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                                                                   Exhibit 10.45








January 24, 2001




Mr. Andrew J. Szescila
6307 Prague Street
Houston, Texas  77007

Dear Andy:

         Baker Hughes Incorporated (the "Company") has awarded you today 25,000
restricted shares of the common stock of the Company, subject to the
restrictions, terms and conditions described in the enclosed certified
resolutions of the Compensation Committee of the Board of Directors of the
Company. Certificate(s) representing those shares will be issued in your name
and held in the Company's possession for safe-keeping until they vest in
according with the restrictions, terms and conditions contained in the
resolutions, at which time the Company will deliver them to you.

         Pending vesting of the restricted shares, you will earn dividends paid
with respect to the shares.


                                         Very truly yours,



                                         Michael E. Wiley
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                                   CERTIFICATE


         The undersigned, Sandra E. Alford, hereby certifies that she is the
duly elected, qualified and acting Secretary of Baker Hughes Incorporated, a
corporation duly organized and existing under the laws of the State of Delaware
(the "Corporation"); that as such officer, she is in charge of the Minute Book
and other corporate records of said Corporation; that the following is a full,
true and correct copy of the resolutions appearing in the records of the
Compensation Committee of the Board of Directors of the Corporation, and that
said resolutions were adopted by the Compensation Committee of the Board of
Directors of the Corporation, at a meeting held on Januray 24, 2001, and the
undersigned further certifies that as of the date hereof said resolutions have
not been rescinded or modified and are in full force and effect:

                  RESOLVED, that the Company issue to Mr. Szescila 25,000
         restricted shares of the Common Stock of the Company, $1.00 par value
         per share (the "Common Stock") under the Company's Long Term Incentive
         Plan, all of which shares are to vest on January 24 in the year 2004,
         subject to continued employment with the Company;

                  RESOLVED, that if Mr. Szescila does not remain employed by the
         Company other than by death or disability, the Restricted Shares shall
         be forfeited to the Company to become treasury shares of the Company;

                  RESOLVED, that in the event Mr. Szescila does not remain
         employed by the Company due to his disability, all Restricted Shares
         shall immediately vest;

                  RESOLVED, that upon the death of the employee while in active
         service, all Restricted Shares shall immediately vest with the estate
         of the deceased being the beneficiary;

                  RESOLVED, that pending vesting of the Restricted Shares, Mr.
         Szescila shall be entitled to dividends paid with respect to the
         Restricted Shares;

                  RESOLVED, that the Restricted Shares shall be issued pursuant
         to the Long Term Incentive Plan of the Company and are subject to and
         governed by the additional terms and conditions of that plan, including
         (without limitation) the change of control provisions of Section 16 of
         the Plan;
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                  RESOLVED, that when the Restricted Shares are issued and
         delivered to Mr. Szescila, they shall be fully paid and non-assessable
         and subject to the conditions described above;

                  RESOLVED, that the proper officers of the Company be, and each
         of them hereby is, authorized to prepare, execute, deliver and perform
         such agreements, documents, certificates and other instruments and take
         such other action, in the name and on behalf of the Company, as each of
         such officers, in the officer's discretion, shall deem necessary or
         advisable to carry out the intent of the foregoing resolutions and the
         transactions contemplated thereby, the taking of such action and the
         preparation, execution, delivery and performance of any such
         agreements, documents, certificates and other instruments or the
         performance of any such act shall be conclusive evidence of the
         approval of this Board of Directors thereof and all matters relating
         thereto; and

                  RESOLVED, that any and all actions taken by or on behalf of
         the officers of the Company prior to the adoption of these resolutions
         that are within the authority conferred hereby are hereby in all
         respects ratified, confirmed and approved.


Dated at Houston, Texas as of the 24th day of January, 2001.



                                       -----------------------------------------
                                         Sandra E. Alford, Secretary