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                                                                   EXHIBIT 10.10

                              AMENDED AND RESTATED
                            BAKER HUGHES INCORPORATED
                         1991 EMPLOYEE STOCK BONUS PLAN

1. Purpose of the Plan. The Baker Hughes Incorporated 1991 Employee Stock Bonus
Plan (the "Plan") is intended to promote the interests of Baker Hughes
Incorporated (the "Company"), its subsidiaries and affiliated entities and its
stockholders by encouraging certain key employees of the Company, its
subsidiaries and affiliated entities to increase their equity interests in the
Company, thereby giving them an added incentive to work toward the continued
growth and success of the Company. The Plan provides an incentive to such
employees who have been granted options under the Baker Hughes Incorporated
Restated 1987 Stock Option Plan (the "Stock Option Plan") and/or who have been
offered debentures under the Baker Hughes Incorporated 1987 Convertible
Debenture Plan (the "Convertible Debenture Plan") to encourage such employees to
remain in the employ of the Company and to retain the shares acquired by the
exercise of such options ("Option Shares") and/or by the exercise of the
conversion privilege of such debentures ("Conversion Shares") for a minimum of
three years from the issuance of such Option Shares and/or Conversion Shares,
respectively. Accordingly, the Company may issue to such employees shares of
common stock of the Company, $1 par value ("Stock"), subject to certain
restrictions in accordance with the terms and conditions herein established
("Stock Awards").

2. Administration of the Plan. The Plan shall be administered by the
Compensation Committee ("Committee") of the Board of Directors of the Company.
Subject to the provisions of the Plan, the Committee shall interpret the Plan,
shall make such rules as it deems necessary for the proper administration of the
Plan, shall make all other determinations necessary or advisable for the
administration of the Plan and shall correct any defect or supply any omission
or reconcile any inconsistency in the Plan or in any Stock Award granted under
the Plan in the manner and to the extent that the Committee deems desirable to
carry the Plan into effect. Any action taken or determination made by the
Committee pursuant to this and the other paragraphs of the Plan shall be
conclusive on all parties. The act or determination of a majority of the
Committee at a meeting where a quorum is present shall be deemed to be the act
or determination of the Committee.

         The Committee shall consist of at least three members of the Board of
Directors of the Company appointed by and holding office for a term determined
by and in the discretion of the Board of Directors of the Company. No Stock
Awards may be granted under the Plan to any member of the Committee during the
term of his membership on the Committee. No person shall be eligible to serve on
the Committee unless he is then a "disinterested person" within the meaning of
Paragraph (d) (3) of Rule 16b-3 of the Securities and Exchange Commission ("Rule
16b-3") promulgated under the Securities Exchange Act of 1934, as amended (the
"Act"), if and as such Rule is then in effect.

3. Eligibility to Receive Stock Awards. Stock Awards shall be issued under
Paragraph 5 of the Plan to those employees of the Company, its subsidiaries and
affiliated entities (excluding non-employee directors) who are issued Option
Shares under the Stock Option Plan and/or Conversion Shares under the
Convertible Debenture Plan during the Company's 1991 fiscal year and thereafter.
A Stock Award may be issued to the same employee on more than one occasion.

4. Shares Subject to the Plan. The aggregate number of shares of Stock which may
be issued to employees under Paragraph 5 of the Plan shall not exceed 1,000,000
shares of Stock. Such shares of Stock may consist of authorized but unissued
shares or previously issued shares reacquired by the Company. Any of such shares
of Stock which remain unissued at the termination of the Plan shall cease to be
subject to the Plan, but until termination of the Plan, the Company shall at all
times make available sufficient number of shares of Stock to meet the
requirements of the Plan. If shares of Stock issued under Paragraph 5 of the
Plan are forfeited to the Company, such shares of Stock shall again become
available for issuance under the Plan. The aggregate number of shares of Stock
which may be issued under the Plan may be adjusted to reflect a change in
capitalization of the Company, such as a stock dividend or stock split.

5. Issuance of Stock Awards. Stock Awards shall be issued to eligible employees
in the form of shares of stock ("Stock Award Shares") in an amount equal to (a)
one Stock Award Share for every five Option Shares acquired by exercise pursuant
to options (whether nonqualified or incentive) granted under the Stock Option
Plan and (b) one Stock Award Share for every five conversion shares acquired by
exercise of a conversation privilege of debentures under the Convertible
Debenture Plan on the third anniversary of the issuance of Option Shares issued
pursuant to the exercise of an option granted under the Stock Option Plan and/or
the underlying Conversion Shares issued pursuant to the exercise of a conversion
privilege of debentures issued under the Convertible Debenture Plan, to the
extent such eligible employee has not violated the Forfeiture Restrictions
defined in paragraph 6 below. The Committee or the Company shall notify in
writing each employee entitled to receive a Stock Award hereunder of the number
of Stock Awards Shares issued or to be issued prior to the 31st day of December
of

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each calendar year. In addition to a Stock Award, at the time of the issuance of
the Stock Award Shares the Company will pay to the Employee the dividends
attributable to the Stock Award Shares as though such shares had been issued and
outstanding for the three years, without interest.

6. Forfeiture Restrictions. The obligation of the Company to issue Stock Award
Shares is subject to the restrictions as described in this Paragraph 6 and shall
hereinafter be referred to as the "Forfeiture Restrictions." If an employee who
is issued a Stock Award based upon underlying Option Shares issued pursuant to
the exercise of an option granted under the Stock Option Plan and/or underlying
Conversion Shares issued pursuant to the exercise of a conversion privilege of
debentures issued under the Convertible Debenture Plan, sells or otherwise
transfers (other than by gift, devise or descent) such underlying Option Shares
and/or Conversion Shares within three years of the date of issuance of such
Option Shares and/or Conversion Shares, respectively, such Stock Award shall be
forfeited on a prorated basis of the one such Stock Award Share per five such
Option Shares and/or Conversion Shares sold or otherwise transferred; provided
that, in the event such employee sells or otherwise transfers more than fifty
percent of such underlying Option Shares and/or Conversion Shares within three
years of the date of issuance of such Option Shares and/or Conversion Shares,
respectively, all such Stock Award Shares shall be forfeited. Moreover, in the
event of termination of the employee's employment with the Company, its
subsidiaries and affiliated entities for any reason other than retirement at or
after age sixty-five, death or total and permanent disability within three years
of the date of issuance of underlying Option Shares and/or Conversion Shares,
respectively, upon which the issuance of Stock Award Shares are based, all such
Stock Award Shares shall be forfeited. An employee shall be considered to be in
the employment of an employer as long as he remains an employee of the employer,
whether active or on an authorized leave of absence. Any question as to whether
and when there has been a termination of such employment, and the cause of such
termination, shall be determined by the Committee and its determination shall be
final.

7. Lapse of Forfeiture Restrictions. The Forfeiture with respect to Stock Awards
not otherwise forfeited pursuant to the provisions of Paragraph 6 and issued to
an employee based upon underlying Option Shares issued pursuant to the exercise
of an option granted under the Stock Option Plan or underlying Conversion Shares
issued pursuant to the exercise of the conversion privilege of debentures issued
under the Convertible Debentures Plan shall lapse and be of no further force and
effect upon the expiration of three years following the date of issuance of such
Option Shares and/or Conversion Shares, respectively. Moreover, the Forfeiture
Restrictions with respect to Stock Awards issued to an Employee and not
otherwise forfeited pursuant to the provisions of Paragraph 6 shall lapse and be
of no further force and effect upon the termination of the employee's employment
with the Company, its subsidiaries and affiliated entities by reason of
retirement at or after age sixty-five, death or total and permanent disability.

8. Shares Received in Reorganization or Stock Split. The provisions of Paragraph
6 shall not apply to the transfer of Stock Awards or Stock Award Shares pursuant
to a plan of reorganization of the Company, but the stock or securities received
in exchange therefor, and any Stock Award received as a result of a stock split
with respect to Stock Award Shares, shall also become subject to the Forfeiture
Restrictions for all purposes of the Plan. Notwithstanding the foregoing, if the
Company is to be merged into or consolidated with one or more corporations and
the Company is not to be the surviving corporation, if the Company is to be
dissolved and liquidated, or if substantially all of the assets and business of
the Company are to be sold, the Committee may fix a date, prior to the effective
time of such merger, consolidation, dissolution and liquidation, or sale, on
which date all Forfeiture Restrictions with respect to all Stock Awards shall
lapse.

9. Term of Plan. The Plan shall be effective as of October 24, 1990. Unless
sooner terminated under the provisions of Paragraph 12, no further Stock Awards
shall be issued under Paragraph 5 after the issuance of the last underlying
Option Shares pursuant to the exercise of an option granted under the Stock
Option Plan and/or underlying conversion Shares pursuant to the exercise of a
conversion privilege of debentures issued under the Convertible Debenture Plan,
and the Plan shall terminate when all Stock Award Shares (and dividends thereon)
theretofore issued either have been forfeited to the Company or the Forfeiture
Restrictions thereon have lapsed.

10. Rights of Stockholder. Upon the issuance of Stock Award Shares to an
employee, such employee shall have all of the rights of a stockholder of the
Company with respect to such Restricted Shares, including the right to vote such
Stock Award Shares and the right to receive all dividends or other distributions
paid with respect to such Stock Award Shares.

11. Withholding of Tax. To the extent the issuance of Stock Award Shares or the
lapse of Forfeiture Restrictions results in the receipt of compensation by an
employee, the employer is authorized to withhold from any other cash
compensation then or thereafter payable to such employee any tax required to be
withheld by reason of the receipt of compensation resulting from the issuance of
Stock Award Shares or the lapse of Forfeiture Restrictions. In the alternative,
the employer may, in its

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discretion, at the request of the employee, satisfy any withholding requirements
by retaining the number of shares of Stock (for which Forfeiture Restrictions
have lapsed) necessary to satisfy any such withholding obligation.

12. Amendment or Termination of the Plan. The Board of Directors of the Company
in its discretion may terminate the Plan at any time with respect to any
Restricted Shares which have not theretofore been issued. The Board of Directors
shall have the right to alter or amend the Plan or any part thereof from time to
time; provided, that no change may be made which would impair the rights of an
employee to whom Stock Award Shares have theretofore been issued without the
consent of such employee.

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                           AMENDMENT NO. 1997-1 TO THE
                              AMENDED AND RESTATED
                         1991 EMPLOYEE STOCK BONUS PLAN

         This Amendment No. 1997-1 is made to the Baker Hughes Incorporated
Amended and Restated 1991 Employee Stock Bonus Plan ("the Plan"). Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Plan.

         WHEREAS, Baker Hughes Incorporated (the "Company") has determined that
it is in its best interest and that of its stockholders to amend the Plan as set
forth herein;

         NOW, THEREFORE, the Plan is amended as follows:

1. The first sentence of Paragraph 5 of the Plan is amended (A) to insert,
immediately following the phrase "(b) one Stock Award Share for every five
conversion shares acquired by exercise of a conversion privilege of debentures
under the Convertible Debenture Plan on" the phrase "the earliest to occur of
(i)" and (B) to insert, immediately prior to the "." at the end thereof, the
following:

", (ii) the occurrence of a Change in Control, and (iii) the termination of the
eligible employee's employment if (a) such eligible employee's employment is
terminated by the Company without Cause prior to a Change in Control (whether or
not a Change in Control ever occurs) and such termination was at the request or
direction of a Person who has entered into an agreement with the Company the
consummation of which would constitute a Change in Control, (b) such eligible
employee terminates his or her employment for Good Reason prior to a Change in
Control (whether or not a Change in Control ever occurs) and the circumstance or
event which constitutes Good Reason occurs at the request or direction of the
Person described in clause (a), or (c) such eligible employee's employment is
terminated by the Company without Cause or by the eligible employee for Good
Reason and such termination or the circumstance or event which constitutes Good
Reason is otherwise in connection with or in anticipation of a Change in Control
(whether or not a Change in Control ever occurs). A termination of employment
described in clause (iii) is hereinafter referred to as a "Qualifying
Termination"

2. Paragraph 5 of the Plan is amended by adding at the end thereof a new
paragraph as follows:

For purposes of the Plan:

"Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under
Section 12 of the Act.

"Beneficial Owner" shall have the meaning set forth in Rule 13d-3 promulgated
under the Act.

"Cause" for termination by the Company of the eligible employee's employment
shall mean (i) the willful and continued failure by the eligible employee to
substantially perform the eligible employee's duties with the Company (other
than any such failure resulting from the eligible employee's incapacity due to
physical or mental illness or any such actual or anticipated failure after the
issuance of a notice of termination for Good Reason by the eligible employee)
after a written demand for substantial performance is delivered to the eligible
employee by the CIC Committee, which demand specifically identifies the manner
in which the CIC Committee believes that the eligible employee has not
substantially performed the eligible employee's duties, or (ii) the willful
engaging by the eligible employee in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act,
or failure to act, on the eligible employee's part shall be deemed "willful"
unless done, or omitted to be done, by the eligible employee not in good faith
and without reasonable belief that the eligible employee's act, or failure to
act, was in the best interest of the Company and (y) 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 CIC Committee
by clear and convincing evidence that Cause exists.

A "Change in Control" shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:

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         (i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its affiliates) representing 20% or more of the combined voting power
of the Company's then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause (a)
of paragraph (iii) below; or

         (ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board of Directors of the Company and any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest relating to the election of directors
of the Company) whose appointment or election by the Board of Directors of the
Company or nomination for election by the Company's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended;
or

         (iii) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation,
other than (a) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 65% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (b) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities Beneficially Owned by such Person any securities acquired directly
from the Company or its Affiliates other than in connection with the acquisition
by the Company or its Affiliates of a business) representing 20% or more of the
combined voting power of the Company's then outstanding securities; or

         (iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 65% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

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

"Good Reason" for termination by the eligible employee of the eligible
employee's employment shall mean the occurrence (without the eligible employee's
express written consent) after any Change in Control, or prior to a Change in
Control under the circumstances described in clauses (iii)(b) and (c) of the
first sentence of this Paragraph 5 (treating all references in paragraphs (i)
through (vii) below to a "Change in Control" as references to a "Potential
Change in Control"), of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to act
described in paragraph (i), (v), (vi) or (vii) below, such act or failure to act
is corrected prior to the effective date of the eligible employee's termination
for Good Reason:

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         (i) the assignment to the eligible employee of any duties inconsistent
with the status of the eligible employee's position with the Company or a
substantial adverse alteration in the nature or status of the eligible
employee's responsibilities from those in effect immediately prior to the Change
in Control;

         (ii) a reduction by the Company in the eligible employee's annual base
salary as in effect on the date hereof or as the same may be increased from time
to time except for across-the-board salary reductions similarly affecting all
individuals having a similar level of authority and responsibility with the
Company and all individuals having a similar level of authority and
responsibility with any Person in control of the Company;

         (iii) the relocation of the eligible employee's principal place of
employment to a location more than 50 miles from the eligible employee's
principal place of employment immediately prior to the Change in Control or the
Company's requiring the eligible employee to be based anywhere other than such
principal place of employment (or permitted relocation thereof) except for
required travel on the Company's business to an extent substantially consistent
with the eligible employee's present business travel obligations;

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

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

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

         (vii) if the eligible employee is party to an individual employment,
severance or other similar agreement with the Company, any purported termination
of the eligible employee's employment which is not effected pursuant to the
notice of termination and other procedures specified therein.

The eligible employee's right to terminate the eligible employee's employment
for Good Reason shall not be affected by the eligible employee's incapacity due
to physical or mental illness. The eligible employee's continued employment
shall not constitute consent to, or a waiver of rights with respect to, any act
or failure to act constituting Good Reason hereunder. For purposes of any
determination regarding the existence of Good Reason, any claim by the eligible
employee that Good Reason exists shall be presumed to be correct unless the
Company establishes to the CIC Committee by clear and convincing evidence that
Good Reason does not exist.

"Person" shall have the meaning given in Section 3(a)(9) of the Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) 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.

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A "Potential Change in Control" shall be deemed to have occurred if the event
set forth in any one of the following paragraphs shall have occurred:

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

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

         (iii) any Person becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing 15% or more of either the then
outstanding shares of common stock of the Company or the combined voting power
of the Company's then outstanding securities (not including in the securities
Beneficially Owned by such Person any securities acquired directly from the
Company or its affiliates); or

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

3. The second sentence of Paragraph 6 of the Plan is amended by inserting
immediately prior to the "." at the end thereof the following:

; and provided further, that the provisions of this sentence shall be
inapplicable to any sale of Option Shares or Conversion Shares by an employee
holding a Stock Award if such sale occurs in connection with, or at any time
following, a Change in Control.

4. The third sentence of Paragraph 6 of the Plan is amended by deleting at the
beginning thereof the word "Moreover" and inserting in lieu thereof the phrase
"Subject to the lapse of forfeiture provisions following a Change in Control or
a Qualifying Termination provided under Paragraph 7".

5. Paragraph 7 of the Plan is amended (A) by inserting immediately following the
phrase "and be of no further force and effect upon" the phrase "the earliest to
occur of (i)" and (B) by inserting immediately prior to the "." at the end
thereof the following:

, (ii) the occurrence of a Change in Control, and (iii) the occurrence of a
Qualifying Termination

                  The effective date of this Amendment No. 1997-1 shall be July
23, 1997; provided, however, that, in the event that (A) the Company is party to
a transaction which is otherwise intended to qualify for "pooling of interests"
accounting treatment, (B) such transaction constitutes a Change in Control
within the meaning of the Plan and (C) individuals who satisfy the requirements
in clauses (i) and (ii) below constitute at least two-thirds (2/3) of the number
of directors of the entity surviving such transaction or any parent thereof:
individuals who (i) immediately prior to such transaction constitute the Board
of Directors of the Company and (ii) on the date hereof constitute the Board of
Directors of the Company and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of directors of the Company) whose
appointment or election by the Board of Directors of the Company or nomination
for election by the Company's stockholders was approved or recommended, by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment, election or
nomination for election was previously so approved or recommended then (a) this
Amendment No. 1997-1 shall, to the extent practicable, be interpreted so as to
permit such accounting treatment, and (b) to the extent that the application of
clause (a) of this sentence does not preserve the availability of such
accounting treatment, then, to the extent that any provision or combination of
provisions of this Amendment No. 1997-1 disqualifies the transaction as a
"pooling" transaction (including, if applicable, this entire Amendment No.
1997-1), the Board of Directors of the Company shall amend such provision or
provisions if and to the extent necessary (including declaring such provision or
provisions to be null and void as of the date hereof) so that such transaction
may be accounted for as a "pooling of interests." All determinations with
respect to this paragraph shall be made by the Company, based upon the advice of
the accounting firm whose opinion with respect to "pooling of interests" is
required as a condition to the consummation of such transaction. Except as
herein modified, the Plan shall remain in full force and effect.

                                                     BAKER HUGHES INCORPORATED

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

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                           AMENDMENT NO. 1999-1 TO THE
                              AMENDED AND RESTATED
                         1991 EMPLOYEE STOCK BONUS PLAN

         This Amendment No. 1999-1 is made to the Baker Hughes Incorporated
Amended and Restated 1991 Employee Stock Bonus Plan ("the Plan"). Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Plan.

         WHEREAS, Baker Hughes Incorporated (the "Company") has determined that
it is in its best interest and that of its stockholders to amend the Plan as set
forth herein;

         NOW, THEREFORE, the Plan is amended as follows:

1. Clauses (ii) and (iii) of the first sentence of Paragraph 5 of the Plan are
amended in their entirety to read as follows:

"(ii) the occurrence of a Change in Control other than an event described only
in clause (iii) of the definition of Change in Control set forth in Paragraph 5
of the Plan, and

(iii) the termination of the eligible employee's employment if (a) such eligible
employee's employment is terminated by the Company without Cause prior to a
Change in Control (whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person who has entered into an
agreement with the Company the consummation of which would constitute a Change
in Control, (b) such eligible employee terminates his or her employment for Good
Reason prior to a Change in Control (whether or not a Change in Control ever
occurs) and the circumstance or event which constitutes Good Reason occurs at
the request or direction of the Person described in clause (a), (c) such
eligible employee's employment is terminated by the Company without Cause or by
the eligible employee for Good Reason and such termination or the circumstance
or event which constitutes Good Reason is otherwise in connection with or in
anticipation of a Change in Control (whether or not a Change in Control ever
occurs) or (d) such eligible employee's employment is terminated by the Company
without Cause or by the eligible employee for Good Reason, in either case within
2 years following the occurrence of a Change in Control described in clause
(iii) of the definition of Change in Control set forth in Paragraph 5 of the
Plan."

2. The definition of Change in Control set forth in Paragraph 5 of the Plan is
amended in its entirety to read as follows:

"A "Change in Control" shall be deemed to have occurred if the event set forth
in any one of the following paragraphs shall have occurred:

         (i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its affiliates) representing 20% or more of the combined voting power
of the Company's then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause (a)
of paragraph (iii) below; or

         (ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board of Directors of the Company and any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest relating to the election of directors
of the Company) whose appointment or election by the Board of Directors of the
Company or nomination for election by the Company's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended;
or

         (iii) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation,
other than (a) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 65% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (b) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the

                                                                               8

<PAGE>

Beneficial Owner, directly or indirectly, of securities of the Company (not
including in the securities Beneficially Owned by such Person any securities
acquired directly from the Company or its Affiliates other than in connection
with the acquisition by the Company or its Affiliates of a business)
representing 20% or more of the combined voting power of the Company's then
outstanding securities; or

         (iv) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation,
other than a merger or consolidation immediately following which the individuals
who comprise the Board immediately prior thereto constitute at least a majority
of the board of directors of the Company, the entity surviving such merger or
consolidation or any parent thereof (or a majority plus one member where such
board comprises an odd number of members); or

         (v) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 65% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale. Notwithstanding the
foregoing, a "Change in Control" shall not be deemed to have occurred by virtue
of the consummation of any transaction or series of integrated transactions
immediately following which the record holders of the common stock of the
Company immediately prior to such transaction or series of transactions continue
to have substantially the same proportionate ownership in an entity which owns
all or substantially all of the assets of the Company immediately following such
transaction or series of transactions."

3. The second sentence of Paragraph 6 of the Plan is amended by inserting
immediately prior to the "." at the end thereof the following:

"other than an event described only in clause (iii) of the definition of Change
in Control set forth in Section 5 of the Plan; and provided further, that the
provisions of this sentence shall be inapplicable to any sale of Option Shares
or Conversion Shares by an employee holding a Stock Award if such sale occurs at
any time following a Qualifying Termination."

4. Clause (ii) of Paragraph 7 of the Plan is amended in its entirety to read as
follows:

"(ii) the occurrence of a Change in Control other than an event described only
in clause (iii) of the definition of Change in Control set forth in Section 5 of
the Plan."

         The effective date of this Amendment No. 1999-1 shall be January 27,
1999; provided, however, that, in the event that (A) the Company is party to a
transaction which is otherwise intended to qualify for "pooling of interests"
accounting treatment, (B) such transaction constitutes a Change in Control
within the meaning of the Plan and (C) individuals who satisfy the requirements
in clauses (i) and (ii) below constitute at least two-thirds (2/3) of the number
of directors of the entity surviving such transaction or any parent thereof:
individuals who (i) immediately prior to such transaction constitute the Board
of Directors of the Company and (ii) on the date hereof constitute the Board of
Directors of the Company and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of directors of the Company) whose
appointment or election by the Board of Directors of the Company or nomination
for election by the Company's stockholders was approved or recommended, by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment, election or
nomination for election was previously so approved or recommended then (a) this
Amendment No. 1999-1 shall, to the extent practicable, be interpreted so as to
permit such accounting treatment, and (b) to the extent that the application of
clause (a) of this sentence does not preserve the availability of such
accounting treatment, then, to the extent that any provision or combination of
provisions of this Amendment No. 1999-1 disqualifies the transaction as a
"pooling" transaction (including, if applicable, this entire Amendment No.
1999-1), the Board of Directors of the Company shall amend such provision or
provisions if and to the extent necessary (including declaring such provision or
provisions to be null and void as of the date hereof) so that such transaction
may be accounted for as a "pooling of interests." All determinations with
respect to this paragraph shall be made by the Company, based upon the advice of
the accounting firm whose opinion with respect to "pooling of interests" is
required as a condition to the consummation of such transaction. Except as
herein modified, the Plan shall remain in full force and effect.

                                            BAKER HUGHES INCORPORATED

                                            By:
                                               ---------------------------------
                                            Name:  G.S. Finley
                                            Title: Senior Vice President
                                                   and Chief Administrative
                                                   Officer

                                                                               9<PAGE>
                                                                   EXHIBIT 10.11

                            BAKER HUGHES INCORPORATED

                         RESTATED 1987 STOCK OPTION PLAN

                        (AMENDED AS OF OCTOBER 24, 1990)

                                    ARTICLE I
                                  INTRODUCTION

1. Purpose. This Restated 1987 Stock Option Plan, which shall be known as the
"1987 Stock Option Plan" and which is hereinafter referred to as the "Plan," is
intended to promote the interests of Baker Hughes Incorporated ("Company") and
its stockholders by encouraging employees of the Company, its subsidiaries and
affiliated entities and non-employee directors of the Company to acquire or
increase their equity interest in the Company, thereby giving them an added
incentive to work toward the continued growth and success of the Company. The
Board of Directors also contemplates that through the adoption of the Plan, the
Company, its subsidiaries and affiliated entities will be better able to compete
for the services of personnel needed for the continued growth and success of the
Company. The Plan is a restatement of the Baker Hughes Incorporated 1987
Employee Stock Option Plan and incorporates amendments thereto which become
effective upon approval by the Company's stockholders.

2. Shares Subject to the Plan. Subject to adjustment as provided in Article II,
Paragraph 3(e), Article III, Paragraph 3(e), and Article IV, Paragraph 5(e), the
aggregate number of shares of Common Stock, $1 par value per share, of the
Company ("Common Stock") to be delivered upon exercise of all options granted
under the Plan shall not exceed 6,500,000 shares. In the event the number of
shares to be delivered upon the exercise in full of any option granted under the
Plan is reduced for any reason whatsoever or in the event any option granted
under the Plan can no longer under any circumstances be exercised, the number of
shares no longer subject to such option shall thereupon be released from such
option and shall thereafter be available to be re-optioned under the Plan.
Shares issued pursuant to the exercise of options granted under the Plan shall
be fully paid and non-assessable.

3. Administration of the Plan. Subject to the provisions of the Plan, the
Compensation Committee of the Board of Directors of the Company (the
"Committee") shall interpret the Plan and all options granted under the Plan,
shall make such rules as it deems necessary for the proper administration of the
Plan, shall make all other determinations necessary or advisable for the
administration of the Plan and shall correct any defect or supply any omission
or reconcile any inconsistency in the Plan or in any option granted under the
Plan in the manner and to the extent that the Committee deems desirable to carry
the Plan or any option into effect. Any action taken or determination made by
the Committee pursuant to this and the other paragraphs of the Plan shall be
conclusive on all parties. The act or determination of a majority of the
Committee shall be deemed to be the act or determination of the Committee.

         The Committee shall consist of at least three members of the Board of
Directors of the Company appointed by and holding office during the pleasure of
the Board of Directors of the Company. Other than options granted to
Non-Employee Directors (as hereinafter defined) pursuant to Article IV, no
options may be granted under the Plan to any member of the Committee during the
term of his membership on the Committee. No person shall be eligible to serve on
the Committee unless he is then a "disinterested person" within the meaning of
Paragraph (d)(3) of Rule 16b-3 of the Securities and Exchange Commission ("Rule
16b-3") promulgated under the Securities Exchange Act of 1934, as amended (the
"Act"), if and as the Rule is then in effect.

4. Amendment and Discontinuance of the Plan. The Board of Directors of the
Company may amend, suspend or terminate the Plan; provided, however, that each
such amendment of the Plan (a) extending the period within which options may be
granted under the Plan, (b) increasing the number of shares of Common Stock to
be optioned under the Plan except as provided in Article II, Paragraph 3(e),
Article III, Paragraph 3(e), and Article IV, Paragraph 5(e), (c) reducing the
exercise prices per share provided in the Plan, (d) changing the class of
employees to whom options may be granted under Article II or III, (e) modifying
the provisions of Article IV, or (f) granting options to Non-Employee Directors
other than pursuant to Article IV, shall, in each case, be subject to approval
by the stockholders of the Company; provided, further, however, that no
amendment, suspension or termination of the Plan may cause the Plan to fail to
meet the requirements of Rule 16b-3 or may, without the consent of the holder of
an option granted under Article II, III, or IV, terminate such option or
adversely affect such person's rights in any material respect.

<PAGE>

5. Granting of Options to Employees. The Committee shall have authority to
grant, prior to the expiration date of the Plan, to such eligible employees and
officers as may be selected by it ("Employee Optionees"), options to purchase,
on the terms and conditions hereinafter set forth in Articles II and III,
authorized but unissued, or reacquired, shares of Common Stock. The Committee
shall also have authority to determine whether such options granted to Employee
Optionees are granted pursuant to Article II or Article III, as hereinafter set
forth. Options granted to Employee Optionees under Article III shall be
"incentive stock options" as defined in Section 422A of the Internal Revenue
Code of 1986, as amended ("Code"), and are hereinafter referred to as "incentive
stock options." All other options granted to Employee Optionees under the Plan
shall be granted pursuant to Article II, and are hereinafter referred to as
"nonqualified options." In selecting Employee Optionees, and in determining the
number of shares to be covered by each option granted to Employee Optionees the
Committee may consider the office or position held by the Employee Optionee, the
Employee Optionee's degree of responsibility for and contribution to the growth
and success of the Company, the Employee Optionee's length of service, age,
promotions, potential and any other factors which it may consider relevant.

6. Granting of Options to Non-Employee Directors. All options granted to
Non-Employee Directors shall be options to purchase, on the terms and conditions
hereinafter set forth in Article IV, authorized but unissued, or reacquired,
shares of Common Stock and shall be nonqualified options.

7. Effective Date. The Plan shall become effective as of January 28, 1987 and
shall expire on November 15, 1996.

8. Miscellaneous. All references in the Plan to "Articles," "Paragraphs," and
other subdivisions refer to the corresponding Articles, Paragraphs, and
subdivisions of the Plan.

9. Rule 16b-3 Compliance. The Company intends:

         (a) that the Plan meet the requirements of Rule 16b-3;

         (b) that participation by Non-Employee Directors under Article IV of
the Plan will not prohibit them from being "disinterested persons" within the
meaning of Rule 16b-3(d)(3) with respect to administration of the Plan or with
respect to administration of any other plan of the Company;

         (c) that transactions of the type specified in the first paragraph of
Rule 16b-3 by Non-Employee Directors pursuant to Article IV of the Plan will be
exempt from the operation of Section 16(b) of the Act; and

         (d) that transactions of the type specified in the first paragraph of
Rule 16b-3 by officers of the Company (whether or not they are directors)
pursuant to the Plan will be exempt from the operation of Section 16(b) of the
Act. In all cases, the terms, provisions, conditions and limitations of the Plan
shall be construed and interpreted consistent with the Company's intent as
stated in this Article I, Paragraph 9.

                                   ARTICLE II
                           NONQUALIFIED STOCK OPTIONS

1. Eligible Employees. Key employees and officers (whether or not they are
directors) of the Company, its subsidiaries and affiliated entities shall be
eligible to receive nonqualified options under this Article II.

2. Calculation of Exercise Price. The exercise price to be paid for each share
of Common Stock deliverable upon exercise of each nonqualified option granted
under Article II shall be equal to the fair market value per share of Common
Stock at the time of grant as determined by the Committee, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal, and shall not be less than the lesser of (i) the per share price of the
last sale of Common Stock on the trading day prior to the grant of such option,
and (ii) the arithmetic average of the closing prices per share of the Common
Stock on all days on which such stock was traded during the 90-day period before
the date of grant. The exercise price for each nonqualified option granted under
Article II shall be subject to adjustment as provided in Article II, Paragraph
3(e).

3. Terms and Conditions of Options. Nonqualified options granted under Article
II shall be in such form as the Committee may from time to time approve. Options
granted under Article II shall be subject to the following terms and

<PAGE>

conditions and may contain such additional terms and conditions, not
inconsistent with Article II, as the Committee shall deem desirable:

         (a) Option Period and Conditions and limitations on Exercise. Subject
to Article II, Paragraph 4, no nonqualified option granted under Article II
shall be exercisable with respect to any of the shares subject to the option
later than the date which is ten years after the date of grant (the
"Nonqualified Option Expiration Date"). To the extent not prohibited by other
provisions of the Plan, each nonqualified option granted under Article II shall
be exercisable at such time or times as the Committee in its discretion may
determine at or prior to the time such option is granted; provided, however,
that unless the Committee determines otherwise, each nonqualified option granted
under Article II shall be exercisable from time to time, in whole or in part, at
any time prior to the Nonqualified Option Expiration Date.

         (b) Termination of Employment and Death. For purposes of Article II and
each nonqualified option granted under Article II, an Employee Optionee's
employment shall be deemed to have terminated at the close of business on the
day preceding the first date on which he is no longer for any reason whatsoever
(including his death) employed by the Company or a subsidiary or affiliated
entity of the Company. If an Employee Optionee's employment is terminated for
any reason whatsoever (including his death), each nonqualified option granted to
him under Article II and all of his rights thereunder shall wholly and
completely terminate:

                  (1) At the time the Employee Optionee's employment is
         terminated, with respect to options not then exercisable; or

                  (2) At the time the Employee Optionee's employment is
         terminated if his employment is terminated because he is discharged for
         fraud, theft or embezzlement committed against the Company or a
         subsidiary, affiliated entity or customer of the Company, or for
         conflict of interest (other than legitimate competition); or

                  (3) At the expiration of a period of one year after the
         Employee Optionee's death (but in no event later than the Nonqualified
         Option Expiration Date) if the Employee Optionee's employment is
         terminated by reason of his death. To the extent exercisable, a
         nonqualified option granted under Article II may be exercised by the
         Employee Optionee's estate or by the person or persons who acquire the
         right to exercise his option by bequest or inheritance with respect to
         any or all of the shares remaining subject to his option at the time of
         his death; or

                  (4) Unless it is otherwise provided in the option agreement,
         at the expiration of a period of three years after the Employee
         Optionee's employment is terminated because of retirement or disability
         (but in no event later than the Nonqualified Option Expiration Date);
         or

                  (5) At the expiration of a period of three months after the
         Employee Optionee's employment is terminated (but in no event later
         than the Nonqualified Option Expiration Date) if the Employee
         Optionee's employment is terminated for any reason other than his
         death, retirement, disability or the reasons specified in Article II,
         Paragraph (b)(2), with respect to options then exercisable.

         (c) Manner of Exercise. In order to exercise a nonqualified option
granted under Article II, the person or persons entitled to exercise it shall
deliver to the Company payment in full for the shares being purchased, together
with any required withholding tax. The payment of the exercise price for each
option granted under Article II and any required withholding tax shall either be
in cash or through delivery to the Company of shares of Common Stock, or by any
combination of cash or shares; the value of each share of Common Stock delivered
shall be deemed to be equal to the per share price of the last sale of Common
Stock on the trading day prior to the date the option is exercised, based on the
composite transactions in the Common Stock as reported in The Wall Street
Journal. If the Committee so requires, such person or persons shall also deliver
a written representation that all shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such shares.

         (d) Options Not Transferable. No nonqualified option granted under
Article II shall be transferable otherwise than by will or by the laws of
descent and distribution and, during the lifetime of the Employee Optionee to
whom any such option is granted, it shall be exercisable only by the Employee
Optionee. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any
nonqualified option granted under Article II, or any right thereunder, contrary
to the provisions hereof, shall be void and ineffective, shall give no right to
the purported transferee, and shall, at the sole discretion of the Committee,
result in forfeiture of the option with respect to the shares involved in such
attempt.

<PAGE>

         (e) Adjustment of Shares. In the event that at any time after the
effective date of the Plan the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares of the Company or
other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or combination
of shares, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares subject to Article II (including shares as to
which all outstanding nonqualified options granted under Article II, or portions
thereof then unexercised, shall be exercisable), to the end that after such
event the shares subject to Article II of the Plan and each Employee Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Such adjustment in an outstanding nonqualified option granted under
Article II shall be made without change in the total price applicable to he
option or the unexercised portion of the option (except for any change in the
aggregate price resulting from rounding-off of share quantities or prices) and
with any necessary corresponding adjustment in exercise price per share. Any
such adjustment made by the Committee shall be final and binding upon all
Employee Optionees, the Company, and all other interested persons.

         (f) Listing and Registration of Shares. Each nonqualified option
granted under Article II shall be subject to the requirement that if at any time
the Committee determines, in its discretion, that the listing, registration, or
qualification of the shares subject to such option under any securities exchange
or under any state or Federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the issue or purchase of shares thereunder, such option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained and the
same shall have been free of any conditions not acceptable to the Committee.

4. Amendment. The Committee may, with the consent of the person or persons
entitled to exercise any outstanding nonqualified option granted under Article
II, amend such nonqualified option; provided, however, that any such amendment
increasing the number of shares of Common Stock subject to such option (except
as provided in Article II, Paragraph 3(e)) or reducing the exercise price per
share of such option (except as provided in Article II, Paragraph 3(e)) shall in
each case be subject to approval by the stockholders of the Company. The
Committee may at any time or from time to time, in its discretion, in the case
of any nonqualified option previously granted under Article II which is not then
immediately exercisable in full, accelerate the time or times at which such
option may be exercised to any earlier time or times. The Committee, in its
absolute discretion, may grant to holders of outstanding nonqualified options
granted under Article II, in exchange for the surrender and cancellation of such
options, new options having exercise prices lower (or higher) than the exercise
price provided in the options so surrendered and cancelled and containing such
other terms and conditions as the Committee may deem appropriate.

5. Other Provisions.

         (a) The person or persons entitled to exercise, or who have exercised,
a nonqualified option granted under Article II shall not be entitled to any
rights as a stockholder of the Company with respect to any shares subject to
such option until he shall have become the holder of record of such shares.

         (b) No nonqualified option granted under Article II shall be construed
as limiting any right which the Company or any subsidiary or affiliated entity
of the Company may have to terminate at any time, with or without cause, the
employment of any person to whom such option has been granted.

         (c) Notwithstanding any provision of the Plan or the terms of any
nonqualified option granted under Article II, the Company shall not be required
to issue any shares hereunder if such issuance would, in the judgment of the
Committee, constitute a violation of any state or Federal law or of the rules or
regulations of any governmental regulatory body.

                                   ARTICLE III
                             INCENTIVE STOCK OPTIONS

1. Eligible Employees. Key employees and officers (whether or not they are
directors) of the Company, its subsidiaries and affiliated entities shall be
eligible to receive incentive stock options under this Article III. As used in
this Article III, the terms "Parent Corporation" and "Subsidiary Corporation"
shall have the meanings ascribed to them in Section 425 of the Code.

<PAGE>

2. Calculation of Exercise Price. The exercise price to be paid for each share
of Common Stock deliverable upon exercise of each incentive stock option granted
under Article III shall be equal to the fair market value per share of Common
Stock at the time of grant as determined by the Committee, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal, and shall not be less than the per share price of the last sale of
Common Stock on the trading day prior to the grant of such option; provided,
however, that in the case of an Employee Optionee who, at the time such option
is granted, owns (within the meaning of Section 425(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company or
of its Parent Corporation or any Subsidiary Corporation, then the exercise price
per share shall be at least 110% of the fair market value per share of Common
Stock at the time of grant. The exercise price for each incentive stock option
shall be subject to adjustment as provided in Article III, Paragraph 3(e).

3. Terms and Conditions of Options. Incentive stock options granted under
Article III shall be in such form as the Committee may from time to time
approve. Options granted under Article III shall be subject to the following
terms and conditions and may contain such additional terms and conditions, not
inconsistent with Article III, as the Committee shall deem desirable:

         (a) Option Period and Conditions and Limitations on Exercise. Subject
to Article III, Paragraph 4, no incentive stock option granted under Article III
shall be exercisable with respect to any of the shares subject to such option
later than the date which is ten years after the date of grant; provided,
however, that in the case of an Employee Optionee who, at the time such option
is granted, owns (within the meaning of Section 425(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company or
of its Parent Corporation or any Subsidiary Corporation, then such option shall
not be exercisable with respect to any of the shares subject to such option
later than five years after the date of grant. The date on which an incentive
stock option ultimately becomes unexercisable under the previous sentence is
hereinafter referred to as the "ISO Expiration Date." To the extent not
prohibited by other provisions of the Plan, each incentive stock option granted
under Article III shall be exercisable at such time or times as the Committee in
its discretion may determine at or prior to the time such option is granted;
provided, however, that unless the Committee determines otherwise, each
incentive stock option granted under Article III shall be exercisable from time
to time, in whole or in part, subject to the dollar limitations set forth in
Article III, Paragraph 3(g), at any time prior to the ISO Expiration Date.

         (b) Termination of Employment and Death. For purposes of Article III
and each incentive stock option granted under Article III, an Employee
Optionee's employment shall be deemed to have terminated at the close of
business on the day preceding the first date on which he is no longer for any
reason whatsoever (including his death) employed by the Company or a subsidiary
or affiliated entity of the Company. If an Employee Optionee's employment is
terminated by any reason whatsoever (including his death), each incentive stock
option granted to him and all of his rights thereunder shall wholly and
completely terminate:

                  (1) At the time the Employee Optionee's employment is
         terminated, with respect to options not then exercisable; or

                  (2) At the time the Employee Optionee's employment is
         terminated if his employment is terminated because he is discharged for
         fraud, theft or embezzlement committed against the Company or a
         subsidiary, affiliated entity or customer of the Company, or for
         conflict of interest (other than legitimate competition); or

                  (3) At the expiration of a period of one year after the
         Employee Optionee's death (but in no event later than the ISO
         Expiration Date) if the Employee Optionee's employment is terminated by
         reason of his death. To the extent exercisable, an incentive stock
         option granted under Article III of the Plan may be exercised by the
         Employee Optionee's estate or by the person or persons who acquire the
         right to exercise his option by bequest or inheritance with respect to
         any or all of the shares remaining subject to his option at the time of
         his death; or

                  (4) Unless it is otherwise provided in the option agreement,
         at the expiration of a period of three years after the Employee
         Optionee's employment is terminated because of retirement or disability
         (but in no event later than the ISO Expiration Date); or

                  (5) At the expiration of a period of three months after the
         Employee Optionee's employment is terminated (but in no event later
         than the ISO Expiration Date) if the Employee Optionee's employment is
         terminated for any other reason than his death, retirement, disability
         or the reasons specified in Article III, Paragraph (b)(2), with respect
         to options then exercisable.

<PAGE>

                  In the event and to the extent that an incentive stock option
         granted under Article III is not exercised (i) within three months
         after the Employee Optionee's employment is terminated because of
         retirement or disability not within the meaning of Section 22(e)(3) of
         the Code or (ii) within one year after the Employee Optionee's
         employment is terminated because of disability within the meaning of
         Section 22(e)(3) of the Code, such option shall be taxed as a
         nonqualified option and shall be subject to the manner of exercise
         provisions described in Article II, Paragraph 3(c).

         (c) Manner of Exercise. In order to exercise an incentive stock option
granted under Article III, the person or persons entitled to exercise it shall
deliver to the Company payment in full for the shares being purchased. The
payment of the exercise price for each option granted under Article III shall
either be in cash or through delivery to the Company of shares of Common Stock,
or by any combination of cash or shares; the value of each share of Common Stock
delivered shall be deemed to be equal to the per share price of the last sale of
Common Stock on the trading day prior to the date the option is exercised, based
on the composite transactions in the Common Stock as reported in The Wall Street
Journal. If the Committee so requires, such person or persons shall also deliver
a written representation that all shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such shares.

         (d) Options Not Transferable. No incentive stock option granted under
Article III shall be transferable otherwise than by will or by the laws of
descent and distribution and, during the lifetime of the Employee Optionee to
whom any option is granted, it shall be exercisable only by such Employee
Optionee. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any
incentive stock option granted under Article III, or any right thereunder,
contrary to the provisions hereof, shall be void and ineffective, shall give no
right to the purported transferee, and shall, at the sole discretion of the
Committee, result in forfeiture of the option with respect to the shares
involved in such attempt.

         (e) Adjustment of Shares. In the event that at any time after the
effective date of the Plan the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares of the Company or
other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or combination
of shares, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares subject to Article III (including shares as to
which all outstanding incentive stock options granted under Article III, or
portions thereof then unexercised, shall be exercisable), to the end that after
such event the shares subject to Article III of the Plan and each Employee
Optionee's proportionate interest shall be maintained as before the occurrence
of such event. Such adjustment in an outstanding incentive stock option shall be
made without change in the total price applicable to the option or the
unexercised portion of the option (except for any change in the aggregate price
resulting from rounding-off of share quantities or prices) and with any
necessary corresponding adjustment in exercise price per share. Any such
adjustment made by the Committee shall be final and binding upon all Employee
Optionees, the Company, and all other interested persons. Any adjustment of an
incentive stock option under this paragraph shall be made in such manner as not
to constitute a "modification" within the meaning of Section 425(h)(3) of the
Code.

         (f) Listing and Registration of Shares. Each incentive stock option
granted under Article III shall be subject to the requirement that if at any
time the Committee determines, in its discretion, that the listing,
registration, or qualification of the shares subject to such option upon any
securities exchange or under any state or Federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the issue or purchase of shares thereunder,
such option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained and the same shall have been free of any conditions not acceptable to
the Committee.

         (g) Limitation on Amount. Notwithstanding any other provision of the
Plan, the aggregate fair market value (determined as of the time the incentive
stock option is granted) of the Common Stock with respect to which incentive
stock options are exercisable for the first time by an Employee Optionee during
any calendar year cannot exceed $100,000 as provided under Section 422A(b)(7) of
the Code.

4. Amendment. The Committee may, with the consent of the person or persons
entitled to exercise any outstanding incentive stock option granted under
Article III, amend such incentive stock option; provided, however, that any such
amendment increasing the number of shares of Common Stock subject to such option
(except as provided in Article III, Paragraph 3(e)) or reducing the exercise
price per share of such option (except as provided in Article III, Paragraph
3(e)) shall in each case be subject to approval by the stockholders of the
Company. Subject to Article III, Paragraph 3(g), the Committee may at any time
or from time to time, in its discretion, in the case of any incentive stock
option previously granted under

<PAGE>

Article III which is not then immediately exercisable in full, accelerate the
time or times at which such option may be exercised to any earlier time or
times.

5. Other Provisions.

         (a) The person or persons entitled to exercise, or who have exercised,
an incentive stock option granted under Article III shall not be entitled to any
rights as a stockholder of the Company with respect to any shares subject to
such option until he shall have become the holder of record of such shares.

         (b) No incentive stock option granted under Article III shall be
construed as limiting any right which the Company or any subsidiary or
affiliated entity of the Company may have to terminate at any time, with or
without cause, the employment of any person to whom such option has been
granted.

         (c) Notwithstanding any provision of the Plan or the terms of any
incentive stock option granted under Article III, the Company shall not be
required to issue any shares hereunder if such issuance would, in the judgment
of the Committee, constitute a violation of any state or Federal law or of the
rules or regulations of any governmental regulatory body.

         (d) The Committee may require any person who exercises an incentive
stock option to give prompt notice to the Company of any disposition of shares
of Common Stock acquired upon exercise of an incentive stock option within one
year after the transfer of shares to such person.

                                   ARTICLE IV
                       NON-EMPLOYEE DIRECTOR STOCK OPTIONS

1. Eligible Persons. Persons who are members of the Board of Directors of the
Company but are neither employees nor officers of the Company, its subsidiaries
or affiliated entities ("Non-Employee Directors") shall be eligible to receive
options under, and solely under, this Article IV.

2. Initial Granting of Options to Non-Employee Directors. Subject to the
limitation of the number of shares of Common Stock set forth in Article I,
Paragraph 2, each person who is a Class I or II Non-Employee Director on the
date of the Company's 1989 Annual Meeting of Stockholders and each Class III
Non-Employee Director elected at such meeting (collectively the "1989
Non-Employee Directors"), is hereby granted, effective on such date (which date
shall be the date of grant for purposes hereof), a nonqualified option to
purchase 2,000 shares of Common Stock. Subject to the limitation of the number
of shares of Common Stock set forth in Article I, Paragraph 2, each Non-Employee
Director who is elected to the Board of Directors of the Company after the date
of the Company's 1989 Annual Meeting of Stockholders (excluding the 1989
Non-Employee Directors), is hereby granted, effective on the date of his initial
election (which date shall be the date of grant for purposes hereof), a
nonqualified option to purchase 2,000 shares of Common Stock.

3. Annual Granting of Options to Non-Employee Directors. Subject to the
limitation of the number of shares of Common Stock set forth in Article I,
Paragraph 2, a nonqualified option to purchase 1,000 shares of Common Stock is
hereby granted, effective the fourth Wednesday of October of 1989 and each year
thereafter until the expiration of the Plan, to each person who is a
Non-Employee Director on each such date (which date shall be the date of grant
for purposes hereof).

4. Calculation of Exercise Price. The exercise price to be paid for each share
of Common Stock deliverable upon exercise of each option granted under Article
IV shall be equal to the lesser of (a) the per share price of the last sale of
Common Stock on the trading day prior to the grant of such option, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal, and (b) the arithmetic average of the closing prices per share of
Common Stock on all days in which such stock was traded during the 90-day period
before the date of grant, based on the composite transactions in the Common
Stock as reported by The Wall Street Journal. The exercise price for each option
granted under Article IV shall be subject to adjustment as provided in Article
IV, Paragraph 5(e).

5. Terms and Conditions of Options. Subject to the provisions of this Article
IV, Paragraph 5, options granted under Article IV shall be in such form as the
Committee may from time to time approve. Options granted under Article IV shall
be subject to the following terms and conditions:

<PAGE>

         (a) Option Period and Conditions and Limitations on Exercise. Each
option granted under Article IV shall be exercisable from time to time, in whole
or in part, at any time after one year from the date of grant and prior to the
date which is seven years after the date of grant (the "Option Expiration
Date").

         (b) Termination of Directorship and Death. For purposes of Article IV
and each option granted under Article IV, a Non-Employee Director's directorship
shall be deemed to have terminated at the close of business on the day preceding
the first date on which he ceases to be a member of the Board of Directors of
the Company for any reason whatsoever (including his death). If a Non-Employee
Director's directorship is terminated for any reason whatsoever (including his
death), each option granted to him under Article IV and all of his rights
thereunder shall wholly and completely terminate:

                  (1) At the time the Non-Employee Director's directorship is
         terminated if termination occurs within the one-year period following
         the date of grant; or

                  (2) At the time the Non-Employee Director's directorship is
         terminated if his directorship is terminated as a result of his removal
         from the Board of Directors for cause (other than disability or in
         accordance with the provisions of the Company's Bylaws regarding
         automatic termination of directors' terms of office); or

                  (3) At the expiration of a period of one year after the
         Non-Employee Director's death (but in no event later than the Option
         Expiration Date) if the Non-Employee Director's directorship is
         terminated by reason of his death. To the extent exercisable, an option
         granted under Article IV may be exercised by the Non-Employee
         Director's estate or by the person or persons who acquire the right to
         exercise his option by bequest or inheritance with respect to any or
         all of the shares remaining subject to his option at the time of his
         death; or

                  (4) At the expiration of a period of three years after the
         Non-Employee Director's directorship is terminated as a result of such
         person's resignation or removal from the Board of Directors of the
         Company because of disability or in accordance with the provisions of
         the Company's Bylaws regarding automatic termination of directors'
         terms of office (but in no event later than the Option Expiration
         Date); or

                  (5) At the expiration of a period of three months after the
         Non-Employee Director's directorship is terminated (but in no event
         later than the Option Expiration Date) if the Non-Employee Director's
         directorship is terminated for any reason other than the reasons
         specified in Article IV, Paragraphs (b)(2) through (b)(4).

         (c) Manner of Exercise. In order to exercise an option granted under
Article IV, the person or persons entitled to exercise it shall deliver to the
Company payment in full for the shares being purchased, together with any
required withholding tax. The payment of the exercise price for each option
granted under Article IV and any required withholding tax shall either be in
cash or through delivery to the Company of shares of Common Stock, or by any
combination of cash or shares; the value of each share of Common Stock delivered
shall be deemed to be equal to the per share price of the last sale of Common
Stock on the trading day prior to the date the option is exercised, based on the
composite transactions in the Common Stock as reported in The Wall Street
Journal. If the Committee so requires, such person or persons shall also deliver
a written representation that all shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such shares.

         (d) Options Not Transferable. No option granted under Article IV shall
be transferable otherwise than by will or by the laws of descent and
distribution and, during the lifetime of the Non-Employee Director to whom any
such option is granted, it shall be exercisable only by such Non-Employee
Director. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any
option granted under Article IV, or any right thereunder, contrary to the
provisions hereof, shall be void and ineffective, shall give no right to the
purported transferee, and shall, at the sole discretion of the Committee, result
in forfeiture of the option with respect to the shares involved in such attempt.

         (e) Adjustment of Shares. In the event that at any time after the
effective date of the Plan the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares of the Company or
other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or combination
of shares, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares subject to Article IV (including shares as to
which all outstanding options granted under Article IV, or portions thereof then
unexercised, shall be exercisable), to the end that after such event the shares
subject to Article IV of the Plan and each Non-Employee Director's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment

<PAGE>

in an outstanding option granted under Article IV shall be made without change
in the total price applicable to the option or the unexercised portion of the
option (except for any change in the aggregate price resulting from rounding-off
of share quantities or prices) and with any necessary corresponding adjustment
in exercise price per share. Any such adjustment made by the Committee shall be
final and binding upon all Non-Employee Directors, the Company, and all other
interested persons.

         (f) Listing and Registration of Shares. Each option granted under
Article IV shall be subject to the requirement that if at any time the Committee
determines, in its discretion, that the listing, registration, or qualification
of the shares subject to such option under any securities exchange or under any
state or Federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
issue or purchase of shares thereunder, such option may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained and the same shall have been free
of any conditions not acceptable to the Committee.

6. Other Provisions.

         (a) The person or persons entitled to exercise, or who have exercised,
an option granted under Article IV shall not be entitled to any rights as a
stockholder of the Company with respect to any shares subject to such option
until he shall have become the holder of record of such shares.

         (b) No option granted under Article IV shall be construed as limiting
any right which either the stockholders of the Company or the Board of Directors
of the Company may have to remove at any time, with or without cause, any person
to whom such option has been granted from the Board of Directors of the Company.

         (c) Notwithstanding any provision of the Plan or the terms of any
option granted under Article IV, the Company shall not be required to issue any
shares hereunder if such issuance would, in the judgment of the Committee,
constitute a violation of any state or Federal law or of the rules or
regulations of any governmental regulatory body.

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