BAKER HUGHES INCORPORATED CHANGE IN CONTROL SEVERANCE PLAN

Exhibit 10.3 BAKER HUGHES INCORPORATED CHANGE IN CONTROL SEVERANCE PLAN (Amendment and Restatement Effective January 1, 2009)

BAKER HUGHES INCORPORATED
CHANGE IN CONTROL SEVERANCE PLAN
(Amendment and Restatement Effective January 1, 2009)       WHEREAS, Baker Hughes Incorporated, a corporation organized and existing under the laws of the State of Delaware (the " Company "), recognizes that one of its most valuable assets is its key management executives;       WHEREAS , the Company would like to provide severance benefits in the event that the employment of a key management executive is involuntarily terminated in conjunction with a change in control;       WHEREAS , the Company previously established the Baker Hughes Incorporated Change in Control Severance Plan (the " Plan "); and       WHEREAS , the Company desires to amend the Plan to comply with section 409A of the Internal Revenue Code of 1986, as amended.       NOW, THEREFORE , the Company adopts the amendment and restatement of the Plan, effective January 1, 2009.

TABLE OF CONTENTS

TABLE OF CONTENTS
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BAKER HUGHES INCORPORATED
CHANGE IN CONTROL SEVERANCE PLAN 1. ESTABLISHMENT AND OBJECTIVE       1.1 Establishment. Baker Hughes Incorporated, a Delaware corporation, hereby establishes a plan for certain designated employees to be known as the "Baker Hughes Incorporated Change in Control 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 reward such employees of the Company by providing replacement income and certain benefits in conjunction with a Change in Control (defined below). 2. DEFINITIONS       2.1 Capitalized Terms. Whenever used in the 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) the same controlled group of corporations within the meaning of section 414(b) of the Code with Baker Hughes, (ii) a trade or business (whether or not incorporated) which is under common control (within the meaning of section 414(c) of the Code) with Baker Hughes 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 Annual Incentive Compensation Plan, as amended from time to time, any guidelines issued pursuant to such plan, and any other annual incentive bonus plans adopted by the Company from time to time which are in replacement of such plan.      " Applicable Multiple " means, with respect to any Participant, the applicable multiple specified in Exhibit A .      " Assets " means assets of any kind owned by Baker Hughes, including but not limited to securities of Baker Hughes’ direct and indirect subsidiaries and Affiliates.      " Baker Hughes " means Baker Hughes Incorporated, a Delaware corporation, and any successor by merger or otherwise.      " Base Compensation " means a Participant’s base salary or wages (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 any elective deferrals made by the Participant pursuant to the Supplemental Retirement Plan (other than deferrals of bonuses) or 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 (including but not limited to equity-based compensation), commissions, expense reimbursements or other expense allowances,

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fringe benefits (cash and noncash), moving expenses, deferred compensation (other than elective deferrals by the Participant under a qualified cash or deferred arrangement described in section 401(k) of the Code or the Supplemental Retirement Plan that are expressly included in " Base Compensation " under the foregoing provisions of this definition), welfare benefits as defined in ERISA, overtime pay, special performance compensation amounts and severance compensation.      " Beneficial Owner " or " Beneficial Ownership " shall have the meaning ascribed to those terms in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.      " Board " means the Board of Directors of Baker Hughes or other governing body of Baker Hughes or its direct or indirect parent.      " Bonus " means the sum of (a) the amount of the annual incentive bonus, if any, paid in cash by the Company under the Annual Incentive Plan to or for the benefit of an Employee for services rendered or labor performed during a fiscal year of the Company and (b) the amount of the discretionary cash bonus or other cash bonus paid outside the Annual Incentive Plan, if any, paid in cash by the Company to or for the benefit of an Employee for services rendered or labor performed during the same fiscal year of the Company. An Employee’s Bonus shall be determined by including any portion thereof that such Participant could have received in cash in lieu of (i) any elective deferrals made by such Participant pursuant to the Supplemental Retirement Plan or (ii) elective contributions made on such Participant’s 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.      " Change in Control " means the occurrence of any of the following events:      (a) the individuals who are Incumbent Directors cease for any reason to constitute a majority of the members of the Board;

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     (b) the consummation of a Merger of Baker Hughes or an Affiliate of Baker Hughes with another Entity, unless the individuals and Entities who were the Beneficial Owners of the Voting Securities of Baker Hughes outstanding immediately prior to such Merger own, directly or indirectly, at least 50 percent of the combined voting power of the Voting Securities of any of Baker Hughes, the surviving Entity or the parent of the surviving Entity outstanding immediately after such Merger;      (c) any Person, other than a Specified Owner, becomes a Beneficial Owner, directly or indirectly, of securities of Baker Hughes representing 30 percent or more of the combined voting power of Baker Hughes’ then outstanding Voting Securities;      (d) a sale, transfer, lease or other disposition of all or substantially all of Baker Hughes’ Assets is consummated (an " Asset Sale "), unless :      (1) the individuals and Entities who were the Beneficial Owners of the Voting Securities of Baker Hughes immediately prior to such Asset Sale own, directly or indirectly, 50 percent or more of the combined voting power of the Voting Securities of the Entity that acquires such Assets in such Asset Sale or its parent immediately after such Asset Sale in substantially the same proportions as their ownership of Baker Hughes’ Voting Securities immediately prior to such Asset Sale; or      (2) the individuals who comprise the Board immediately prior to such Asset Sale constitute a majority of the board of directors or other governing body of either the Entity that acquired such Assets in such Asset Sale or its parent (or a majority plus one member where such board or other governing body is comprised of an odd number of directors); or      (e) The stockholders of Baker Hughes approve a plan of complete liquidation or dissolution of Baker Hughes.      " Code " means the Internal Revenue Code of 1986, as amended, or any successor act.      " Committee " means, prior to a Change in Control or a Potential Change in Control, the Compensation Committee of the Board. After a Change in Control or a Potential Change in Control, " Committee " means (i) the individuals (not fewer than three (3) in number) who, on the date six months prior to the Change in Control constitute the Compensation Committee of the Board, plus, (ii) in the event that fewer than three (3) 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 Committee after a Change in Control or Potential Change in Control shall not exceed six (6).      " Company " means Baker Hughes or an Employer.

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     " Disability " means the Participant’s incapacity due to physical or mental illness that has caused the Participant to be absent from full-time performance of his duties with the Company for a period of six (6) consecutive months.      " Effective Date " means December 3, 2003, the date on which the Plan was adopted.      " Employee " means an individual (i) who is employed in the services of the Company on the Company’s 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. Notwithstanding the foregoing, the Committee may from time to time designate other individuals who may be selected for participation in the Plan.      " Employer " means any Affiliate that adopts the Plan pursuant to the provisions of Section 10.      " Employment Termination Date " means the date as of which a Participant incurs a Termination of Employment determined in accordance with the provisions of Section 6.2.      " Entity " means any corporation, partnership, association, joint-stock company, limited liability company, trust, unincorporated organization or other business entity.      " ERISA " means the Employee Retirement Income Security Act of 1974, as amended, or any successor act.      " Exchange Act " means the Securities Exchange Act of 1934, as amended, or any successor act.      " Excise Tax " means the excise tax imposed by section 4999 of the Code or any similar tax payable under any United States federal, state, or local statute.      " Expiration Date " shall have the meaning specified in the definition of the " Term of the Plan".       " Good Reason " for termination by the Employee of his employment means the occurrence (without the Employee’s express written consent) after any Change in Control, or prior to a Change in Control under the circumstances described in clauses (ii) and (iii) of the second paragraph of the definition of Termination of Employment (treating all references to " Change in Control " in paragraphs (a) through (f) below 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 (a), (e), (f) or (g) below, such act or failure to act is corrected prior to the effective date of the Employee’s termination for Good Reason:

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the assignment to the Employee of any duties or responsibilities which are substantially diminished as compared to the Employee’s duties and responsibilities immediately prior to a Change in Control or a material change in the Employee’s reporting responsibilities, titles or offices as an Employee and as in effect immediately prior to the Change in Control.      (a) a reduction by the Company in the Employee’s annual Base Compensation 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;      (b) the relocation of the Employee’s principal place of employment to a location outside of a 50-mile radius from the Employee’s principal place of employment immediately prior to the Change in Control or the Company’s requiring the 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 Employee’s business travel obligations immediately prior to a Change in Control;      (c) the failure by the Company to pay to the Employee any portion of the 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 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;      (d) the failure by the Company to continue in effect any compensation plan in which the Employee participates immediately prior to the Change in Control which is material to the 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 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 Employee’s participation relative to other participants, as existed immediately prior to the Change in Control;      (e) the failure by the Company to continue to provide the Employee with benefits substantially similar to those enjoyed by the Employee under any of the Company’s pension, savings, life insurance, medical, health and accident, or disability plans in which the 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 Employee of any material fringe benefit or Perquisite enjoyed by the Employee at the time of the Change in

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Control, or the failure by the Company to provide the Employee with the number of paid vacation days to which the Employee is entitled on the basis of years of service with the Company in accordance with the Company’s normal vacation policy in effect immediately prior to the time of the Change in Control; or      (f) any purported termination of the Employee’s employment which is not effected pursuant to a notice of termination satisfying the requirements of Section 6.1 hereof.      The Employee’s right to terminate his employment for Good Reason shall not be affected by the Employee’s incapacity due to physical or mental illness. The Employee’s continued employment shall not constitute consent to, or a waiver of any 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 Employee that Good Reason exists shall be presumed to be correct unless the Company establishes to the Committee by clear and convincing evidence that Good Reason does not exist. The Committee’s determination regarding the existence of Good Reason shall be conclusive and binding upon all parties unless the Committee’s determination is arbitrary and capricious.      " Gross-Up Payment " means the additional amount paid to a Participant pursuant to Section 4.4.      " Highest Base Compensation " means the Participant’s annualized Base Compensation in effect immediately prior to (1) a Change in Control, (2) the first event or circumstance constituting Good Reason, or (3) the Participant’s Termination of Employment, whichever is greatest.      " Incumbent Director " means –           (a) a member of the Board on the Effective Date; or           (b) an individual-      (1) who becomes a member of the Board after the Effective Date;      (2) whose appointment or election by the Board or nomination for election by Baker Hughes’ stockholders is approved or recommended by a vote of at least two-thirds of the then serving Incumbent Directors (as defined herein); and      (3) whose initial assumption of service on the Board is not in connection with an actual or threatened election contest.      " Interest Amount " has the meaning specified in Section 4.3(i).      " Merger " means a merger, consolidation or similar transaction.

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     " Participant " means an individual who is eligible to participate in the Plan under the provisions of Section 3.      " Pension Plan " means the Baker Hughes Incorporated Pension Plan, as amended from time to time.      " Perquisites " means benefits such as any 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 assistance, home computers and office accessories similar to the office accessories available to the Employee in his employment office and monthly Internet connection fees) that may be provided by the Company 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 Change in Control Severance Plan, as it may be amended from time to time.       " 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:      (a) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;      (b) 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;      (c) any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15 percent 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      (d) the Board adopts a resolution to the effect that, for purposes of the Plan, a Potential Change in Control has occurred.      " Renewal Date " shall have the meaning specified in the definition of the " Term of the Plan ."

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      "Section 409A" means section 409A of the Code and the Department of Treasury rules and regulations issued thereunder.       "Separation From Service" has the meaning ascribed to that term in Section 409A.       "Specified Employee" means a person who is, as of the date of the person’s Separation From Service, a "specified employee" within the meaning of Section 409A, taking into account the elections made and procedures established in resolutions adopted by the Administrative Committee of Baker Hughes.      " Specified Owner " means any of the following: Baker Hughes;      (a) an Affiliate of Baker Hughes;      (b) an employee benefit plan (or related trust) sponsored or maintained by Baker Hughes or any Affiliate of Baker Hughes;      (c) a Person that becomes a Beneficial Owner of Baker Hughes’ outstanding Voting Securities representing 30 percent or more of the combined voting power of Baker Hughes’ then outstanding Voting Securities as a result of the acquisition of securities directly from Baker Hughes and/or its Affiliates; or      (d) a Person that becomes a Beneficial Owner of Baker Hughes’ outstanding Voting Securities representing 30 percent or more of the combined voting power of Baker Hughes’ then outstanding Voting Securities as a result of a Merger if the individuals and Entities who were the Beneficial Owners of the Voting Securities of Baker Hughes outstanding immediately prior to such Merger own, directly or indirectly, at least 50 percent of the combined voting power of the Voting Securities of any of Baker Hughes, the surviving Entity or the parent of the surviving Entity outstanding immediately after such Merger in substantially the same proportions as their ownership of the Voting Securities of Baker Hughes outstanding immediately prior to such Merger.      " Supplemental Retirement Plan " means the Baker Hughes Incorporated Supplemental Retirement Plan, as amended from time to time.      " Term of the Plan " means the period commencing on the Effective Date and ending on:      (a) the last day of the three-year period beginning on the Effective Date if no Change in Control shall have occurred during that three-year period (such last day being the " Expiration Date "); or      (b) if a Change in Control shall have occurred during (i) the three-year period beginning on the Effective Date or (ii) any period for which the Term of the Plan shall

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have been automatically extended pursuant to the second sentence of this definition, the two-year period beginning on the date on which the Change in Control occurred.      After the expiration of the time period described in subsection (a) of this definition and in the absence of a Change in Control (as described in subsection (b) of this definition) the Term of the Plan shall be automatically extended for successive two-year periods beginning on the day immediately following the Expiration Date (the beginning date of each successive two-year period being a " Renewal Date "), unless, not later than 18 months prior to the Expiration Date or applicable Renewal Date, the Company shall give notice to Participants that the Term of the Plan will not be extended.      " Termination of Employment " means the termination of an individual’s employment relationship with the Company (i) by the Company without Cause after a Change in Control occurs, or (ii) by the individual for Good Reason after a Change in Control occurs.      For purposes of this definition, an individual’s employment shall be deemed to have been terminated after a Change in Control, if (i) the individual’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; (ii) the individual terminates his 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 a Person who has entered into an agreement with the Company, the consummation of which would constitute a Change in Control; or (iii) the individual’s employment is terminated by the Company without Cause or by the individual 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). For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Participant shall be presumed to be correct unless the Company establishes to the Committee by clear and convincing evidence that such position is not correct.      Termination of Employment does not include (i) a termination of employment due to the individual’s death or Disability, or (ii) a termination of employment by the individual without Good Reason.      " Thrift Plan " means the Baker Hughes Incorporated Thrift Plan, as amended from time to time.      " Voting Securities " means the outstanding securities entitled to vote generally in the election of directors or other governing body.       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;

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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      The individuals who shall be eligible to participate in the Plan shall be those Employees who are selected by the Committee. The Committee shall notify an Employee who has been selected for participation of his eligibility to participate in the Plan by furnishing him a written notification of participation that specifies whether he is a Level 1 or Level 2 executive for purposes of the Plan.      Notwithstanding any other provision of the Plan, an Employee shall not be eligible to participate in the Plan if there is in effect an individual severance agreement (including an employment agreement that provides for severance benefits) or change in control agreement between the Employee and the Company.      Notwithstanding any other provision of the Plan, the Board may discontinue an individual’s eligibility to participate in the Plan by providing him written advance notice (the " Notice "), no later than 18 months prior to the Expiration Date or a Renewal Date (as defined in the definition of " Term of the Plan" in Section 2.1), that he shall no longer participate in the Plan; provided , however , that should a Change in Control occur during such 18-month advance notification period, the Notice shall be void and of no effect, and the Participant shall be eligible to participate in the Plan as if the Notice were never given. 4. BENEFITS       4.1 Equity Based Compensation. Upon the occurrence of a Change in Control, all options to acquire Baker Hughes stock, all shares of restricted Baker Hughes stock, and all stock appreciation rights, the value of which is determined by reference to or based upon the value of Baker Hughes stock, held by the Participant under any plan of the Company shall become immediately vested, exercisable and nonforfeitable and all conditions thereof (including, but not limited to, any required holding periods) shall be deemed to have been satisfied. This effect, if any, of a Change in Control on any other equity incentives and other awards the value of which is determined by reference to or based upon the value of Baker Hughes stock shall be determined in accordance with the terms of the applicable award agreement and any terms and conditions issued by the Compensation Committee of the Board are applicable to the award.       4.2 Compensation and Benefits During Incapacity and Prior to Termination of Employment. Following a Change in Control and during the Term of the Plan, during any period in which the Participant fails to perform the Participant’s full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Participant’s full salary to the Participant at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Participant under the terms of

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any compensation or benefit plan, program or arrangement maintained by the Company during such period, until the Participant’s employment is terminated by the Company for Disability.       4.3 Benefits Following Termination of Employment. If a Participant incurs a Termination of Employment during the Term of the Plan, the Company shall provide the Participant the benefits described below. Further details of the benefits described in this Sect