individual must
(i) be an Employee on the Employment Termination Date, (ii) incur an Involuntary
Termination and (iii) execute and deliver to the Plan Administrator a Release
Agreement provided to the Participant by the Plan Administrator. An individual
who is classified by the Company as an independent contractor is not eligible to
participate in the Plan (even if he is subsequently reclassified by the Internal
Revenue Service or a court as a common law employee of the Company and the
Company acquiesces to the reclassification).

4.       BENEFITS

         The Company shall provide a Participant who has satisfied the
eligibility requirements of Section 3 the Benefits described below. No Benefits
will be deemed to have accrued prior to a Participant's Employment Termination
Date, and no rights to Benefits will be deemed to have vested until the
occurrence of an Involuntary Termination.

         Further details of the Benefits described in this Section 4 are
provided in Exhibit A. Subject to the provisions of Section 14, the Plan
Administrator may, from time to time, modify the Benefits to reflect changes in
the compensation grade system or for changes in the Benefits approved by the
Board.

                  (a)      BASE COMPENSATION. The Company will pay the
         Participant a cash severance benefit based on the Participant's Base
         Compensation at the Employment Termination Date, with the amount of the
         Base Compensation benefit determined in accordance with the relevant
         provisions of Exhibit A. Notwithstanding the measurement of Base
         Compensation on an annual basis, a Participant's Base Compensation for
         the month in which the Participant's Employment Termination Date occurs
         will be used in determining the Base Compensation benefit. A
         Participant's Base Compensation severance benefit will be paid in a
         single sum cash payment in accordance with the provisions of Section 6.

                  (b)      MEDICAL, DENTAL AND VISION INSURANCE. If a
         Participant and his spouse and dependents are participating in a group
         health plan sponsored by the Company on the Participant's Employment
         Termination Date, the Participant and his spouse and dependents have
         the right to continue medical, dental and vision coverage for the time
         periods provided by COBRA. Unless the Participant timely and properly
         elects the COBRA continuation coverage, medical, dental and vision
         coverage will automatically cease as of the Participant's Employment
         Termination Date. For the first three months of the Participant's COBRA
         continuation coverage, the Company will pay directly to the provider
         the cost of the COBRA continuation coverage, and thereafter the
         Participant will be responsible for the payment of the cost for the
         continued coverage.

                  (c)      OUTPLACEMENT. Each Participant shall be entitled to
         outplacement assistance at the expense of the Company determined in
         accordance with the relevant provisions of Exhibit A. No cash will be
         paid in lieu of outplacement fees and costs.

                                       6

<PAGE>

                                                                   EXHIBIT 10.13

5.       OTHER BENEFIT PROGRAMS; PERQUISITES; COMPANY PROPERTY; EXPENSE ACCOUNT

                  5.1      OTHER BENEFIT PROGRAMS.

                  (a)      BONUS. The Company will pay the Participant any Bonus
         to which the Participant is entitled under the provisions of the
         Annual Incentive Plan.

                  (b)      STOCK OPTIONS; OTHER AWARDS.

                           (1)      General. A Participant will not be entitled
                  to be granted any awards after his Employment Termination
                  Date. Awards for purposes of this clause include, but are not
                  limited to, incentive stock options, nonqualified stock
                  options, stock appreciation rights, restricted stock,
                  restricted stock units, performance shares, performance units,
                  cash-based awards and stock awards.

                           (2)      Stock Options. The vesting of stock options
                  (both incentive stock options and nonqualified stock options)
                  held by a Participant will be determined in accordance with
                  the provisions of the respective stock option award agreement
                  or plan under which the stock option was granted, as
                  applicable, and any of the Participant's stock options that
                  have vested prior to his Employment Termination Date may be
                  exercised as permitted under the provisions of such applicable
                  stock option award agreement or plan.

                           (3)      Other Awards. The vesting, lapsing of
                  restrictions or the payout of any other award, including stock
                  appreciation rights, restricted stock, restricted stock units,
                  performance shares, performance units, cash-based awards and
                  stock awards held by a Participant on his Employment
                  Termination Date will be determined in accordance with the
                  provisions of the respective award agreement or plan under
                  which the award was granted, as applicable.

                  (c)      PENSION, THRIFT AND SUPPLEMENTAL RETIREMENT PLANS.
         All of the Company's contributions to and accruals under the Baker
         Hughes Incorporated Pension Plan and all of the Company's and the
         Participant's contributions to the Baker Hughes Incorporated Thrift
         Plan and the Baker Hughes Incorporated Supplemental Retirement Plan
         will be discontinued as of his Employment Termination Date. Vesting
         will be determined in accordance with the provisions of the applicable
         plan, and all benefits, contributions or disbursements, if any, under
         these plans will be paid to the Participant in accordance with the
         provisions of the respective plan.

                  (d)      EMPLOYEE STOCK PURCHASE PLAN. The Participant's
         year-to-date payroll deductions will be reimbursed to the Participant
         in accordance with the provisions of the Baker Hughes Incorporated
         Employee Stock Purchase Plan.

                  (e)      POST-RETIREMENT HEALTH CARE OR LIFE INSURANCE. If the
         Participant would have been entitled to benefits under the Company's
         post-retirement health care or life insurance plans as of his
         Employment Termination Date, the Company shall provide such
         post-retirement health care or life insurance benefits to the
         Participant and the Participant's dependents in accordance with the
         terms of such plans (including any amendment and termination provisions
         of such plans) commencing on the later of (1) the date on which such
         coverage would have first become available and (2) the date on which
         the Benefits described in clause (b) of Section 4 terminate.

                  (f)      OTHER INSURANCE

                           (1)      Life. A Participant's coverage under the
                  Company's life insurance program will cease as of the
                  Employment Termination Date. A Participant may, at his option,
                  convert his basic life and perquisite life insurance coverage
                  to individual coverage after his Employment Termination Date
                  by completing the forms required by the Plan Administrator.

                                       7

<PAGE>

                                                                   EXHIBIT 10.13

                           (2)      Disability. A Participant's coverage under
                  the Company's short-term and long-term disability insurance
                  coverage will cease as of the Employment Termination Date.
                  Continued coverage under either the short-term and long-term
                  disability insurance is not available after the Employment
                  Termination Date.

                  5.2      PERQUISITES; COMPANY PROPERTY; EXPENSE ACCOUNT.

                  (a)      PERQUISITES. A Participant's perquisites shall
         terminate effective as of the Participant's Employment Termination
         Date. Perquisites include, but are not limited to, airline VIP club
         memberships; country club and/ or health club membership dues and
         expenses related to the use of the country club and/ or health club;
         supplemental life insurance; financial consulting; and office equipment
         for use in the home (e.g., cellular telephones, personal digital
         assistants, home computers and office accessories similar to the office
         accessories available to the Participant in his employment office and
         monthly Internet connection fees) and any other perquisites that may be
         provided by the Company from time to time. A Participant may, at his
         option, purchase any of his club memberships held in the Company's name
         at the fair market value and on the terms mutually agreed by the
         Participant and the Plan Administrator. The Plan Administrator will
         determine the fair market value of any such membership. The Plan
         Administrator reserves the right to deduct the payment for the club
         memberships from any Benefits to be paid in cash as provided in Section
         6.

                  (b)      COMPANY PROPERTY. No later than the Participant's
         Employment Termination Date (unless the Plan Administrator agrees
         otherwise in writing), the Participant shall return to the Company any
         company-owned property, including, but not limited to, credit cards,
         documents, files, computers, cellular telephones, personal digital
         assistants and any other company property of any kind or nature, in
         Participant's possession as of his Employment Termination Date.

                  (c)      EXPENSE ACCOUNT. Within thirty (30) days after the
         Participant's Employment Termination Date and in accordance with the
         Company's then current expense reimbursement policy, the Participant
         will prepare and submit a final expense account reimbursement request
         for expenses incurred prior to his Employment Termination Date. If, as
         a result of the final expense account reimbursement request, the
         Participant owes the Company, then the Company reserves the right to
         deduct any such amount from any Benefits to be paid in cash as provided
         in Section 6.

6.       TIME OF BENEFITS PAYMENTS

         The Company shall pay the Participant the cash Benefits described in
clause (a) of Section 4 and clause (a) of Section 5 in a single sum cash payment
within thirty (30) days after the Participant's Release Agreement becomes
irrevocable. If the Company subsequently determines that additional monies are
due and payable to the Participant as Benefits described in clause (a) of
Section 4 or clause (a) of Section 5, the Company will pay any such unpaid
Benefits to the Participant, together with interest on the unpaid Benefits from
the date the single sum cash payment was made at the annual rate of 120% of the
rate provided in section 1274(b)(2)(B) of the Code within ten (10) business days
of discovering that the additional monies are due and payable. If the Benefits
paid to the Participant are subsequently determined to exceed the amount of
Benefits the Participant should have received, such excess shall constitute a
loan by the Company to the Participant, payable within ten (10) business days
after demand by the Company, together with interest from the date the single sum
cash payment was made at the annual rate of 120% of the rate provided in section
1274(b)(2)(B) of the Code, but only to the extent such amount has not been
previously paid by the Participant.

7.       WITHHOLDING

         The Company may withhold from any Benefits paid under the Plan all
federal and state income, FICA and other employment taxes, and any other amounts
required or permitted to be withheld under any agreement with the Participant,
applicable law or other employee benefit plans of the Company.

                                       8

<PAGE>

                                                                   EXHIBIT 10.13

8.       RIGHT OF OFFSET

         By accepting Benefits under the Plan, a Participant agrees that the
Company, in its sole discretion, may deduct from any Benefits payable in cash to
the Participant under the Plan any amounts owed to the Company by the
Participant.

9.       REDUCTION FOR OTHER SEVERANCE BENEFITS; NON-EXCLUSIVITY OF RIGHTS;
         STATUTORY SEVERANCE

         9.1      REDUCTION FOR OTHER SEVERANCE BENEFITS. The amount of the
Benefits to which a Participant is otherwise entitled under the Plan shall be
reduced by the amount, if any, of any other severance payments payable to the
Participant by the Company under any other plan, program or individual
contractual arrangement.

         9.2      NON-EXCLUSIVITY OF RIGHTS. Nothing in the Plan shall prevent
or limit the Participant's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company for which the
Participant may qualify, nor shall anything herein limit or reduce such rights
as the Participant may have under any agreements with the Company or any of its
subsidiaries, except as otherwise provided in Section 9.1. Amounts which are
vested benefits or which the Participant is otherwise entitled to receive under
any plan or program of the Company or any of its Affiliates shall be payable in
accordance with such plan or program.

         9.3      STATUTORY SEVERANCE. If any benefits obligations are required
to be paid to a Participant in conjunction with severance of employment under
the laws of the country where the Participant is employed or under federal,
state or local law, the Benefits paid to the Participant will be deemed to be in
satisfaction of any statutorily required benefit obligations.

10.      DEATH OF PARTICIPANT

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

11.      NON-COMPETE; NO SOLICITATION; CONFIDENTIAL INFORMATION

         In consideration for the payment of the Benefits to the Participant,
the Participant shall not engage in any of the activities described in this
Section 11.

         11.1     NON-COMPETE. During the period commencing with the
Participant's Employment Termination Date and ending on the second anniversary
of such date, the Participant shall not, without the written consent of the
Company, at any time, directly or indirectly, become employed by, serve as a
director of, or render advisory or consulting or other services in connection
with any Competitor or in any capacity engage or participate in any activity as
a Competitor.

         11.2     NO SOLICITATION. During the period commencing with the
Participant's Employment Termination Date and ending on the second anniversary
of such date, the Participant 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 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

                                       9

<PAGE>

                                                                   EXHIBIT 10.13

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

         11.3     CONFIDENTIAL INFORMATION. During the course of the
Participant's employment with the Company, the Participant may have had access
to or received Confidential Information. Each Participant is obligated to keep
confidential all such Confidential Information, except that any Participant may
disclose the Confidential Information (i) in connection with enforcing his
rights under the Plan or if compelled by law, and in either case, the
Participant shall provide written notice to the Company prior to the disclosure
or (ii) if the Company provides written consent prior to the disclosure.

12.      UNFUNDED ARRANGEMENT

         The Plan is only a general corporate commitment of the Company, and
each Participant must rely upon the general credit of the Company for the
fulfillment of its obligations hereunder. Under all circumstances, the rights of
Participants to any asset held by the Company will be no greater than the rights
expressed in the Plan. Nothing contained in the Plan shall constitute a
guarantee by the Company that the assets of the Company will be sufficient to
pay any Benefit under the Plan or would place the Participant in a secured
position ahead of general creditors of the Company. The Participants are only
unsecured creditors of the Company with respect to their Benefits, and the Plan
constitutes a mere promise by the Company to make Benefit payments in the
future. No specific assets of the Company have been or shall be set aside, or
shall in any way be transferred to a trust or shall be pledged in any way for
the performance of the Company's obligations under the Plan which would remove
such assets from being subject to the general creditors of the Company.

13.      ADMINISTRATION OF THE PLAN

         13.1     PLAN ADMINISTRATOR. Baker Hughes shall be the "Plan
Administrator" and the "named fiduciary" for purposes of ERISA and shall be
subject to service of process on behalf of the Plan.

         13.2     RESIGNATION AND REMOVAL. The members of a Committee shall
serve at the pleasure of the Board; they may be officers, directors, or
employees of the Company or any other individuals. At any time during his term
of office, any member of a Committee or any individual serving as Plan
Administrator may resign by giving written notice to the Board, such resignation
to become effective upon the appointment of a substitute or, if earlier, the
lapse of thirty days after such notice is given as herein provided. At any time
during its term of office, and for any reason, any member of a Committee or any
individual serving as Plan Administrator may be removed by the Board.

         13.3     RECORDS AND PROCEDURES. The Plan Administrator shall keep
appropriate records of its proceedings and the administration of the Plan and
shall make available for examination during business hours to any Participant,
former Participant or the beneficiary of any Participant or former Participant
such records as pertain to that individual's interest in the Plan. If a
Committee is performing duties as the Plan Administrator, the Committee shall
designate the individual or individuals who shall be authorized to sign for the
Plan Administrator and, upon such designation, the signature of such individual
or individuals shall bind the Plan Administrator.

         13.4     SELF-INTEREST OF PLAN ADMINISTRATOR. Neither the members of a
Committee nor any individual Plan Administrator shall have any right to vote or
decide upon any matter relating solely to himself under the Plan or to vote in
any case in which his individual right to claim any benefit under the Plan is
particularly involved. In any case in which the any Committee member or
individual Plan Administrator is so disqualified to act, the other members of
the Committee shall decide the matter in which the Committee member or
individual Plan Administrator is disqualified.

         13.5     COMPENSATION AND BONDING. Neither the members of a Committee
nor any individual Plan Administrator shall receive compensation with respect to
their services on the Committee or as Plan Administrator. To the extent required
by applicable law, or required by the Company, neither the members of a
Committee nor any individual Plan Administrator shall furnish bond or security
for the performance of their duties hereunder.

                                       10

<PAGE>

                                                                   EXHIBIT 10.13

         13.6     PLAN ADMINISTRATOR POWERS AND DUTIES. The Plan Administrator
shall supervise the administration and enforcement of the Plan according to the
terms and provisions hereof and shall have all powers necessary to accomplish
these purposes, including, but not by way of limitation, the right, power, and
authority:

                  (a)      to make rules, regulations, and bylaws for the
         administration of the Plan that are not inconsistent with the terms and
         provisions hereof, and to enforce the terms of the Plan and the rules
         and regulations promulgated thereunder by the Plan Administrator;

                  (b)      to construe in its discretion all terms, provisions,
         conditions, and limitations of the Plan;

                  (c)      to correct any defect or to supply any omission or to
         reconcile any inconsistency that may appear in the Plan in such manner
         and to such extent as it shall deem in its discretion expedient to
         effectuate the purposes of the Plan;

                  (d)      to employ and compensate such accountants, attorneys,
         investment advisors, and other agents, employees, and independent
         contractors as the Plan Administrator may deem necessary or advisable
         for the proper and efficient administration of the Plan;

                  (e)      to determine in its discretion all questions relating
         to eligibility;

                  (f)      to determine whether and when a Participant has
         incurred a Termination of Employment, and the reason for such
         termination; and

                  (g)      to make a determination in its discretion as to the
         right of any individual to a Benefit under the Plan and to prescribe
         procedures to be followed by Participants, former Participants or
         beneficiaries in obtaining Benefits hereunder.

         13.7     RELIANCE ON DOCUMENTS, INSTRUMENTS, ETC. The Plan
Administrator may rely on any certificate statement or other representation made
on behalf of the Company, any Employee or any Participant, which the Plan
Administrator in good faith believes to be genuine, and on any certificate,
statement, report or other representation made to it by any agent or any
attorney, accountant or other expert retained by it or the Company in connection
with the operation and administration of the Plan.

14.      AMENDMENT AND TERMINATION

         The Board shall have the right to amend or terminate the Plan, in whole
or in part, for any reason; provided, however, no amendment or termination of
the Plan after a Participant's Employment Termination Date shall affect the
Benefits payable to the Participant.

15.      CLAIMS REVIEW PROCEDURES; CLAIMS APPEALS PROCEDURES

         15.1     CLAIMS REVIEW PROCEDURES. When a Benefit is due, the
Participant (or the person entitled to Benefits under Section 10) should submit
a claim to the office designated by the Plan Administrator to receive claims.
Under normal circumstances, the Plan Administrator will make a final decision as
to a claim within sixty (60) days after receipt of the claim. If the Plan
Administrator notifies the claimant in writing during the initial 60-day period,
it may extend the period up to 120 days after the initial receipt of the claim.
The written notice must contain the circumstances necessitating the extension
and the anticipated date for the final decision. If a claim is denied during the
claims period, the Plan Administrator must notify the claimant in writing, and
the written notice must set forth in a manner calculated to be understood by the
claimant:

                  (a)      the specific reason or reasons for the denial;

                  (b)      specific reference to the Plan provisions on which
         the denial is based;

                                       11

<PAGE>

                                                                   EXHIBIT 10.13

                  (c)      a description of any additional material or
         information necessary for the claimant to perfect the claim and an
         explanation of why such material or information is necessary; and

                  (d)      an explanation of the Plan claims review procedures
         and time limits, including a statement of the claimant's right to bring
         a civil action under section 502(a) of ERISA.

         If a decision is not given to the Participant within the claims review
period, the claim is treated as if it were denied on the last day of the claims
review period.

         15.2     CLAIMS APPEALS PROCEDURES. For purposes of this section the
Participant or the person entitled to Benefits under Section 10 are referred to
as the "claimant"). If the claim of the claimant made pursuant to Section 15.1
is denied and he wants a review, he must apply to the Plan Administrator in
writing. That application can include any arguments, written comments,
documents, records, and other information relating to the claim for benefits. In
addition, the claimant is entitled to receive on request and free of charge
reasonable access to and copies of all information relevant to the claim. For
this purpose, "relevant" means information that was relied on in making the
benefit determination or that was submitted, considered or generated in the
course of making the determination, without regard to whether it was relied on,
and information that demonstrates compliance with the Plan's administrative
procedures and safeguards for assuring and verifying that Plan provisions are
applied consistently in making benefit determinations. The Plan Administrator
must take into account all comments, documents, records, and other information
submitted by the claimant relating to the claim, without regard to whether the
information was submitted or considered in the initial benefit determination.
The claimant may either represent himself or appoint a representative, either of
whom has the right to inspect all documents pertaining to the claim and its
denial. The Plan Administrator can schedule any meeting with the claimant or his
representative that it finds necessary or appropriate to complete its review.

         The request for review must be filed within 90 days after the denial.
If it is not, the denial becomes final. If a timely request is made, the Plan
Administrator must make its decision, under normal circumstances, within 60 days
of the receipt of the request for review. However, if the Plan Administrator
notifies the claimant prior to the expiration of the initial review period, it
may extend the period of review up to 120 days following the initial receipt of
the request for a review. All decisions of the Plan Administrator must be in
writing and must include the specific reasons for its action, the Plan
provisions on which its decision is based, and a statement that the claimant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the
claimant's claim for benefits, and a statement of the claimant's right to bring
an action under section 502(a) of ERISA If a decision is not given to the
claimant within the review period, the claim is treated as if it were denied on
the last day of the review period.

16.      EXTENSION OF PLAN TO EMPLOYERS

                  (a)      With the written approval of the Plan Administrator,
         any entity that is an Affiliate may adopt the Plan by appropriate
         action of its board of directors or noncorporate counterpart, as
         evidenced by a written instrument executed by an authorized officer of
         such entity or an executed adoption agreement (approved by the board of
         directors or noncorporate counterpart of the Affiliate), agreeing to be
         bound by all the terms, conditions and limitations of the Plan except
         those, if any, specifically described in the adoption instrument, and
         providing all information required by the Plan Administrator. The Plan
         Administrator and the adopting Affiliate may agree to incorporate
         specific provisions relating to the operation of the Plan that apply to
         the adopting Affiliate only and shall become, as to such adopting
         Affiliate and its employees, a part of the Plan.

                  (b)      The provisions of the Plan may be modified so as to
         increase the obligations of an adopting Affiliate only with the consent
         of such Affiliate, which consent shall be conclusively presumed to have
         been given by such Affiliate unless the Affiliate gives the Company
         written notice of its rejection of the amendment within 30 days after
         the adoption of the amendment.

                  (c)      The provisions of the Plan shall apply separately and
         equally to each adopting Affiliate and its employees in the same manner
         as is expressly provided for the Company and its employees, except

                                       12

<PAGE>

                                                                   EXHIBIT 10.13

         that the power to appoint or otherwise affect the Plan Administrator
         and the power to amend or terminate the Plan shall be exercised by
         Baker Hughes. The Plan Administrator shall act as the agent for each
         Affiliate that adopts the Plan for all purposes of administration
         thereof.

                  (d)      Any adopting Affiliate may, by appropriate action of
         its board of directors or noncorporate counterpart, terminate its
         participation in the Plan. Moreover, the Plan Administrator may, in its
         discretion, terminate an Affiliate's participation in the Plan at any
         time.

                  (e)      The Plan will terminate with respect to any Affiliate
         that has adopted the Plan pursuant to this Section if the Affiliate
         ceases to be an Affiliate or revokes its adoption of the Plan by
         resolution of its board of directors or noncorporate counterpart
         evidenced by a written instrument executed by an authorized officer of
         the Affiliate. If the Plan terminates with respect to any Affiliate,
         the employees of that Affiliate will no longer be eligible to be
         Participants in the Plan.

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

                  (g)      The document which evidences the adoption of the Plan
         by an Affiliate shall become a part of the Plan. However, neither the
         adoption of the Plan by an Affiliate nor any act performed by it in
         relation to the Plan shall ever create a joint venture or partnership
         relation between it and any other Affiliate.

17.      MISCELLANEOUS

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

         17.2     ALIENATION PROHIBITED. No Benefits hereunder shall be subject
to anticipation or assignment by a Participant, to attachment by, interference
with, or control of any creditor of a Participant, or to being taken or reached
by any legal or equitable process in satisfaction of any debt or liability of a
Participant prior to its actual receipt by the Participant. Any attempted
conveyance, transfer, assignment, mortgage, pledge, or encumbrance of the
Benefits hereunder prior to payment thereof shall be void.

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

         17.4     BINDING EFFECT. This Agreement shall be binding upon any
successor of the Company.

         17.5     ARBITRATION. Any controversy arising out of or relating to the
Plan, including without limitation, any and all disputes, claims (whether in
tort, contract, statutory or otherwise) or disagreements concerning the
interpretation or application of the provisions of the Plan, Company's
employment of Participant and the termination of that employment, shall be
resolved by arbitration in accordance with the Employee Benefit Plan Claims
Arbitration Rules of the American Arbitration Association (the "AAA") then in
effect. No arbitration proceeding relating to the Plan may be initiated by
either the Company or the Participant unless the claims review and appeals
procedures specified in Section 15 have been exhausted. Within ten (10) business
days of the initiation of an arbitration hereunder, the Company and the
Participant will each separately designate an arbitrator, and within twenty (20)
business days of selection, the appointed arbitrators will appoint a neutral
arbitrator from the AAA National Panel of Employee Benefit Plan Claims
Arbitrators. The arbitrators shall issue their written decision (including a
statement of finding of facts) within thirty (30) days from the date of the
close of the arbitration hearing. The decision of the arbitrators selected
hereunder will be final and binding on both parties. This arbitration provision
is expressly made pursuant to and shall be governed by the Federal Arbitration
Act, 9 U.S.C. Sections 1-

                                       13

<PAGE>

                                                                   EXHIBIT 10.13

16 (or replacement or successor statute). Pursuant to Section 9 of the Federal
Arbitration Act, the Company and any Participant agrees that any judgment of the
United States District Court for the District in which the headquarters of Baker
Hughes is located at the time of initiation of an arbitration hereunder shall be
entered upon the award made pursuant to the arbitration. Nothing in this Section
17.5 shall be construed to, in any way, limit the scope and effect of Section
13. In any arbitration proceeding full effect shall be given to the rights,
powers, and authorities of the Plan Administrator under Section 13.

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

                                       14

<PAGE>

                                                                   EXHIBIT 10.13

                            INTERNATIONAL SUPPLEMENT

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

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

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

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

              "NON-US EMPLOYEE" means an individual (i) employed by the Company
              in an executive salary grade system (under the Company's then
              current payroll system categories) with its operations or
              principal place of business located outside of the United States
              and (ii) specified by the Plan Administrator as eligible to
              participate in the Plan.

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

3.       ELIGIBILITY. Section 3 of the Plan is modified in the first sentence to
         read as follows:

              "To be eligible to receive Benefits under the Plan, an individual
              must (i) be a Non-US Employee, (ii) be a Non-US Employee on his
              Employment Termination Date, (iii) incur an Involuntary
              Termination and (iv) execute and deliver to the Company a Release
              Agreement provided to the Non-US Participant by the Company;
              provided, however, if such Release Agreement is a violation of the
              laws of the jurisdiction applicable to the Non-US Participant,
              then, at the discretion of the Company, the Release Agreement may
              be modified to comply with the laws of the jurisdiction."

4.       BENEFITS. Section 4 of the Plan is modified in the first paragraph to
         read as follows:

              "The Company shall provide a Non-US Participant who has satisfied
              the eligibility requirements of Section 3 such severance benefits
              under the Plan as the Plan Administrator determines in accordance
              with the provisions of Exhibit A, taking into consideration any
              prohibitions or restrictions and any statutorily mandated
              severance benefits applicable to the Non-US Participant, with the
              intent of providing the Non-US Participant Benefits that are
              generally comparable to the Benefits provided to Participants
              under the Plan. It is the express intent of the Company that any
              Benefits paid to a Non-US Participant under this Supplement and
              the Plan will be in lieu of any statutorily-mandated severance
              benefits (or other employment termination related benefits),
              including, but not limited to, gratuity and similar benefits. No
              Benefits will be deemed to have accrued prior to a Non-US
              Participant's Employment Termination Date, and no rights to
              Benefits will be deemed to have vested until the occurrence of an
              Involuntary Termination."

5.       TIME OF BENEFITS PAYMENTS. Section 6.1 of the Plan is modified to read
         as follows:

              "Any cash Benefits payable to the Non-US Participant will be paid
              by the Company in a single sum cash payment, payable within thirty
              (30) calendar days after the Non-US Participant's Release
              Agreement becomes irrevocable (or, if there is no Release
              Agreement, within thirty (30) calendar days after the Non-US
              Participant's Employment Termination Date). If the Company
              subsequently determines that additional monies are due and payable
              to the Non-US Participant as cash Benefits, the Company will pay
              any such unpaid Benefits to the Non-US Participant, together with
              interest on the unpaid Benefits from the date the single sum cash
              payment was made at the annual rate of 120% of the rate provided
              in section 1274(b)(2)(B) of the Code within ten (10) business days
              of discovering that the

                                       15

<PAGE>

                                                                   EXHIBIT 10.13

              additional monies are due and payable. If the Benefits paid to the
              Non-US Participant are subsequently determined to exceed the
              amount of Benefits the Non-US Participant should have received,
              such excess shall constitute a loan by the Company to the Non-US
              Participant, payable within ten (10) business days after demand by
              the Company, together with interest from the date the single sum
              cash payment was made at the annual rate of 120% of the rate
              provided in section 1274(b)(2)(B) of the Code, but only to the
              extent such amount has not been previously paid by the Non-US
              Participant."

6.       WITHHOLDING.  Section 7 of the Plan is modified to read as follows:

              "The Company shall withhold from any Benefits paid under the Plan
              and this Supplement any amounts required or permitted to be
              withheld under any agreement with the Non-US Participant,
              applicable law or other employee benefit plans of the Company."

                                       16

<PAGE>

EXHIBIT A                                                          EXHIBIT 10.13

                            BAKER HUGHES INCORPORATED
                            EXECUTIVE SEVERANCE PLAN

                              SCHEDULE OF BENEFITS

<TABLE>
<CAPTION>
               SEVERANCE BENEFITS                                         DETAILS OF BENEFIT
               ------------------                                         ------------------
<S>     <C>                                                  <C>
1.      BASE COMPENSATION
              Level 1                                        18 months of Base Compensation*
              Level 2                                        12 months of Base Compensation*
              Level 3                                         9 months of Base Compensation*

                                                             *Using the Participant's Base Compensation for the month
                                                             in which the Participant's Employment Termination Date
                                                             occurs.

2.      INSURANCE - MEDICAL, DENTAL AND VISION               3 months of COBRA continued coverage paid by the
                                                             Company, provided the Participant timely and properly
                                                             elects COBRA continuation coverage.

3.      OUTPLACEMENT                                         Outplacement services will be provided for the greater
                                                             of 12 months or until such time as the value of the
                                                             outplacement services reaches the maximum of $10,000.
                                                             The 12-month period commences with the first day of the
                                                             month following the month in which the Participant's
                                                             Employment Termination Date occurs.
</TABLE>

                                       17

<PAGE>

EXHIBIT B                                                          EXHIBIT 10.13

                            BAKER HUGHES INCORPORATED
                            EXECUTIVE SEVERANCE PLAN

                      SEVERANCE BENEFITS RELEASE AGREEMENT

         THIS SEVERANCE BENEFITS RELEASE AGREEMENT is entered into by and
between ________________________ (the "PARTICIPANT") and [Name of entity, a
______________ corporation (the "COMPANY")].

1.       GENERAL. This Release Agreement is executed with respect to severance
         Benefits provided pursuant to the Baker Hughes Incorporated Executive
         Severance Plan (the "PLAN"). All of Participant's Benefits will be
         determined in accordance with the Plan as in effect on the
         Participant's Employment Termination Date, including any replacement
         severance plan or policy then in effect.

         Capitalized terms that are not defined herein shall have the meaning
         ascribed to such terms in the Plan.

2.       TERMINATION OF EMPLOYMENT. The Participant represents, understands and
         agrees that his active employment with the Company terminated on
         _____________, 20____ (the Employment Termination Date.

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

3.       SCHEDULE OF BENEFITS. The Company will provide the Participant with the
         Benefits described on Schedule 1 attached.

4.       PAYMENT OF BENEFITS. Payments of any Benefits in cash will be made at
         such time and in such amounts as provided in the Plan.

5.       OFFSET OF AMOUNTS DUE. The Participant agrees and consents that the
         Plan Administrator, in its sole discretion, may deduct from any
         Benefits payable in cash to the Participant under the Plan any amounts
         owed to the Company by the Participant.

6.       RETURN OF COMPANY PROPERTY. No later than the Participant's Employment
         Termination Date (unless the Company agrees otherwise in writing), the
         Participant shall return to the Company any company-owned property,
         including, but not limited to, credit cards, documents, files,
         computers and any other company property of any kind or nature, in the
         Participant's possession as of his Employment Termination Date.

7.       NON-COMPETE; NO SOLICITATION; CONFIDENTIAL INFORMATION. In
         consideration for the payment of the Benefits to the Participant, the
         Participant shall not engage in any of the activities described in this
         Section 7.

         7.1      NON-COMPETE. During the period commencing with the
         Participant's Employment Termination Date and ending on the second
         anniversary of such date, the Participant shall not, without the
         written consent of the Company, at any time, directly or indirectly,
         become employed by, serve as a director of, or render advisory or
         consulting or other services in connection with any Competitor or in
         any capacity engage or participate in any activity as a Competitor.

         7.2      NO SOLICITATION. During the period commencing with the
         Participant's Employment Termination Date and ending on the second
         anniversary of such date, the Participant shall not, directly or
         indirectly,

                                       18

<PAGE>

EXHIBIT B                                                          EXHIBIT 10.13

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

         7.3      CONFIDENTIAL INFORMATION. During the course of the
         Participant's employment with the Company, the Participant may have had
         access to or received Confidential Information. Each Participant is
         obligated to keep confidential all such Confidential Information,
         except that any Participant may disclose the Confidential Information
         (i) in connection with enforcing his rights under the Plan or if
         compelled by law, and in either case, the Participant shall provide
         written notice to the Company prior to the disclosure or (ii) if the
         Company provides written consent prior to the disclosure.

8.       NO KNOWLEDGE OF LEGAL VIOLATIONS. Except to the extent previously
         disclosed to the Company's chief compliance officer, if applicable, the
         Participant represents that he has no information or knowledge of any
         legal irregularity, violation, or alleged violation of any law,
         regulation, statute, or ordinance of any kind resulting from the
         operations of the Company or any other entity affiliated with the
         Company.

9.       SETTLEMENT. Payment of the Benefits is contingent upon the
         Participant's executing and returning this Release Agreement to the
         Company. The Participant may take up to _________________ (___) days to
         consider this Release Agreement prior to executing it. Furthermore, the
         Participant has a seven- (7) day period after executing this Release
         Agreement during which time the Participant may revoke his consent to
         the Agreement, and this Release Agreement will not become effective or
         enforceable until such revocation period has expired.

         The Participant represents and acknowledges that, in executing this
         Release Agreement, he 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 (as defined below) or by any of the
         Releasees' agents, representatives or attorneys with regard to the
         subject matter, basis or effect of this Release Agreement or otherwise.

         The Participant represents and agrees that he fully understands his
         right to discuss all aspects of this Release Agreement with his private
         attorney, that he has carefully read and fully understands all of the
         provisions of this Release Agreement and that he is voluntarily
         entering into this Release Agreement.

10.      RELEASE. This Release Agreement shall not in any way be construed as an
         admission by the Company or any other entity affiliated with the
         Company that it has acted wrongfully with respect to the Participant or
         any other Person, or that the Participant has any rights whatsoever
         against the Company or any other entity affiliated with the Company,
         and the Company specifically disclaims any liability for wrongful acts
         against the Participant and any other Person, on the part of itself and
         any other entity affiliated with the Company and the employees and
         agents thereof.

         As a material inducement for the Company to enter into this Release
         Agreement and except as otherwise provided in this Release Agreement,
         the Participant hereby irrevocably and unconditionally releases,
         acquits and forever discharges the Company and the Company and its
         directors, officers, shareholders, partners, representatives, agents,
         employees, predecessors, successors, affiliates, divisions,
         subsidiaries and related entities and their respective directors,
         officers, shareholders, agents, representatives and employees,
         (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

                                       19

<PAGE>

EXHIBIT B                                                          EXHIBIT 10.13

         known or unknown, suspected or unsuspected, including, but not limited
         to, all claims arising out of, based upon, or relating to my employment
         with the Company, or compensation for that employment.

         Without limiting the generality of the foregoing, the Participant
         understands and agrees that the release in this Section 10 includes,
         but is not limited to, claims based on or relating to: (a) any express
         or implied employment contract; (b) wrongful discharge; (c) termination
         in breach of public policy; (d) age discrimination under the Age
         Discrimination in Employment Act of 1967, as amended ("ADEA"); (e)
         claims of discrimination, harassment or retaliation under title VII of
         the Civil Rights Act of 1964, as amended, or the Americans with
         Disabilities Act, both of which prohibit discrimination based on race,
         color, age, ancestry, national origin, sex, sexual orientation,
         religion, mental or physical disabilities, or marital status; (f) any
         other federal, state or local laws or regulations prohibiting
         employment discrimination; (g) personal injury, defamation, assault,
         battery, invasion of privacy, fraud, intentional or negligent
         misrepresentation of fact, intentional or negligent infliction of
         emotional distress, or false imprisonment; (h) claims for additional
         wages, compensation, overtime pay, severance pay, bonuses or welfare
         benefits, or any other entitlements or benefits as an employee of the
         Company; (i) any legal restrictions on the Company's right to terminate
         employees; (j) any express or implied covenant of good faith and fair
         dealing; and (k) claims for attorneys' fees or costs.

         In addition, the Participant 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 FOREGOING RELEASE EXPRESSLY EXCLUDES ANY CLAIMS AND RIGHTS THAT MAY
         ARISE AFTER THE DATE OF EXECUTION OF THIS RELEASE AGREEMENT AND ANY
         CLAIMS OR RIGHTS THAT THE PARTICIPANT MAY HAVE UNDER ANY DIRECTOR AND
         OFFICER INDEMNIFICATION PROGRAM OR POLICY OR ANY DIRECTOR AND OFFICER
         INSURANCE PROVIDED BY THE COMPANY AND ANY CLAIMS OR RIGHTS THAT THE
         PARTICIPANT MAY HAVE UNDER THE PLAN OR ANY OTHER EMPLOYEE BENEFIT PLAN.

7.       REVOCATION PERIOD. The foregoing waiver and release of claims under the
         ADEA may be revoked by the Participant within the seven- (7) day period
         commencing with the day after the date of the full execution of this
         Release Agreement, and the release of any claims under the ADEA will
         not become effective until the seven-day revocation period has expired.
         To exercise this right of revocation, the Participant must notify the
         Plan Administrator in writing before the expiration of the seven-day
         revocation period.

8.       MISCELLANEOUS.

         8.1      Administration. This Release Agreement will be administered by
         the Plan Administrator, or its delegates.

         8.2      Binding Arbitration. The Participant agrees to submit to final
         and binding arbitration in accordance with the provisions of Section
         17.5 of the Plan any controversy relating to the Plan or this Release
         Agreement, including without limitation, any and all disputes, claims
         (whether in tort, contract, statutory or otherwise) or disagreements
         concerning the interpretation or application of the provisions of the
         Plan or this Release Agreement, the Company's employment of Participant
         and the termination of that employment. No arbitration proceeding
         relating to the Plan or this Release Agreement may be initiated by the
         Participant unless the Participant has exhausted the claims review and
         appeals procedures specified in Section 15 of the Plan.

         8.3      Entire Agreement. This Release 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.

         8.4      Governing Law. This Release Agreement shall be construed and
         interpreted in accordance with the laws of the State of Texas, except
         to the extent that the conflicts of laws provisions of the State of
         Texas

                                       20

<PAGE>

EXHIBIT B                                                          EXHIBIT 10.13

         would require the application of the relevant law of another
         jurisdiction, in which event the relevant law of the State of Texas
         will nonetheless apply, with venue for litigation being in the city in
         which the headquarters of Baker Hughes is located at the time the
         litigation is instituted.

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

         THIS RELEASE AGREEMENT INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS.
THE PARTICIPANT MAY TAKE UP TO ________________ (____) DAYS FROM RECEIPT OF THIS
RELEASE AGREEMENT TO CONSIDER ITS TERMS BEFORE SIGNING IT. THE PARTICIPANT IS
ENCOURAGED TO CONSULT AN ATTORNEY BEFORE EXECUTING THIS RELEASE AGREEMENT IF
THAT IS HIS DESIRE.

         EXECUTED by and between the Participant and the Company on the dates
indicated below each signature and is effective upon execution by both the
Participant and the Company.

[PARTICIPANT]                                   [COMPANY]

By: ___________________________             By: ___________________________
Name: _________________________             Name: _________________________
                                            Title: ________________________
Date: _________________________             Date: _________________________

                                       21

<PAGE>

EXHIBIT B                                                          EXHIBIT 10.13

                                   SCHEDULE 1

                               SEVERANCE BENEFITS
                                RELEASE AGREEMENT
                             PARTICIPANT'S BENEFITS

<TABLE>
<CAPTION>
          SEVERANCE BENEFITS                                                      DETAILS OF BENEFIT
          ------------------                                                      ------------------
<S>                                                           <C>
1.       Base compensation                                    [X] months of base compensation, for an aggregate amount of
                                                              $____________________.

2.       Insurance - medical, dental and vision               3 months of COBRA continued coverage paid by the Company, provided
                                                              Participant timely and properly elects COBRA continuation coverage.

3.       Outplacement                                         Outplacement services will be provided for the greater of 12 months or
                                                              until such time as the value of the outplacement services reaches the
                                                              maximum of $10,000.  The 12-month period commences with the first day
                                                              of the month following the month in which the Participant's Employment
                                                              Termination Date occurs.

            OTHER BENEFITS                                                        DETAILS OF BENEFIT
            --------------                                                        ------------------

1.       Insurance - life                                     Participant may, at his option, continue his basic (but not his
                                                              perquisite) life insurance coverage by completing the forms required
                                                              by the Plan Administrator.

2.       Insurance - disability                               Both short-term and long-term disability insurance coverage cease at
                                                              the Participant's Employment Termination Date.

3.       Perquisites                                          All perquisites terminate as of the Participant's Employment
                                                              Termination Date.

4.       Company property                                     All company property in the possession of Participant shall be
                                                              returned to the Company no later than the Participant's Employment
                                                              Termination Date.

5.       Expense account                                      Participant's final expense account to be submitted within 30 days of
                                                              Participant's Employment Termination Date.
</TABLE>

                                       22

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